The Care Home Means Test, Explained (2026)

If you or a family member need a care home and want to know whether the council will help pay, you'll go through a financial assessment — usually called the "means test". It looks at your savings, income and sometimes your home, and decides whether you self-fund, pay something towards the cost, or get most of it covered. Here's how it works in England.

What is the care home means test?

The means test — properly called a financial assessment — is carried out by your local council's adult social care team. It happens after a care needs assessment has established that you need a care home. The two assessments are separate: the needs assessment decides what care you require, and the financial assessment decides who pays for it and how much.

The council adds up your capital and your income, then works out your contribution using the rules below. It's the same basic process across England, though every council runs its own version of the paperwork.

What are the £23,250 and £14,250 thresholds?

The financial assessment compares your capital — savings, investments and usually your property — against two fixed figures.

These figures have been frozen since 2010, so they haven't kept pace with inflation or house prices. That's a big reason more people self-fund now than when the limits were set — someone with £24,000 in savings is treated the same as someone with £2.4 million. Always check the current thresholds on GOV.UK before relying on them, and note that Wales, Scotland and Northern Ireland use different rules and different figures.

What does "tariff income" mean?

If your capital falls between £14,250 and £23,250, the council doesn't take your savings directly. Instead, it assumes you have an extra £1 a week of income for every £250 (or part of £250) of savings above £14,250. This assumed amount — the tariff income — is added to your actual income when working out your weekly contribution.

For example, someone with £18,000 in savings has £3,750 above the £14,250 line. Divided by £250, that's 15 units, so roughly £15 a week is added as tariff income — on top of whatever they pay from pensions or benefits.

What counts as capital or income — and what doesn't?

Getting this wrong is one of the most common causes of overpaying or underpaying, so it's worth checking carefully.

Whatever's left of your income after the council takes its share, you keep as a Personal Expenses Allowance — a small weekly amount for personal spending, such as toiletries, clothes or gifts. The council can't take this from you.

Does my home count towards the means test?

Not always. Your property is disregarded — ignored completely — in several situations, most commonly:

• For the first 12 weeks of a permanent care home stay (the "12-week property disregard"), regardless of its value.
• Indefinitely, if your spouse, civil partner or partner still lives there.
• Indefinitely, if a relative aged 60 or over, or a dependent relative with a disability, still lives there.

If none of these apply and your home does count, you don't have to sell it immediately. You can ask the council for a deferred payment agreement — the council pays the fees on your behalf and recovers the money, usually from your estate, once the property is sold. This means you're not forced into a rushed sale. Ask your council about this before assuming a sale is your only option, and get independent guidance from MoneyHelper on the costs and interest involved.

How does income fit in alongside capital?

The means test looks at income as well as capital. Most pension income counts, including the State Pension, and most benefits count too. Some don't — Attendance Allowance, for instance, is normally counted if you're in a care home funded partly by the council, but the rules around it and other disability benefits can be complex, so check with the council or a benefits adviser. If your income is low, check whether you're entitled to Pension Credit, which can also affect what you're assessed as able to pay.

What if my savings are just over £23,250?

You self-fund until your capital drops to £23,250 or below. At that point you can ask the council for a fresh financial assessment — don't wait until your money runs out completely, because the assessment and any funding decision take time to arrange. Keep records of your spending on care so the council can see clearly when you crossed the threshold.

Is the means test the same as NHS Continuing Healthcare?

No. NHS Continuing Healthcare is a separate, non-means-tested assessment for people with significant, ongoing health needs. If you qualify, the NHS pays for your care regardless of your savings or income. It's assessed differently from council social care funding, and many people who could qualify never get assessed for it. Ask your GP, social worker or the hospital discharge team for an assessment, and see the NHS social care and support guide for more.

What if a family member wants to top up the fees?

If the council places you in a home but you or your family prefer a more expensive one, a relative can usually pay the difference as a "third-party top-up". This is a formal arrangement with the council and the home — get the terms in writing, because top-ups can be affected if the paying relative's circumstances change.

What should you do before the assessment?

• Gather bank statements, pension statements, benefit award letters and details of any property or investments.
• Check whether property disregards apply to your situation.
• Set up a lasting power of attorney for finances if the person needing care can't manage their own affairs — this makes dealing with the council, banks and the home much easier.
• Ask the council for a written breakdown of how your contribution was calculated, and query anything that looks wrong.
• Get independent advice from Age UK, Carers UK or MoneyHelper before making financial decisions about care fees.