Care home costs in Scotland can easily exceed £45,000 per year. It is the kind of figure that stops families in their tracks, and yet for many people it comes as a complete surprise at exactly the moment it most needs to have been thought about. 

Understanding how the rules work in Scotland, and planning ahead with proper legal advice, can make a very real difference to you and your family.

Scotland's Unique Advantage: Free Personal and Nursing Care

Scotland's position on care fees is, in one important respect, more generous than anywhere else in the UK. Under the Community Care and Health (Scotland) Act 2002, every person in Scotland who is assessed by their local council as needing personal care is entitled to receive it without charge, regardless of their income or assets. Originally available to those aged 65 and over, this entitlement was extended to all adults through what is commonly known as Frank's Law, which came into effect in April 2019.

From April 2025, the free personal care payment rate is £254.60 per week, paid directly by the council to the care provider. If nursing care is also assessed as necessary, a further £114.55 per week is contributed. These are nationally agreed rates, reviewed annually by the Scottish Government in secondary legislation.

It is important to be clear, however, about what free personal and nursing care does and does not cover. 

• It does apply to the care element of your fees: help with personal hygiene, continence management, support at mealtimes, and similar tasks.
• It does not cover accommodation costs. And it is the accommodation costs, the roof over your head, your meals, and day-to-day living expenses, that can amount to tens of thousands of pounds per year and which are subject to a separate financial assessment by your local council. 

For a full breakdown of what is and is not included, the Care Information Scotland website is a useful reference point.

How the Financial Assessment Works

Your local council will carry out a means test to determine how much you should contribute towards your accommodation costs. For 2025-26, the capital thresholds in Scotland are:

• If your assessable capital exceeds £35,500, you will be expected to meet the full accommodation costs yourself. You are classed as a self-funder.
• If your capital falls between £22,000 and £35,500, a tariff income calculation applies: capital above the lower threshold (£22,000) is treated as generating notional income at £1 per £250.
• If your capital is below £22,000, the council will contribute the maximum standard rate towards your accommodation costs.

For reference, the interim standard rates for 2025-26 are £881.98 per week for residential care and £1,013.05 per week for nursing care. Even as a self-funder, your free personal and nursing care payments will still be applied against those costs. The balance, however, remains very substantial.

If the council is contributing to your care costs, you will be required to contribute most of your income towards the accommodation element. However, you will be allowed to keep a Personal Expenses Allowance of £35.90 per week (2025-26 rate) for your personal use.

Your Home and the Financial Assessment

For most people, the family home is their most significant asset and, understandably, the one they are most concerned about. In Scotland, the value of your property is generally included in the financial assessment, but with some important exceptions:

• Spouse or civil partner disregard: If your spouse, civil partner, or a dependent relative continues to live in the property, its value will be disregarded entirely from the means test.
• 12-week property disregard: For the first 12 weeks of a permanent care home stay, the value of your home will be excluded from the assessment, provided your other capital is below the upper threshold. This gives you time to consider your options.
• Deferred Payment Scheme: If you are unable to meet the full cost of care from income and other assets, your council may offer a deferred payment arrangement. A Charging Order is placed over the property, and the accumulated debt is recovered when the property is sold.

A Word on Deliberate Deprivation

It is natural to want to protect your estate and leave something for the people you care about. However, simply gifting assets to family members or transferring property in the belief that it will remove them from the calculation is both legally risky and, in many cases, ineffective.

If a local authority concludes that the primary motivation for disposing of an asset was to avoid care home fees, it can treat that asset as still belonging to you, a concept known as notional capital. Councils in Scotland can look back at asset transfers without any fixed time limit. The Scottish case of Yule v South Lanarkshire Council [2001] 4 CCLR 383 established that a council was entitled to take account of the value of a property that had been transferred to a family member more than 18 months before the owner entered residential care. The key question is not how long ago the transfer was made, but whether there was a reasonable expectation of needing care at the time.

This does not mean that thoughtful estate planning is off the table. It means it must be done properly, with a genuine purpose and with proper legal guidance. For a full account of what constitutes deliberate deprivation, the Care Information Scotland guidance is a helpful starting point.

Planning Ahead: Where to Start

A well-drafted Will is an essential foundation, particularly for couples who own property together. Will provisions incorporating liferent or survivorship trust arrangements can help to protect a share of the family home against a future care assessment, should one partner require residential care after the other has died. These arrangements are generally more robust than outright lifetime gifting and can be structured to serve a legitimate and considered estate planning purpose.

A Power of Attorney is equally important and is often the piece of the jigsaw that people overlook until it is too late. A Continuing Power of Attorney allows a trusted person to manage your financial and property affairs if you lose capacity. A Welfare Power of Attorney allows decisions to be made about your care and wellbeing. Without these in place, your family may face a costly and time-consuming application to the courts under the Adults with Incapacity (Scotland) Act 2000 at exactly the moment when they have other things to deal with.

We Can Help

Care fee planning is not something to leave until a crisis. The earlier you take advice, the more options available to you. 

Whether you are thinking about your own future or helping an elderly parent navigate what can be a complex system, our Private Client team is here to help you understand your position and put the right arrangements in place.

If you would like to speak to someone about later-life planning, call us on 01620 892138 or get in touch online.