Council funding for home care: the means test explained

The home care means test is the financial assessment your council uses to decide how much you pay towards care at home. In England in 2026/27, if your capital is above the upper capital limit of £23,250 you usually pay the full cost; between £14,250 and £23,250 you pay a contribution; below £14,250 your savings are ignored and only income counts. For home care, the home you live in is never counted.

Local guide: West Sussex (financial assessment for home care: what counts and what you pay).

At a glance

• Upper capital limit: £23,250. Lower capital limit: £14,250. Both frozen since 2010 (DHSC, 2026/27).
• Capital between the limits adds £1 a week of “tariff income” for every £250 (or part of £250).
• Your main home is always disregarded for care at home.
• You must be left with a Minimum Income Guarantee (MIG): £241.45 a week for a single person over Pension Credit age in 2026/27.
• Every council in England follows the same national rules, but each sets its own charging policy within them.

How does council funding for home care work?

Council funding has two stages. First, a needs assessment decides whether you have eligible needs under the Care Act 2014. Then a financial assessment (the means test) decides how much you pay.

Both are done by the adult social care team of the council where the person is ordinarily resident, whether that is a county council, unitary authority, metropolitan borough or London borough. Each applies the national Care and Support (Charging and Assessment of Resources) Regulations 2014 and the statutory guidance, but has its own charging policy. Councils have a power, not a duty, to charge for care at home, so local policies can be more generous than the national minimum.

Is the financial assessment the same as the needs assessment?

No. The needs assessment is free and is not affected by money. You’re entitled to one whatever your finances. The financial assessment only happens once eligible needs are identified and the council intends to meet them. For more on the first stage, see our guide to preparing for a care needs assessment.

What are the capital limits in 2026/27?

These limits apply across England and have not changed since 2010 (DHSC charging circular, 2026/27). The £86,000 lifetime care cost cap, once planned for October 2025, was scrapped in July 2024 and there is no replacement (House of Commons Library).

How tariff income works: an example

Suppose your mother has £18,250 in savings. That’s £4,000 above the lower limit. £4,000 ÷ £250 = 16, so the council treats her as having an extra £16 a week of income. This is added to her pension and benefits before the charge is worked out.

What counts as capital?

Capital usually includes:

• savings in bank and building society accounts;
• cash, ISAs, stocks and shares, Premium Bonds;
• property other than your main home (for example a buy-to-let or holiday flat);
• money released by equity release, once it’s in your account.

Joint savings are normally divided equally between the owners unless there’s evidence of different shares (Age UK Factsheet 46, May 2026).

What is disregarded?

• Your main or only home, always, when you receive care at home or in supported living. This is different from care home funding, where the home can count after a 12-week disregard.
• Personal possessions (unless bought to reduce capital).
• The surrender value of certain life insurance policies and annuities.

What income counts?

Most income counts, including:

• State Pension and private or workplace pensions;
• Pension Credit guarantee credit;
• Attendance Allowance, PIP daily living component and DLA care component;
• tariff income from capital.

Some income is fully disregarded, including earnings, the mobility component of PIP or DLA, and Pension Credit savings credit (Age UK Factsheet 46, May 2026).

Attendance Allowance and night-time care

Attendance Allowance and PIP daily living count as income. If you get the higher rate because of night-time needs, but the council isn’t providing any night care, councils have discretion to disregard the difference between the higher and lower rates. For 2026/27 that difference is £37.90 a week (£114.60 minus £76.70). It’s worth asking your council whether it does this. See using Attendance Allowance to pay for home care.

What is the Minimum Income Guarantee?

The Minimum Income Guarantee (MIG) is the amount of weekly income the council must leave you with after charging for home care. It’s meant to cover everyday living costs. For 2026/27 (DHSC):

Younger people can have premiums added, including a disability premium of £51.55 a week (single) and a carer premium of £55.25 (DHSC, 2026/27).

Housing costs and disability-related expenditure

On top of the MIG, the council should allow for:

• Housing costs: rent, mortgage, ground rent, Council Tax and certain service charges, after any Housing Benefit or Council Tax Reduction.
• Disability-related expenditure (DRE): reasonable extra costs caused by disability that the council isn’t meeting. Examples include extra heating, extra laundry, special diets, equipment and transport.

DRE is often under-claimed. Keep receipts and give the council a full list.

Working out the charge: a worked example

Here is a simplified example for a single woman aged 82 living alone in England, with £12,000 in savings (2026/27 figures):

She would pay the lower of £94.45 or the actual cost of her care. The council pays the rest. If the council disregards the night-time element of Attendance Allowance because no night care is provided, her charge would fall by £37.90. This example is illustrative; your council’s calculation may differ.

What will I need for the financial assessment?

Most councils carry out the financial assessment by phone, online form or a home visit. Having paperwork ready speeds things up and reduces mistakes. Gather:

• recent bank, building society and savings statements, usually covering the last few months;
• letters showing your State Pension, private pensions and any benefits, such as Attendance Allowance or Pension Credit;
• details of investments, ISAs, Premium Bonds and any property other than your home;
• rent or mortgage statements, your Council Tax bill and any service charge demands;
• receipts or a list of disability-related costs, such as extra heating, laundry, special clothing or equipment.

If someone manages money for your parent, the council will want to see the registered Lasting Power of Attorney or deputyship order. Registration of an LPA costs £92 per LPA (Office of the Public Guardian), and it’s worth doing early.

If you choose not to share financial information, the council can treat you as able to pay the full cost. You can still ask it to arrange care.

Are any services free?

Yes. Councils must not charge for:

• intermediate care and reablement for up to six weeks;
• community equipment and minor adaptations costing £1,000 or less;
• Mental Health Act section 117 aftercare.

NHS Continuing Healthcare is free and not means-tested, and replaces council charging entirely where someone qualifies. See NHS Continuing Healthcare at home.

Carers can only be charged for services provided to them in their own right, not for services provided to the person they care for.

What if you have more than £23,250?

You’ll usually pay the full cost of care, but you still have options:

• Ask the council to arrange your care anyway. If you have eligible needs, the council must agree, though it can charge the full cost plus an arrangement fee limited to its actual costs (Age UK Factsheet 46).
• Plan for the “crossover”. When your capital nears £23,250, ask for a new financial assessment so council funding can start on time.
• Claim non-means-tested benefits such as Attendance Allowance.

Read more in our guide to self-funding care.

Can the council say I gave money away?

If the council believes you deliberately reduced your capital to avoid care charges, it can treat you as still having it. This is called deprivation of assets, and the money is counted as “notional capital”. The council must look at the reasons and timing first; ordinary spending, paying debts and buying things you need are not usually deprivation. Take advice before making large gifts.

How do I challenge a financial assessment?

You should get a written record of the decision explaining how the charge was worked out and how often it’s payable (Age UK Factsheet 46). If something looks wrong:

1. Ask the council to recheck the figures, especially DRE and housing costs.
2. Ask whether it disregards the Attendance Allowance night-time element.
3. Use the council’s complaints procedure.
4. If still unresolved, complain to the Local Government and Social Care Ombudsman (LGSCO), which is free.

See how to complain about home care. For the bigger picture, our pillar guide to paying for home care explains every funding route.

Frequently asked questions

What is the upper capital limit for care in 2026?

In England, the upper capital limit is £23,250 and the lower limit is £14,250 for 2026/27. Both have been frozen since 2010. Above £23,250 you usually pay the full cost of care; between the limits you pay a contribution based on tariff income; below £14,250 your capital is ignored.

Is my house included in the means test for home care?

No. If you receive care in your own home, the value of the home you live in is always disregarded. Other property, such as a second home or buy-to-let, does count. Different rules apply for permanent care home placements.

How much money will I be left with after care charges?

At least the Minimum Income Guarantee. In 2026/27 that is £241.45 a week for a single person over Pension Credit age, or £184.30 each for a couple. The council should also allow for housing costs and disability-related expenditure before working out your charge.

Do all councils charge the same for home care?

No. All councils in England follow the same national charging rules and minimum protections, but each sets its own policy within them. Councils can choose to be more generous, for example on disability-related expenditure or on disregarding the night-time rate of Attendance Allowance. Ask your council for its charging policy in writing.

Does my partner’s money count in the means test?

The assessment is of the person receiving care, not their partner. Independent Age notes that the council cannot charge anyone else, such as your partner or someone you live with. Joint savings are normally split equally between owners, so only your share counts. A partner’s own income and savings shouldn’t be treated as yours.

Sources

• DHSC social care charging circular 2026 to 2027 (GOV.UK)
• Care and support statutory guidance, chapter 8 and Annexes B and C (GOV.UK)
• Age UK Factsheet 46: Paying for care and support at home, May 2026
• House of Commons Library: care cost cap briefing
• DWP benefit and pension rates 2026 to 2027 (GOV.UK)
• Independent Age: paying for care at home
• LGSCO: adult social care complaints

This guide is general information, not financial, legal or medical advice. Last reviewed September 2026.

Reviewed by The Care Panel team on 15 October 2026. This guide is general information about care in England, not legal, medical or financial advice. Rules and rates change; check with your council or an adviser before making decisions.