Care FeesAssessing Care Fees: Disregarded Capital

In last week’s article we covered how income and capital is assessed by local authorities when deciding whether a person should pay for their own care. In addition to this, there are a number of different types of capital that will be disregarded from the financial assessment.

Main or only home

A persons main or only home may be disregarded from the means test in certain circumstances. If they no longer occupy the home but it is still occupied by any of the following at the time the person went into care:

  • their spouse, civil partner, partner, former partner or civil partner, except where they are estranged;
  • a lone parent who is their estranged or divorced partner; or
  • a relative who is:
    • aged 60 or over, or
    • a child of theirs aged under 18, or
    • incapacitated.

A relative is defined as any of the following:

  • a parent (including an adoptive parent);
  • a parent-in-law;
  • a child (including an adopted child);
  • a child-in-law (including the in-law of an adopted child);
  • a step-parent;
  • a stepchild;
  • a sibling;
  • a grandparent;
  • a grandchild;
  • an aunt or uncle;
  • a niece or nephew; or
  • the spouse, civil partner or unmarried partner or any of the above

This disregard will apply whilst the relative continues to live in the property as their main or only home. If the property is ever sold, for example if a spouse wishes to downsize, the disregard will no longer apply and the person’s share will then be considered as part of the financial assessment.

If the mandatory disregard does not apply, for example if a relative living in the property does not qualify or moved in after the person went into care the local authority does have a discretion to disregard the property. It does not need to exercise this but will give full consideration if a request is made.

For the first 12 weeks after a person moves into residential care, the value of the person’s main or only home will always be disregarded.


Capital held in trust may be considered in a financial assessment, this will depend on the type of trust. For example, the capital of a bare trust will be considered as the owner is treated as being beneficially entitled to the trust capital but capital in a life interest will not be considered as the life tenant of the trust has no entitlement to the trust capital.

Jointly owned assets

Only a person’s own income and capital should be considered by local authorities. If a person owns assets jointly, only their own share of those assets should be considered. Local authorities will generally consider joint assets as owned equally, unless there is evidence to show otherwise.

Business Partial Disregard

There is a 26 week disregard of assets of a business owned if the person is a new care home resident and have had to stop self-employed work due to illness or disability. This is a short term disregard where the intention is that the person will work again in the future.

If the person is a permanent resident, there is a disregard of the capital of the business assets for a reasonable period of time provided that steps are being taken to realise the capital of the business. If there is no immediate intention to realise the capital of the business, the local authority can take the capital of the business into account.


Personal possessions are disregarded provided that they were not purchased with the intention of avoiding care fees.

Miscellaneous Disregarded Capital

Certain types of investment bonds with life assurance elements are disregarded.

Funds held in a personal injury trust or administered by a court that arise from a payment for personal injury.

Various other payments are disregarded, for example:

  • Student loans.
  • Payments made by a local authority under the Adoption and Children Act 2002.
  • Child support maintenance payments.
  • Community charge rebate or council tax rebate.
  • Payments to people who caught hepatitis C as a result of contaminated blood products.
  • Payments related to Creutzfeldt-Jakob disease.
  • Payments related to people whose disabilities were caused by their mother taking Thalidomide whilst pregnant.

Chris Rattigan-Smith

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