NHS Funding for Care Homes Explained

The NHS provides funding towards care home fees through two distinct schemes: NHS Continuing Healthcare (CHC), which covers the full cost of care for people with a primary health need, and NHS Funded Nursing Care (FNC), which contributes a flat weekly rate towards nursing costs for eligible residents who do not qualify for CHC.

Many families only discover these entitlements after they have already started paying privately for care. Understanding how NHS funding works, who qualifies, and how to apply could make a significant difference to the total cost of care. This guide explains both schemes, the latest 2025/26 rates, and what to do if you believe a claim has been wrongly refused.

NHS Funding for Care Homes: At a Glance

What Is NHS Continuing Healthcare?

NHS Continuing Healthcare is a fully funded, non-means-tested package of care arranged and paid for entirely by the NHS for adults aged 18 and over who are assessed as having a primary health need, where the main aspects of their care requirement are health-related rather than social-care-related.

Unlike local authority funding, NHS Continuing Healthcare is not subject to a financial assessment. It does not matter how much a person has in savings, property, or income. If the eligibility criteria are met, the NHS is legally required to fund the full cost of care, including accommodation, in any setting outside hospital, including residential care homes, nursing homes, or a person's own home.

The scheme is governed by the National Framework for NHS Continuing Healthcare and NHS-funded Nursing Care, published by the Department of Health and Social Care, and underpinned by the NHS Commissioning Board (Responsibilities and Standing Rules) Regulations 2012. Since July 2022, commissioning responsibility has sat with Integrated Care Boards (ICBs), which replaced Clinical Commissioning Groups (CCGs).

"NHS Continuing Healthcare is still available in 2026. Families sometimes hear that CHC is being 'phased out'. In reality, CHC remains a legal entitlement set out in the National Health Service Act and the Care Act. What has changed for many people is simply the experience of accessing funding, due to increased demand and tighter capacity."Farley Dwek, care funding specialists

Who Qualifies for NHS Continuing Healthcare?

Eligibility for NHS Continuing Healthcare is based entirely on the nature, intensity, complexity, and unpredictability of a person's health needs, not their diagnosis, age, or financial situation.

The eligibility test is whether a person has a "primary health need." This is not a list of qualifying conditions. The assessment looks at the totality of needs and asks whether, when considered together, those needs are primarily health-related rather than something that could be met within local authority social care responsibilities.

Factors the assessment considers include:

• Nature: The type of care needed and the extent to which it is hands-on nursing or medical care
• Intensity: The frequency and degree of care required throughout the day and night
• Complexity: How multiple needs interact with each other and the skill required to manage them
• Unpredictability: The likelihood of sudden deterioration or crisis requiring urgent clinical response

Conditions that frequently, though not automatically, lead to CHC eligibility include advanced dementia, complex neurological conditions, end-of-life care needs, severe Parkinson's disease, and significant mental health needs requiring clinical management. However, the assessment is individual so the same condition in two different people can produce different eligibility outcomes.

How competitive is the process? NHS England's official data is instructive. <As at Q3 2024-25, there were 52,008 people eligible for NHS CHC across England.> Across the 2024-25 financial year, 51,981 full assessments were completed and 80.5% were rejected. For standard CHC assessments specifically, only around 21% of those assessed are found eligible, a conversion rate that has fallen from 27% in 2017. This data underlines why early, well-prepared applications are critical.

The CHC Assessment Process: Step by Step

The CHC pathway follows a structured sequence set out in the National Framework. Understanding each stage helps families prepare effectively.

1. Initial referral — Anyone can request a CHC assessment: the individual, a family member, a GP, a nurse, a social worker, or a hospital discharge team. The earlier a referral is made, the better — many families only request one once care costs have already mounted.
   
   
2. The Checklist — A nurse or trained social worker completes the NHS CHC Checklist, a screening tool that determines whether a full assessment is warranted. If the checklist indicates that a full assessment is needed, the process moves to stage 3. If not, the outcome can be challenged.
   
   
3. Multidisciplinary Team (MDT) assessment — A team of health and care professionals completes the Decision Support Tool (DST), a structured assessment framework that scores needs across 12 domains including behaviour, cognition, communication, mobility, nutrition, and medication. The MDT makes a recommendation to the ICB.
   
   
4. ICB eligibility decision — The Integrated Care Board reviews the MDT recommendation and makes the formal eligibility decision. Most decisions should be made within 28 calendar days of referral, though in practice delays are common.
   
   
5. Care package arrangement — If eligible, the ICB arranges and funds a care package. In some cases, a Personal Health Budget (PHB) can be offered, giving the individual greater control over how their care is delivered.
   
   
6. Review — CHC funding is reviewed within three months of the initial award and then at least annually thereafter. Needs can change, and funding can be withdrawn following reassessment if a person no longer meets the primary health need criteria.
   
   

Fast-track CHC is a separate, expedited pathway for people with a rapidly deteriorating condition who may be approaching the end of life. An appropriate clinician such as a consultant, registrar, or GP, completes a Fast Track Tool rather than the full DST process. The fast-track route carries a 94% approval rate, compared with 21% for standard assessments, reflecting its focus on urgent, terminal care needs.

What Is NHS Funded Nursing Care?

NHS Funded Nursing Care (FNC) is a weekly payment made by the NHS directly to a nursing care home to contribute towards the cost of nursing care delivered by registered nurses employed by the home. It is not means-tested and does not cover the full cost of a care place.

FNC is available to people who:

• Live in a care home registered to provide nursing care
• Have been assessed as requiring the support of a registered nurse
• Are not eligible for the higher level of support provided by NHS Continuing Healthcare

The key distinction is that FNC is a contribution, not a full-funding package. It reduces the total fees a resident or their family pays, but it does not cover accommodation or personal care costs.

2025/26 FNC Rates (England)

From 1 April 2025, following a 7.7% uplift announced by the Department of Health and Social Care:

• Standard rate: £254.06 per week (up from £235.88 in 2024/25)
• Higher rate: £349.50 per week (up from £324.50 in 2024/25)

The higher rate applies only to a small group of residents who were receiving FNC continuously under the previous two-band system before November 2007 and have maintained eligibility since. New applicants are assessed for the standard rate only.

The FNC payment is made directly to the nursing home by the ICB. If a resident is self-funding, this amount is typically deducted from the total fees charged. It is worth checking the nursing home contract to confirm exactly how FNC is applied to the bill, as practice varies between providers.

"We recommend that people highlight the new FNC rate to the manager of your nursing home, and check your bills to make sure the increase is reflected from 1 April." Beacon CHC

Is NHS Continuing Healthcare Means-Tested?

No. NHS Continuing Healthcare is entirely non-means-tested. A person's savings, pension income, property value, and other assets are completely irrelevant to eligibility. The only test is whether the person has a primary health need.

This is a legally significant distinction. Local authority social care funding is means-tested against the £23,250 upper capital limit in England (2025/26). NHS CHC operates under an entirely different framework as it is a health entitlement, not a social care benefit. If the NHS is the appropriate funder, the NHS must fund in full, regardless of a person's financial position.

Families who have been self-funding care should be aware that if a retrospective CHC assessment finds that eligibility should have been established at an earlier point, it is possible to make a Previously Unassessed Periods of Care (PUPoC) claim. This can result in the NHS reimbursing some or all of the care costs paid during the period when CHC should have been in place.

How Does NHS CHC Interact with Other Funding?

Understanding how CHC sits alongside other funding routes helps avoid overlap and ensures the right scheme is applied at the right time.

Where a person has both health and social care needs but does not meet the full CHC threshold, a "joint-funded" arrangement may be agreed between the ICB and the local authority, with each contributing a portion of the overall care package cost.

Can You Appeal a CHC Decision?

Yes. If a CHC application is refused or funding is withdrawn following reassessment, there is a formal appeals process with multiple stages.

The appeals pathway is:

1. Local resolution — Request that the ICB reviews its decision. The ICB must consider whether the correct process was followed and whether the eligibility criteria were applied correctly.
2. Independent Review Panel — If local resolution does not resolve the dispute, the case can be referred to NHS England for an independent review.
3. Parliamentary and Health Service Ombudsman — The final escalation route if the independent review does not produce a satisfactory outcome.

Appeals can be made on the grounds of process (for example, if the correct assessment tools were not used or the MDT was not properly constituted) or on the application of the eligibility criteria to the individual's needs.

Given that 80.5% of CHC assessments result in rejection, and that the Ombudsman has previously found systemic failings in how the scheme is administered, an unsuccessful first application should not necessarily be treated as a final answer. Seeking independent specialist advice before and during the appeals process significantly improves outcomes.

Free specialist advice is available. NHS England funds an independent information and advice service through Beacon CHC, operated in partnership with Age UK, Parkinson's UK, and the Spinal Injuries Association. Beacon provides up to 90 minutes of free personalised advice from a trained CHC adviser. Contact: 0345 548 0300 or visit beaconchc.co.uk.

CHC in Scotland and Wales

NHS Continuing Healthcare operates differently outside England.

Scotland — CHC does not exist in Scotland. It has been replaced by Hospital Based Complex Clinical Care, which applies only where care must be delivered in a hospital setting. Outside hospital, personal and nursing care are provided free of charge to anyone assessed as needing them, regardless of finances, under Scotland's Free Personal and Nursing Care policy.

Wales — NHS Continuing Healthcare is available in Wales and is administered by Local Health Boards (LHBs) rather than ICBs. The eligibility framework mirrors England's primary health need approach. The 2025/26 NHS FNC rate in Wales is £201.74 per week, compared to £254.06 in England.

How Living Developments Can Help

Navigating NHS funding while also making a care decision for a loved one is genuinely complex. The CHC process in particular requires careful preparation such as gathering the right evidence, ensuring the correct assessment tools are used, and understanding the grounds for challenge if eligibility is refused.

At Living Developments, our three care homes in Cumbria, Merseyside, and Lancashire work closely with families throughout this process. Our team can help you understand whether a CHC or FNC assessment should be requested, liaise with ICBs and GPs, and signpost you to specialist funding advice.

• The Millfield, Cumbria — 01768 772099
• The Willows, Lancashire — 01253 693961
• Elmtree House, Merseyside — 01925 291492

You can also make a care enquiry online and a member of our team will be in touch.

Frequently Asked Questions: NHS Funding for Care Homes

Does the NHS pay for care home fees?
The NHS pays the full cost of care home fees for people who qualify for NHS Continuing Healthcare, including accommodation, personal care, and nursing care. For those who do not qualify for CHC but need nursing care, the NHS contributes £254.06 per week (2025/26 standard rate in England) through NHS Funded Nursing Care. This does not cover the full cost of a care place.

What is the difference between NHS CHC and NHS Funded Nursing Care?
NHS CHC is full funding for people with a primary health need so it covers everything and is not means-tested. NHS FNC is a partial contribution towards nursing costs only for people in nursing homes who do not meet the CHC threshold. Both are non-means-tested but cover very different levels of support.

How do I start a CHC assessment?
Ask any health or social care professional involved in a person's care like a GP, nurse, hospital discharge team, or social worker, to make a referral to the local ICB. You can also contact the ICB directly. The process begins with the NHS CHC Checklist.

Can CHC funding be backdated?
Yes. If it can be demonstrated that a person should have been assessed for CHC at an earlier point and would have been found eligible, a Previously Unassessed Periods of Care (PUPoC) claim can be submitted. This may result in the NHS reimbursing care costs already paid privately.

What happens if my loved one's CHC funding is withdrawn?
Funding can only be withdrawn following a full reassessment using the Decision Support Tool, confirming the person no longer has a primary health need. If you disagree with the outcome, you have the right to appeal through local resolution, then independent review, and ultimately the Parliamentary and Health Service Ombudsman.

Is CHC available in care homes that are not nursing homes?
Yes. CHC can be provided in any setting outside hospital, including residential care homes, nursing homes, or the person's own home. The setting is not the determining factor, the nature of the health need is.

How often is CHC reviewed?
The first review must take place within three months of an award. Thereafter, reviews are conducted at least annually. Needs can change, and if a review finds that the primary health need no longer applies, funding can be reduced or withdrawn.

For further reading, see our related guides: What Is Residential Care and How to Choose a Care Home.