Long Term Care
One of the hardest decisions in your life will be to admit that as a son or daughter you cannot cope looking after your mother or father and that they need to move into either residential or a nursing care home.
As if that decision wasn’t hard enough, you then have the complexities of how to find a home that you consider suitable and then the more daunting task of how to arrange to pay for the care.
With the 1999 Royal Commission report, Funding of Long Term Care, indicating that about 20% of men and 33% of women will go into residential care or nursing homes, this looks like an issue we are all going to have to face at some point in our lives.
Once a suitable care home is found, the complexities of how to fund the place will be the next hurdle to overcome. If funding can’t be arranged in time, the place that you have looked long and hard to find, could easily be taken by a family who has already arranged funding.
As a rough guide to funding in England, (Scotland, Wales and Northern Ireland apply different rates) once an individual requires care, they fall into one of the following categories and are treated accordingly:
1) Those needing care that are single and currently have assets of over £22,250 have to pay for their own care, be this at home or in a residential or nursing home.
2) Those single people needing care who have assets between £13,500 and £22,250, following an assessment of needs by the local authority, the care fees will usually be paid by the local authority, but in turn they take the state pensions to help pay for such costs, leaving the individual with a personal allowance of currently £21.15 per week. Then for every segment of assets worth £250 above the lower limit, the personal allowance is reduced by £1 a week.
3) Those with assets below around £13,500, the local authority will assess their needs and usually meet costs of care, but in turn take the state pensions to help pay for such costs, leaving the individual with a personal allowance of currently £21.15 per week.
With the increase in property values over recent years it isn’t difficult for individuals requiring care to fall into the first category. A main concern for a number of our clients is how to ensure that the inheritance they wish to leave to their family, which they have worked hard to acquire, doesn’t end up being eroded by care fees.
Some may feel that by transferring their home into the names of their children will ensure that the local authorities can’t lay a claim to the value of it. “They can’t take off me what isn’t mine”. NOT TRUE.
This route sounds so logical doesn’t it – but local authorities have the powers to investigate that “deliberate deprivation” of assets hasn’t taken place prior to an individual requiring funding for care home fees.
Age Concern’s definition is that “deliberate deprivation occurs when a resident transfers an asset out of his or her possession in order to put him or herself in a better position to obtain assistance”. Examples of this are when the title deeds to a property are transferred to somebody else or large capital sums are spent or converted into investments bonds with life insurance. They can even take into account what they consider the reduction of capital through substantial expenditure on extravagant living. The list is extensive and as you can see there is no doubt that the wrong decision made at the wrong time will lead to serious complications later on.
There are other benefits that could be claimed for, such as Attendance Allowance and Pension Credit but without guidance, applying for these benefits can be a frustrating process.
Not many families are aware that there are now regulated products on the market that, with the right advice, can provide tax-free funding for care home fees for life. These products can be tailored to suit each individual’s needs and can ease the worry about how to fund for the ongoing cost of care.
For further information on any of the aspects mentioned in this article, please contact Liz Faye, our Long Term Care Adviser and she will be happy to assist you.
