Long term care is needed when a person becomes ill or suffers a disability that makes them unable to carry out their activities of daily living, with the probability that this disability will continue over the long term. More often than not, it is the elderly who require care over the longer term and it is typically occasioned by either increasing frailty due to ageing or the chronic aftermath of acute conditions such as a stroke or a fall.

Long Term Care can also be required if a person is mentally impaired. The most common form of impairment for elderly people is dementia, and a common form of dementia is Alzheimer's Disease. A person suffering from dementia will need personal supervision and assistance to carry out normal daily activities.

The care required can take many forms, from simple domestic assistance to medical interventions and may be provided in a care home or in the person's own home.

The long term nature of the care needed, and the fact the person is unlikely to recover (they have a chronic condition), is what distinguishes this situation from the conditions covered by Private Medical Insurance - which covers acute medical conditions (i.e. conditions from which a recovery is expected).

Many people would have hoped the National Health Service would look after them. They might have paid National Insurance contributions and taxes all their working lives, and recall the original intention of the Welfare State to care for people 'from cradle to grave'. But the NHS no longer covers all the costs associated with the care of incurable conditions in old age.

Since the Community Care Act, which was passed in 1990, took effect in 1993, that task has been transferred to Local Authorities. The NHS will only provide and/or pay for the Nursing Care Service Component of a person's long term care service needs. All other costs and services associated with long term care are the care recipient's responsibility unless they qualify for Local Authority assistance. Although in Scotland from July 2002 Free Personal Care has been available.

Who pays for long term care?

One of the problems for the current generation of elderly people is that they were brought up believing that the State would look after them 'from cradle to grave.' This is not the case though, and as far as long term care costs are concerned, in general the State only pays for the least wealthy.

The provision of long term care outside hospitals has become the responsibility of individual Local Authorities and it is not free to everyone. However, all nursing care whether at home or via a care home should be provided free.

If your Local Authority agrees that you need care home care it will assess your means to work out what proportion of the costs is your responsibility, and what the Local Authority will pay. If you can expect a contribution from the Local Authority, the Authority will contract with the care home, pay the home direct but ask that you make your contribution towards the fees to them. The size of the contribution depends on the assessment of your wealth by a means test.

Means Test

Your Local Authority will use the national guidelines to take all your assets and income into account when they assess how much they will provide towards your care.

If your Local Authority decides care can be provided in your own home and you qualify for their help,  you may still have to pay for Local Authority Services although they must always allow you to retain a certain level of income after they have made charges for care services.

If your Local Authority decides care should be provided in a care home and you qualify for their help, you will be expected to contribute all of your income towards the cost of your care although you will be allowed to retain a small amount called the Personal Expense Allowance. Local Authorities will always set a fee scale for their area. This is the amount they will not go beyond in paying for a care home place.

There are rules that prevent you from giving your money away or spending large amounts in order to benefit from means testing. Any money you get rid of in this way will usually be added back to the value of the investments you have left. There is no time limit after which this rule is not applied.

Means test limits with effect from April 2008 for England are:

   Upper limit £22,250

   Lower limit £13,500

Assets & Savings- what is included / excluded?

Generally speaking all of your assets will be included in the means test. If assets are owned jointly then the value will be shared equally among the owners but only the value of your own share can be included in the means test.

If you are moving into a care home permanently then the value of your house will be disregarded for the first 12 weeks or if it is occupied by:

Income- what is included / excluded 

If you are on your own then the Local Authority will expect you to contribute all of your income less the Personal Expense Allowance towards the cost of your care in a care home.

If you have a partner then the Local Authority will expect you to contribute all of your State Pension and at least 50% of any Personal or Company pensions you may have. The other 50% may be disregarded providing it is paid to your partner in order that they can afford to continue to live at home.