Paying for care

Many people want to make sure that they will leave enough money to their surviving spouse or as an inheritance to their relatives. However, sometimes relatives can find themselves faced with a huge bill when the time comes, or forced to sell the family home to release equity. However, social care isn’t free and if your local council is arranging for care, then they’re going to want to carry out a financial assessment to ascertain who should be paying for it. The truth is, that you could need to fund the care and that may mean all of it.  During this article we cover in detail what the thresholds are, any exclusions and what’s termed as deprivation of assets.

When it involves financial assets it’s important to seek support from a financial adviser who will be  ready to advise what you can do to guard your assets. In practise if the person enquiring already knows that they’re going to need future care, then it’s unlikely that they will be able to do anything aside from foot the bill.

What are the thresholds?
Care funding is means tested by the council, especially once they are arranging the care home for the patient. Currently, if the entire amount of income and capital is over £23,500 a year, then the dementia patient will be expected to pay for all of the care costs. Savings and investments are taken into consideration, pensions and dividend payments are also all included. If the entire income is below this amount then there could be some support available from the council. However, the council will include the house in their valuation of assets. So they’ll check out the property value, minus any mortgage that’s outstanding. They’ll allocate an amount of 10% from which might cover the associated costs of selling the property. What are the exclusions? In short, a house won’t need to be sold if your partner/spouse is to continue living there, unless they’re now estranged from you. Additionally if the dementia patient has a child under the age of 18 living within the property, or a relative who is disabled who lives at the property, then the council won’t include this in the evaluation of assets that the dementia patient has. Similarly, if the dementia patient requires to stay in a care home for a short period of them, then the house value won’t be taken into consideration when evaluating the dementia patients assets.

However, as dementia progresses, often around the clock care is required, particularly within the later stages. So either the dementia patient will transfer to a care home at some point within the future or there will be a personal care team to provide round the clock care, within the home.

What is deprivation of assets?
The reality is, that property can’t be purposefully put into trust to avoid paying care home fees and it cannot simply be given away. Additionally, savings can’t be depleted so as to avoid having to pay social care fees. Again if the dementia patient has gifted their assets and property, this will still be seen as depriving themselves of assets. Now this definition only applies if at the time they knew that they might need future care which in making a gift of their property or significantly reducing their assets was done to intentionally wipe out their assets and avoid paying for care.

If the dementia patient elects to place their property(-ies) into trust then they need to do so with the recommendation of a financial adviser on what the valid reasons are for doing so, otherwise it’ll be taken as a deprivation of assets. It’s not just putting your property in trust either. If you deplete your savings, or transfer the title deeds of the property over to somebody else, this will all be seen as efforts to rid yourself of assets.

Equity release
Some people go down the route of releasing equity from their home to assist them to cover their care. However these should all be talked through with a financial adviser as they will be expensive and they do involve risks, like all financial products.

Summary
The earlier that future care planning is taken into account and there ways in which care can be funded, the better prepared we will be should the necessity arise within the future. Like anything financial, an adviser can identify what can and what shouldn’t be done and how to be as transparent as possible.

For more details on care that can be provided from within the home, contact us for more information.

This article was created in May 2019 supported the present financial information available at the time. We shall review this text and supply an update should anything change.