Currently, you will be responsible for the full cost of your care home fees if your capital is assessed at being over £23,250. This includes your property, any land you own and things such as stocks, shares and premium bonds.
It is important to remember that it does not include the full amount of jointly owned assets. Only 50% of joint savings and pensions etc. will be included. Also, if your home is owned jointly with someone else, only the sale value of the part you own (your beneficial amount) will be taken into account. Your home may not be counted towards your capital at all if someone of relevance still lives in it. This includes:
- a partner or former partner, unless estranged
- an estranged or divorced partner if they are a lone parent
- a relative over 60 years old
- your child who is under 18
- a disabled relative
The amount included in your capital will be the value of your property, less any mortgage still owed on it and less 10% to cover the cost of selling the property.
If the value of your capital includes your home, care home charges may be deferred until it has been sold, which may be when you die. In this case, those in charge of administering your estate will pay what you owe when the house is sold. If you are selling your home to pay for your care, the local authority will ignore the first 12 weeks of your care to give you time to sell it. It is also good to know that if you move into a care home and your property is left vacant, you should receive a full refund of council tax.
If the value of your capital falls below £23,250 whilst you are in a care home, the local authority will help towards costs (as below), but you might have to move into a less expensive home if the one you are in charges more than the local authority usually pays.
Certain allowances, such as attendance allowance and war widows pensions are not included in any means test.
Local authority funding
If your capital is less than £23,250, the local authority will contribute towards the cost of your care home fees. You will get the maximum support if your capital is less than £14,250, although you will have to contribute your income, less £23.90 per week for your personal expenses. If your income is between the 2 figures, you will get support and will have to contribute your income, as above, plus £1 per £250 you have above the lower limit of £14,250.
The local authority will usually choose the care home for you based on your needs. If you want to stay in a home that is more expensive, this may be possible if you have someone who can top up the payments on a long term basis. You are not allowed to top up out of your capital below £23,250.
You can find out more about paying for care on the AgeUK website.
It is important to make sure that any financial assessment is completed correctly.
Many clients – or families of clients – contact us regarding issues relating to their home and possessions and how to protect them if they, or their parents have to go into care. One of the most frequent questions we are asked is “mum’s had dementia for years. She’s got to go into a home and we’ve been told we need a power of attorney”, to which the reply is almost always, “sorry it is too late, you have to go to the Court of Protection” – a process that is a lot more expensive and intrusive.
The rules are clear and careful advice regarding financial and future planning is necessary. For example, if you are going to make gifts to friends and relatives, make sure they comply with the rules so they won’t be disregarded from your estate when you die. The Law Society has issued guidance to solicitors on this, making us best placed to advice you on this issue.
Make your will now, so everyone is sure what should happen to your estate when you die and there will be no confusion, and make sure you have a power of attorney in place early so that your attorneys can take over when they need to without having to apply to the Court of Protection, which will certainly delay issues.
Contact us now to make a free of charge appointment in which we can discuss your needs and help you find the right solution.