Minimum Income Guarantee and Tariff Income for Care in England: 2026/2027 Rules Explained

What the Minimum Income Guarantee Protects

When a local authority carries out a financial assessment for care at home under the Care Act 2014, it calculates how much your parent can afford to contribute toward the cost of their care package. The Minimum Income Guarantee (MIG) is the floor — the amount of weekly income the council must leave in your parent's hands after charging for care. The council cannot take everything.

For 2026/2027, the MIG rates are:

• Single person over Pension Credit qualifying age: £241.45 per week
• Single person aged 25 or over (under Pension Credit age): £178.50 per week
• Couple, both over Pension Credit qualifying age: a combined amount based on the applicable rate

These figures are set annually by the Department of Health and Social Care through the social care charging circular. The council must apply them — they are not discretionary.

The MIG only applies to non-residential care (home care, day care, community services). If your parent moves permanently into a residential care home, a different calculation applies — the Personal Expenses Allowance (PEA), currently £31.80 per week, which is the pocket money they keep for personal items like toiletries, clothing, and newspapers.

How Tariff Income Works

The tariff income rule bridges the gap between the upper and lower capital limits. If your parent's assessable capital is between £14,250 and £23,250, the council treats every £250 of capital above £14,250 as generating £1 per week of notional income — the "tariff income." This amount is added to their actual income when calculating how much they must contribute toward care costs.

Example: if your parent has £20,000 in savings:

• Capital above the lower limit: £20,000 - £14,250 = £5,750
• Tariff income: £5,750 ÷ £250 = 23 (rounded up)
• Weekly tariff income: £23

That £23 per week is added to their pension and any other income. The council then deducts the MIG and charges the remainder as the care contribution.

The tariff income is not deducted from the savings themselves: it is a notional amount used in the contribution calculation. If actual savings are spent, the council should recalculate the tariff income when it reassesses the financial position; below £14,250 there is no tariff income, subject to an income-based contribution only.

What Counts as Capital and What Doesn't

The financial assessment counts most forms of savings and investments:

• Bank and building society accounts
• ISAs and premium bonds
• Stocks, shares, and investment funds
• Property (only if the parent has moved permanently into a care home and no qualifying person still lives in the property)

Key disregards — assets the council must ignore:

• The value of the home if a spouse, partner, dependent child under 18, relative aged 60+, or disabled relative continues to live there
• The first £10,000 of ex gratia payments (war pensions, etc.)
• Personal possessions (furniture, car, jewellery)
• Payments from certain specified schemes

Attendance Allowance and PIP are not always disregarded. In a non-residential financial assessment, Attendance Allowance and the daily living component of PIP can be taken into account, while the PIP mobility component is disregarded. Ask the council to show how it has applied the benefit rules. If a care-home stay is funded by the NHS or local authority, Attendance Allowance is normally paid for the first 28 days and stops from day 29.

Self-Funder Rights: Above £23,250

If your parent's assessable capital is above the upper capital limit of £23,250, they are classified as a self-funder and must pay the full cost of their care. But self-funders still have statutory rights under the Care Act:

Right to a needs assessment. The council must assess your parent's care needs regardless of their financial position. The assessment is free.

Right to request the council arranges care. Self-funders in residential care can ask the local authority to arrange their placement. The council may charge an arrangement fee, but the advantage is that the council's commissioned rate is often lower than the rate a self-funder would negotiate alone. The council also monitors the placement as part of the arrangement.

Right to a financial reassessment. As assets deplete, your parent will eventually cross the £23,250 threshold. Contact the council before this happens — the council will not backdate funding to before the first contact date. Timing the reassessment request is critical.

Protection against deprivation of assets. If a self-funder has legitimately spent down their savings on care costs, the council cannot treat this as deliberate deprivation of assets. The "deprivation" rules target transfers made with the significant motivation of avoiding care charges — not normal care expenditure.

Our Dementia Care in England guide includes the full financial assessment walkthrough, including worked examples of the tariff income calculation, the MIG protection, and the template letter for triggering a reassessment as capital approaches the upper limit.

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