Care funding terms explained

Why Care Funding Is So Confusing

The UK care funding system sits at the intersection of health law, social care legislation, and means-tested benefits. It involves multiple agencies (NHS, local authorities, DWP), each with their own eligibility criteria, assessment processes, and terminology. It is entirely possible for someone to be simultaneously applying for CHC, a local authority financial assessment, Attendance Allowance, and a Deferred Payment Agreement, each governed by different rules and handled by different organisations.

Families navigating this for the first time, often in a stressful or urgent situation, frequently encounter terms they have never heard before and have to make important decisions without fully understanding what they mean. This jargon buster exists to change that.

The Most Important Distinction: NHS Funding vs Council Funding

The single most important thing to understand about care funding in England is that there are two completely separate systems. NHS Continuing Healthcare is available to anyone who qualifies on health grounds, with no means test whatsoever. If awarded, the NHS pays for all care in full regardless of savings, income, or property. Local authority funding, by contrast, is means-tested against capital and income, and is only available to those whose assets fall below the upper threshold of £23,250.

Many families spend significant time and money navigating the means-tested system without ever exploring CHC, which could have covered costs entirely. If the person receiving care has complex health needs, a CHC assessment should always be the first step, not the last resort.

What happens when neither system fully applies?

In practice, many people fall between the two systems. They may not qualify for full CHC but their savings may be above the council threshold, making them self-funders. In a nursing home, the NHS will still contribute the Funded Nursing Care rate to recognise the registered nursing element of care, even when CHC is refused. If the person owns a property, a Deferred Payment Agreement can prevent the immediate need to sell while care costs are covered by the council as a loan against the estate. Understanding which combination of funding applies to a particular situation is what this jargon buster is designed to help with.