Step 3 - your finances are assessed

Financial assessment 

How does a local authority assess what to charge

How a local authority assesses what to charge a person receiving a service varies from area to area. However, most local authorities will carry out some sort of means test. This will normally have three stages:-

• assessing income and capital
• assessing living expenses
• calculating the charge.

Assessing income and capital

19Some local authorities will work out what income and capital a person has using similar rules to those for residential charges. However, they do not have to do so and may use other methods.

1From 11 June 2013 an armed forces independence payment made under the Armed Forces and Reserve Forces (Compensation Scheme) Order 2011 must be disregarded when calculating income.

20The mobility component of disability living allowance cannot be taken into account when calculating income.

20aWhen someone's children are being looked after by the local authority certain benefits should mean that no contribution is expected. The benefits are income support, income-based jobseeker's allowance or universal credit.

21Organisations for disabled persons argue that attendance allowance (AA) or the care component of disability living allowance (DLA) should not be counted as income as they are intended to meet the extra costs of disability. However, some local authorities assume that these benefits are available to help someone pay towards the cost of a service. If a client wishes to challenge this s/he should argue that the local authority is not setting a reasonable charge by taking AA or the DLA care component into account, and it is not reasonably practicable for her/him to pay this charge.

22A local authority may try to take the value of a person's home into account when deciding what to charge for non-residential community care services. If the local authority does try to do this, it should be challenged on the grounds that this is not reasonable.

Assessing living expenses

23The local authority will then assess everyday living expenses. Some local authorities use income support applicable amounts to calculate this. Others may use different methods. The local authority should take into account any extra expenses that the person receiving services has because of any disability. Additional amounts may also be included to allow for housing costs. The client can argue that the extra costs of disability should be taken into account. The main extra costs are likely to be:-

• private help at home, including odd jobs or gardening
• chemists items
• laundry
• clothing and bedding
• diet and food
• fuel and heating
• transport and travel.

Calculating the charge

24The income of the person receiving services is then compared with her/his expenses. If income exceeds expenses, the difference is described as assessable or disposable income. If income is less than allowances, the client will have no assessable or disposable income.

25The local authority will then determine what to charge. Some authorities provide for all disposable income to be paid towards a service, up to its full cost. In some areas, a person with no disposable income will not be charged for services while in others s/he will be charged at the lowest rate.