Who pays for home care in the UK? A 2026 funding guide

Home care is not automatically free. Most people in England pay for at least part of it, and many pay for all of it. But the funding picture is more complex than "free" or "private pay" — there are four distinct routes, several benefits that apply regardless of income, and combinations of funding that most families never find out about because nobody tells them. This guide covers each route plainly: who qualifies, what the assessment involves, what is actually covered, and the most common reasons people are wrongly turned away.

The four funding routes

Before going into each in detail, here is the overall picture:

Route	Who qualifies	Means-tested?	What it covers
NHS Continuing Healthcare (CHC)	Primary health need	No	Full cost of care, anywhere
Local authority social care	Care Act needs + financial threshold	Yes	Assessed care needs, up to council rate
Attendance Allowance	Age 65+, needs personal care	No	Contribution to care costs (cash benefit)
Fully self-funded	Everyone else	N/A	Whatever you arrange

Most people are either entirely self-funded, or self-funded with Attendance Allowance, or in some mix of local authority funding plus top-up. CHC is the route that fully funds care — but it applies to a minority.

Route 1: NHS Continuing Healthcare

NHS Continuing Healthcare (CHC) is the most significant funding route, and the most frequently misunderstood. It is full NHS funding for ongoing care outside hospital — for people whose care needs arise primarily from a health condition. Not social needs. Health needs. This distinction matters enormously, because it determines whether care is paid for entirely by the NHS or subject to means-testing.

CHC is not means-tested. Savings, income, and property are irrelevant. If someone qualifies, the NHS pays the full cost of their care — including at-home care — regardless of what they have in the bank.

Who qualifies

The test is whether the person has a "primary health need." This is assessed across twelve domains: behaviour, cognition, psychological and emotional needs, communication, mobility, nutrition, continence, skin and tissue viability, breathing, drug therapies, altered states of consciousness, and other significant care needs. The combination and interaction of needs matters, not just individual ones. Someone with severe dementia, frequent falls, complex medication, and double incontinence will typically meet the threshold; someone with mild dementia and mobility difficulties may not.

The assessment process

Stage 1 is a CHC Checklist — a short screening tool completed by a nurse, social worker, or GP. If the Checklist indicates CHC may be appropriate, it triggers Stage 2.

Stage 2 is a Decision Support Tool (DST) assessment, carried out by a multidisciplinary team (typically including a nurse and social worker, often a GP). It takes time — weeks, not days — and families can attend and contribute. The team produces a recommendation. The final decision rests with NHS commissioners.

If CHC is refused and you believe the decision is wrong, you have a right to ask for a local review, and then to refer the case to NHS England for an independent review. The National Framework for NHS Continuing Healthcare (2022) governs the process and describes appeal rights in detail.

Common reasons for being turned down

CHC is refused more than it is awarded, and that is sometimes correct and sometimes not. Common — and legitimate — reasons for refusal include needs that are primarily social (help with cooking and cleaning) rather than health-related. Common and potentially challengeable reasons include assessments carried out in hospital during an acute phase when someone's needs appear higher than they will be once stabilised, and assessments completed hastily at discharge without proper family involvement.

If CHC is declined, ask for the DST in writing and go through it carefully. The Local Government Ombudsman has upheld complaints about CHC assessment processes where families were not properly included.

Route 2: Local authority social care funding

The most common form of public funding for home care is through the local authority — and it is means-tested.

The needs assessment

The first step is a needs assessment from the local council. Under the Care Act 2014, every adult in England has the right to request one — free of charge, regardless of their financial situation. The council cannot refuse a needs assessment.

The assessment determines whether the person's needs meet the national eligibility threshold. Under the Care Act, needs are eligible if they relate to two or more of ten specified areas of daily life (such as managing and maintaining nutrition, maintaining personal hygiene, being appropriately clothed, maintaining a habitable home environment, developing and maintaining family relationships, or accessing work, education, or volunteering) and if the failure to meet these needs has a significant impact on their wellbeing.

If the needs assessment confirms eligible needs, the council then carries out a financial assessment.

The financial assessment

The current capital thresholds in England (2025-26) are:

Capital level	What the council pays
Below £14,250	Council meets the full assessed care cost
£14,250 — £23,250	Sliding scale: each £250 over £14,250 = £1/week "tariff income"
Above £23,250	Person expected to fund own care in full

The family home is not counted in the financial assessment while the person is still living there. This is an important and often misunderstood point: your parent's house is not included in the asset calculation as long as they remain at home.

Income is also assessed — pensions, benefits, and other income sources are taken into account. The council is required to leave the person with a minimum guaranteed income for their personal needs after their care contribution has been calculated.

What the council will fund

If someone qualifies for local authority funding, the council will calculate a personal budget — the amount it would cost to meet the assessed needs using the council's standard rates. This may be taken as a managed budget (the council arranges care directly), a Direct Payment (money paid to the person to arrange their own care — see below), or a mix.

The personal budget is set based on the council's own rates, which may be lower than what you would pay privately. If you prefer a provider that costs more than the personal budget allows, a family member can make a top-up payment — but only a third party (not the person receiving care themselves, with limited exceptions) can do so.

Common reasons for being turned down

The most frequent reason is financial: savings above £23,250. The second is needs falling below the eligibility threshold — needs assessed as "moderate" but the council arguing they do not meet the "significant impact on wellbeing" test. If you disagree with either conclusion, the council's decision can be challenged through its formal complaints process, and ultimately through the Local Government and Social Care Ombudsman.

Route 3: Attendance Allowance

Attendance Allowance is the funding route that is most frequently unclaimed. It is a non-means-tested, tax-free cash benefit from the Department for Work and Pensions, paid to people aged 65 and over who need help with personal care — washing, dressing, taking medication, supervision for safety — due to physical or mental disability.

Crucially, the person does not need to be receiving care to claim it. They need to need it. Someone struggling to wash independently but managing with family help is eligible, even if they have never paid for professional care.

The two rates for 2025-26:

Rate	Weekly amount	Who qualifies
Lower	£72.65	Needs help during the day or night
Higher	£108.55	Needs help during the day and night, or is terminally ill

Attendance Allowance is claimed by completing Form AA1 and sending it to the DWP. Age UK's guide to Attendance Allowance has a useful companion factsheet; local Age UK branches often run form-filling sessions. It typically takes around 40 working days to process.

It does not affect most other benefits. And it can be used for anything care-related — including paying a family member to provide care, if that is what works.

Personal Independence Payment

For people under 65, the equivalent benefit is Personal Independence Payment (PIP), not Attendance Allowance. PIP has its own assessment process (the daily living component of PIP covers similar ground to AA). If someone was receiving the daily living component of PIP and then turns 65, they continue to receive PIP — they do not automatically switch to Attendance Allowance.

Route 4: Self-funded care

For people whose savings exceed £23,250 and who do not qualify for CHC, care is self-funded — arranged and paid for by the family directly. Most home care in England is self-funded, at least initially.

Self-funded care gives you more choice: you are not restricted to providers on a council framework, and you are not subject to a council personal budget. You can choose any CQC-registered agency, negotiate visit times, and change providers without needing council approval.

The downside is obvious: cost. Visiting care at £28–£35 per hour, multiple times a day, seven days a week adds up to well over £30,000 a year for moderate levels of support. For context, our full home care cost guide has worked examples at different levels of need.

Even if you are self-funding, request a council needs assessment anyway. It is free, you are legally entitled to it, and it establishes the formal record of need that may support future funding applications — including if circumstances change.

Direct Payments: taking control of your funding

If the local authority is funding care (partially or fully), a Direct Payment puts that money into your hands rather than having the council arrange everything. The amount is based on the personal budget — what the council would spend to meet the assessed needs.

With a Direct Payment, you can:

• Hire a personal assistant (PA) directly, rather than using a council-framework agency
• Use a CQC-registered agency of your choice
• Mix both approaches
• Build in flexibility that a standard care package might not allow

The trade-off is administration. You must keep records of how the money is spent, and irregular audits do happen. The council can withdraw the Direct Payment if funds are misused. Many families use a managed account service — sometimes called a third-party payroll service — to handle the administration for a small fee.

Direct Payments can also be combined with top-up spending from the family, allowing more hours or a better provider than the personal budget alone would cover.

The mixed-funding scenario: the most common situation

Most families who do not qualify for CHC, and whose relative does qualify for local authority funding, find themselves in a mixed arrangement. A typical picture might be:

• Local authority funds 10 hours of care per week (based on assessed needs)
• Attendance Allowance of £72.65/week helps offset additional costs
• The family self-funds additional hours at weekends or for companionship visits

Understanding all three funding streams simultaneously — and maximising the non-means-tested elements — is genuinely important. Age UK's factsheet on paying for care at home and Independent Age's guide are both reliable resources for detailed calculations.

The care cost cap: what happened to it

The care cost cap — a proposed limit on lifetime care costs that would have protected people from the most extreme costs of self-funded care — was announced, legislated for, delayed, and ultimately shelved. The Dilnot Commission's original 2011 recommendation was for a £35,000 cap; this was legislated at £86,000 under the Health and Care Act 2022, with implementation planned for October 2025. It was postponed indefinitely in 2023 and has not been reinstated.

As of 2026, there is no cap on lifetime care costs in England. Families planning for long-term care should not include one in their projections.

Steps to take now

1. Request a CHC Checklist if your relative has complex health needs — especially at the point of hospital discharge. Ask the GP or ward nurse to start the process if it has not been offered.
2. Request a needs assessment from the local authority. It is free, you are legally entitled to it, and it costs nothing to ask. Even if the outcome is that no funding is awarded, the assessment is on record.
3. Claim Attendance Allowance if your relative is 65 or over and needs help with personal care. It is frequently unclaimed, it is non-means-tested, and it goes a long way.
4. Ask about Direct Payments if the local authority is going to fund care — you may have more flexibility than you realise about how that money is used.

For a full breakdown of what home care actually costs at different levels of need, see our cost guide. And if discharge from hospital is what has brought you here, the hospital discharge guide covers the next 72 hours in detail.