How to Pay for Home Care: Every Funding Option Explained

One of the biggest concerns families face when arranging home care for a loved one is cost. How do you pay for home care? Who is entitled to help from the council? What is NHS Continuing Healthcare? Can benefits cover care costs?

This guide explains every home care funding option available in England, in plain English, so you can make informed decisions for your family. We cover local authority funding, NHS Continuing Healthcare, direct payments, Attendance Allowance, and self-funded care — with practical notes for families in Richmond, Hounslow, and across London.

Note: Funding rules and thresholds can change. Always verify current figures with your local authority or a specialist care adviser.

The Four Main Ways to Fund Home Care in England

Home care in England is funded through one or a combination of the following routes:

1. Local authority (council) funding following a care needs assessment and means test
2. NHS Continuing Healthcare (CHC) for people with significant health needs
3. Direct payments — council money paid directly to you to arrange your own care
4. Self-funding — paying privately, sometimes supported by benefits such as Attendance Allowance

Many people use a combination of these. For example, someone might receive partial local authority funding, topped up with their own money and Attendance Allowance.

Option 1: Local Authority Funding

Step 1: Request a Care Needs Assessment

Anyone in England who appears to need care and support has the right to a free care needs assessment from their local council, regardless of their financial situation. In Richmond, you would contact Richmond Council; in Hounslow, the London Borough of Hounslow.

The assessment, carried out under the Care Act 2014, looks at what daily activities the person finds difficult, what risks exist, and what outcomes are important to them. If the person's needs meet the national eligibility threshold, the council has a legal duty to meet those needs.

Step 2: The Means Test (Financial Assessment)

If your needs are found to be eligible, the council will conduct a financial assessment to determine how much of the care costs you are expected to contribute. The assessment looks at:

• Your savings and capital (investments, some property)
• Your income (pensions, benefits)

The thresholds that apply for home care funding in England are:

• Above £23,250 capital: you are expected to pay the full cost of your care (self-funder)
• Between £14,250 and £23,250: a "tariff income" is applied — you contribute a portion
• Below £14,250: capital is disregarded; the council funds any assessed charge

Unlike residential care funding, the value of your home is not included in the means test for home care — only for care home placements. This is an important distinction many families are not aware of.

Personal Budgets

If you qualify for council funding, you will be given a personal budget — the amount the council calculates it will cost to meet your assessed needs. You can then choose how that budget is used: either through the council arranging your care directly, or by taking it as a direct payment (see Option 3).

Option 2: NHS Continuing Healthcare (CHC)

NHS Continuing Healthcare is a package of ongoing care arranged and fully funded by the NHS. Unlike local authority funding, there is no means test — if you are eligible, all care costs are covered regardless of your financial situation.

Who Is Eligible?

CHC is for adults aged 18 and over whose primary need for care arises from a health condition rather than social need. Eligibility is assessed by a multidisciplinary team (typically a nurse, social worker, and other health professionals) using the NHS Decision Support Tool, which looks at 12 care domains including behaviour, cognition, psychological, communication, mobility, nutrition, continence, skin integrity, breathing, drug therapies, altered states of consciousness, and other significant care needs.

A "primary health need" does not mean the most complex need possible — many people with dementia, neurological conditions, multiple sclerosis, or other serious illnesses may be eligible. It is worth requesting an assessment if there is any doubt.

CHC and Home Care

CHC funding can cover domiciliary care at home, making it possible for people with significant health needs to remain in their own homes with full NHS funding. If you believe a family member may be eligible, ask your GP, consultant, or hospital discharge team for a referral for a full CHC assessment.

NHS-Funded Nursing Care

If someone lives in a nursing home but does not meet the full CHC threshold, they may be entitled to NHS-Funded Nursing Care — a weekly contribution from the NHS toward the nursing element of their care. This does not apply to domiciliary care but is worth knowing about.

Option 3: Direct Payments

Direct payments give you — or a family member or representative on your behalf — the money from the local authority directly, rather than having the council arrange care for you. This gives far greater choice and control over your care.

How Do Direct Payments Work?

Once your care needs and personal budget have been assessed, you can request to receive the equivalent amount as a direct payment into a dedicated bank account. You then use this money to:

• Employ a care worker directly (subject to becoming an employer and meeting legal obligations)
• Purchase care from a registered home care provider such as Kindlio
• Combine care from different sources to meet your needs flexibly

You must keep records of how the direct payment is spent and spend it on agreed care outcomes. Your local authority will provide support to help you manage this.

Who Can Get Direct Payments?

Most people who qualify for local authority care funding can request direct payments. This includes older people, disabled adults, people with mental health conditions, and carers. You cannot usually use direct payments to pay a close family member who lives with you, though there are exceptions.

Option 4: Self-Funding Your Home Care

If your savings and assets are above the council's threshold, or if you simply prefer to arrange private care, you will fund your own home care. This is known as self-funding.

How Much Does Home Care Cost in London?

The cost of home care in London varies by provider, level of care, and number of hours required. As a general guide:

• Hourly home care visits: typically £18–£30 per hour in the London area
• Live-in care: costs depend on the level of support required and whether a single live-in carer or a rota of carers is needed
• Weekend and bank holiday rates are often higher

Always request a detailed written quote and ensure the provider is CQC registered. At Kindlio, we provide transparent pricing and will talk you through all options during an initial assessment.

Benefits That Can Help Self-Funders

Even if you are self-funding, you may be entitled to benefits that can offset the cost of care.

Attendance Allowance

Attendance Allowance is a tax-free, non-means-tested benefit for people aged 65 and over who need help with personal care or supervision due to a physical or mental disability. It is paid at two rates:

• Lower rate (2024–25: £72.65 per week): for people who need care during the day or night
• Higher rate (2024–25: £108.55 per week): for people who need care during the day and night, or who are terminally ill

Attendance Allowance does not have to be spent on any specific purpose, but it can make a significant contribution toward home care costs. Many people do not claim it — it is worth checking eligibility even if care has not yet started.

Personal Independence Payment (PIP)

PIP is the equivalent benefit for people aged 16 to 64 with a disability or long-term health condition that affects daily living or mobility. PIP is not means-tested and can also contribute toward the cost of care.

Carer's Allowance

If a family member provides at least 35 hours of unpaid care per week, they may be entitled to Carer's Allowance — currently £81.90 per week (2024–25). The person being cared for must already receive a qualifying disability benefit such as Attendance Allowance at the higher rate or PIP daily living component.

Deferred Payment Agreements for Residential Care

While not directly relevant to domiciliary care, it is worth noting that if a family member moves into a care home and owns property, a deferred payment agreement may be available. This means the council lends money toward care home fees, secured against the property, until it is sold. This is not applicable to home care but is useful context if circumstances change.

Getting Financial Advice on Care Funding

Navigating care funding can be complex, particularly where property, pensions, and inheritance interact. It is strongly advisable to speak with an independent financial adviser who specialises in later life financial planning, as well as a social worker from your local council.

Useful national resources include:

• GOV.UK: Care needs assessment
• Age UK — helpline and local advisers
• Carers UK

Home Care Funding in Richmond and Hounslow

If you are looking for support in arranging care in Richmond upon Thames, contact Richmond Council's Adult Social Care team. For Hounslow, contact London Borough of Hounslow Adult Social Care.

Kindlio works with self-funders, local authority-funded clients, and those using direct payments across Richmond, Hounslow, and surrounding London boroughs. We can work with you to understand what funding may be available and help you set up a care package that meets your loved one's needs.

Related Articles

• What Does a Domiciliary Care Worker Do?
• How to Choose a Domiciliary Care Provider in Richmond and London
• Live-In vs Hourly Care: Which Is Right for Your Loved One?