Can you legally avoid care home fees?
The short answer: you cannot legally avoid care home fees if your local council or NHS assesses you as needing residential or nursing care and determines you must contribute financially. However, there are legitimate ways to reduce what you pay, protect part of your property, or in some cases, have the NHS pay for everything instead.
The strategies that work are those that are set up before care becomes foreseeable, comply with the Care Act 2014, and pass scrutiny from your local authority’s deprivation of assets team. Schemes cooked up after a diagnosis or fall will not work and may backfire.
This guide covers what is genuinely possible, what is myth, and when to seek professional advice.
How the means test works: the £23,250 threshold explained
In England, care-home fees are means-tested. Your local council will assess your capital (savings, investments, property value) and your income. How much you pay depends on where you fall on this scale.
The two key thresholds are:
- £14,250 (lower threshold) — if your capital is below this, the council assumes you have enough income and may ask you to pay a flat weekly rate, or nothing if your income is low enough.
- £23,250 (upper threshold) — if your capital is above this, you must self-fund your care home fees until your capital falls below £23,250. Only then will the council step in.
If your capital falls between £14,250 and £23,250, the council applies a “tariff income” calculation: for every £250 (or part thereof) above £14,250, you are assumed to have an additional £1 per week of income. This is added to your actual income to work out your weekly contribution.
These thresholds have been frozen since 2010. They have not risen with inflation, so more families now fall into the self-funding bracket than a decade ago.
The assessment includes your savings, investments, and normally the value of your home — unless specific exceptions apply (see below). Income includes state pension, occupational pension, rental income, and dividend income.
When your home counts as capital — and when it doesn’t
The most valuable asset most people own is their home. The rules on whether it counts toward the means test are strict but offer real protection in specific situations.
The 12-week disregard
When you first move into a care home permanently, the value of your home is ignored for the first 12 weeks. This gives you and your family time to sell, or to consider your options without the home’s value forcing you into self-funding immediately.
After 12 weeks, the home is counted as capital — unless one of the permanent disregards below applies.
Permanent disregards: when the home never counts
The home is permanently disregarded (and so does not count toward the means test) if it is occupied by:
- Your spouse, civil partner, or unmarried partner.
- A child of yours who is under 18.
- A relative of yours aged 60 or over.
- A relative of any age who is incapacitated (unable to manage their own affairs).
A discretionary disregard also exists for a carer who gave up their own home to look after you — though this is applied case-by-case.
If your home is disregarded, you will only be assessed on your liquid capital (savings, investments, pensions in drawdown, etc.) and your income. This can make an enormous difference to how much you pay.
What “occupation” means
The person must be living in the home. They cannot own it and be living elsewhere. A second home does not qualify.
Deprivation of assets: why there is no 7-year rule
One of the most persistent myths in care-fee planning is the “7-year rule” — the idea that if you give away money or property more than seven years before needing care, the council cannot claw it back.
This is false. The 7-year rule applies to inheritance tax, not care fees. There is no statutory time limit under the Care Act 2014 for how far back your council can investigate your finances.
How deprivation of assets actually works
If your council suspects you have deliberately transferred capital (money, savings, or property) to reduce the amount you would pay for care, they can treat the transferred amount as if you still own it. They call this “deprivation of assets“.
To prove deprivation, the council will look at:
- Timing — when the transfer happened in relation to your care needs.
- Your health — how frail or ill you were at the time.
- Whether care was foreseeable — did you have a diagnosis or obvious decline?
- Your intent — did you give the money away to avoid care fees, or for a genuine reason?
- The amount — large transfers raise more suspicion than small ones.
If you gave your house to your children when you were already frail, recently diagnosed with dementia, or in hospital, the council will almost certainly treat this as deprivation and include the property value in your means assessment.
If you transferred assets decades ago, in good health, and for documented reasons (such as a proper estate-planning structure set up by a solicitor), deprivation is much harder to prove — but the council can still investigate.
The legal test is not a checklist: the council must be satisfied on the balance of probabilities that you intended to avoid paying for care. A genuine gift to your children years ago, with no care background, will usually not be treated as deprivation. A hurried transfer after a stroke will.
Tenants in common and will trusts: protecting half your property
One legitimate strategy used by many families is to structure property ownership as tenants in common rather than joint tenants, combined with a carefully drafted will or trust.
How it works
If you own a property jointly with a spouse or partner, you normally own it as “joint tenants”. This means on your death, your half automatically passes to the other owner outside your will.
If you instead own it as tenants in common, each person owns a distinct share (often 50/50, but it can be unequal). On your death, your share passes according to your will, not automatically to the other owner.
By combining this with a trust arrangement in your will, when the first spouse dies, their half can be placed in trust for the surviving spouse’s benefit — but not owned by them. The surviving spouse can live in the home and benefit from it, but the half in trust is not treated as their capital. When the surviving spouse later needs care, that half may not be counted toward the means test.
Key limitations
This only protects roughly 50% of the property. You cannot place 100% in trust for yourself; the purpose is to protect one spouse’s share from the surviving spouse’s care costs.
It must be set up well before care need is foreseeable. If one spouse is already ill or in care when you restructure the property, courts and councils will look very skeptically at the arrangement, and it may be treated as deprivation of assets.
The costs are modest: HM Land Registry’s severance form (SEV) to split a joint tenancy is free, and a solicitor typically charges £150–£600 to restructure the property and draft new wills. However, legal costs depend on your solicitor and complexity.
This is a tool for couples (married, civil partners, or unmarried) with substantial home equity and several years’ notice of potential care needs. It is not suitable for single people, and it is not a silver bullet.
NHS Continuing Healthcare — when the NHS pays for everything
In some cases, the NHS — not the local council and not you — pays for all your care home or care at home costs. This is called NHS Continuing Healthcare (CHC). It is not means-tested and does not depend on your savings or home.
Who qualifies?
You qualify if the NHS assesses you as having a “primary health need”. This is not about age, diagnosis, or disability alone. The NHS looks at four key indicators:
- Nature of your health needs — what is the character of your condition?
- Intensity — how severe and frequent is the care you need?
- Complexity — how unpredictable or difficult is your condition to manage?
- Unpredictability — how often do your needs change?
Conditions like advanced dementia with challenging behaviour, severe physical disability requiring 24-hour specialist nursing, and progressive neurological disease (Parkinson’s, motor neurone disease) are common in CHC cases. However, age alone, mild dementia, or needing help with activities of daily living (washing, dressing, cooking) are typically not enough.
Realistic chances
Only about 21% of people who are fully assessed for CHC are found to be eligible (Nuffield Trust, 2023/24). If your application is turned down, you can request a local resolution review, which succeeds in only about 13% of cases. If that fails, you can appeal to the NHS national panel.
CHC is worth investigating if you or your relative has a complex, unpredictable, or highly intensive health need. Ask your GP or social worker to refer you for assessment. Do not assume you will not qualify: the rules are often misunderstood, and some eligible people are never referred.
Deferred Payment Agreements with your council
If your home is your main asset but you do not have enough liquid capital to pay care-home fees upfront, your local council can offer a Deferred Payment Agreement (DPA).
How it works
The council pays your care-home fees on your behalf. The debt is secured as a legal charge against your home. When you die or your home is eventually sold (by your family or as part of your estate), the council is repaid from the sale proceeds, along with interest.
A DPA lets you stay in care without forcing a house sale during your lifetime. Your family can plan the sale after you have died or moved into permanent residential care.
Costs
The council charges interest on the outstanding debt. The statutory maximum interest rate is 4.75% for the first half of 2026 (it varies with inflation). The council will also charge an administration fee (typically £450–£1,082) and annual review fees.
Over time, if you are in care for many years, the interest can be substantial. A £200,000 debt at 4.75% interest compounds significantly over a decade. However, if your care is only needed for a few years, a DPA can be much cheaper than a premature house sale.
Eligibility and process
You must be over 65, own your home, and be assessed as needing care. The council will usually require that your home is suitable as security (i.e., has sufficient equity). You will need legal advice, as the charge must be registered at HM Land Registry. Your council’s social-care team can explain the full terms, including how interest is calculated and what happens if the home is sold.
What most families actually do in practice
In reality, most families in England do one or more of the following:
- Self-fund until the threshold — pay care-home fees from savings and income until capital falls below £23,250, then the council takes over.
- Rely on the 12-week disregard — use the first 12 weeks to sell the home, or to let a family member move in (triggering the permanent disregard).
- Apply for a DPA — keep the home and defer payment, repaying from the eventual sale.
- Use a Deferred Payment Agreement tied to a house sale plan — the council pays fees while the family lists and sells the home, repaying the council from the sale within a few years.
- Restructure property as tenants in common (couples only) — set up years before retirement, in the hope of protecting half the asset.
- Arrange for a relative to move in — triggering the permanent disregard on the home and allowing the primary owner to pay only from liquid capital.
- Apply for CHC assessment — if there is a complex or unpredictable health need, though success rates are low.
Very few people manage to avoid all care-home fees. The means test is deliberate policy: it reflects the principle that those with assets should contribute to the cost of their own care. The aim of the strategies above is to reduce the burden, spread payments over time, or protect family assets — not to escape the obligation entirely.
Getting legal and financial advice
Care-fee planning involves law (trusts, property, the Care Act 2014), tax (inheritance tax, capital gains), and finance (DPAs, interest rates, equity release). A mistake can cost thousands of pounds.
Who to consult
- A solicitor specialising in care-fee planning or elderly clients — essential if you are considering tenants in common, trusts, or a DPA. Ask for a fixed quote upfront.
- An independent financial adviser — can model different scenarios (e.g., selling now vs. a DPA) and discuss equity release or other options.
- Your local council’s social services team — they can explain the means test, the 12-week disregard, and whether a DPA is available. The initial assessment is free.
- A care advisor or care home consultant — can help you find suitable care homes and understand typical costs in your area. CareFinder’s city guides list care homes with fees and resident feedback.
Timing is critical
If you are already in poor health or an older person has just been assessed as needing care, do not attempt complex planning — it will likely be treated as deprivation. Instead, focus on the immediate practical steps: the 12-week disregard, a DPA, and whether CHC applies.
If you are in good health and want to plan proactively, now is the time to see a solicitor about property restructuring or trust arrangements. These work only if they are set up years in advance, for genuine reasons, not hastily when care is foreseeable.
Care fee planning is not a trick to avoid paying for care. It is a legitimate use of the rules that exist, set up in good time, and with proper legal advice. Done badly — or too late — it can backfire and cost you more in the end.