We are often asked about care fee planning – it is one of the things that most people moving into a care home are concerned about.

Understandably, you will want to fully understand the costs so that there are no unexpected surprises.

What Government support can I expect if I need care?

If your loved one has savings currently totalling more than £23,250 (in England) they will not qualify for assistance from your Local Authority and they will need to meet their care home fees in full.

If their savings drop below £23,250 they will qualify for financial help from their Local Authority.

Many people are confused about whether the value of their relative’s home is included in the calculations.

Broadly speaking, a person’s home is not included in the means test if:

  • The spouse still lives in the home
  • A relative over the age of 60 lives in the home
  • A disabled relative lives in the home
  • A child under the age of 16 lives in the home
  • The person is in the first 12 weeks on needing permanent care
  • The care is being provided on a temporary basis

Where a property is jointly owned with someone who is not on the above list, we recommend that you speak to a specialist care fee provider about the way this may have been assessed by the Local Authority as valuations of part-shares in a property are not always carried out correctly.

There are a number of specialist care fee providers who will be able to advise you including Eldercare solutions.

I have heard that the system is changing?

You may have read or heard in the news about changes to funding in social care. The new system, which planned to have a cap of £72,000 placed on the costs that an individual would pay for their ‘eligible’ care needs, was originally set to be introduced in April 2016.

However, these plans have been put on hold and are not set to be introduced until at least 2020. We will of course keep you updated when the system changes – so watch this space!

What are the 12-week property disregard and deferred loan?

The Local Authority must disregard the value of your relative’s property for the first 12 weeks of them moving into a care home on a permanent basis, provided that their other savings and capital total less than £23,500.

To qualify for this financial support, the Local Authority will first carry out a ‘care needs assessment’ to establish and agree that your relative does actually need to move into a care home. If they do not feel that residential care is necessary, they can refuse to make this contribution.

The Local Authority will have a standard amount that they will be prepared to pay towards care and if this is less than the private fee charged by your chosen care home, a top up fee may be required. This can be made from your relative’s remaining savings, provided that they have between £14,250 and £23,250 at their disposal.

After the initial 12 weeks, if your loved one’s home remains unsold, the Local Authority may be able to lend money to pay for your relative’s care, through a ‘deferred payment agreement’ or ‘deferred loan’, which will be recovered when the property is finally sold.

If your relative is considering renting out rather than selling their property outright, it is important to seek advice to ensure that any tax implications, such as Capital Gains Tax, are taken into consideration.

Is there any other financial help available?

Attendance Allowance is a non-means tested, tax-free state benefit which is payable to all those over the age of 65 who have needed care for longer than six consecutive months.

Attendance Allowance can continue to be paid whilst your relative is living in a care home, provided they are paying for the care themselves and are not funded by the Local Authority.

What about free nursing care?

If your relative is assessed as needing nursing care, as opposed to just needing personal care then, regardless of their financial situation, they will be entitled to receive either a contribution towards care fees or have the cost fully met by the NHS.

Currently, the Funded Nursing Care contribution (FNC) is £155.05 per week.

New residents will be assessed by an NHS nurse at the time they enter a care home or are discharged from hospital, to determine whether they are eligible for NHS Continuing Healthcare (which covers full care costs) or for the lower weekly FNC amount.

What happens if the money runs out?

Your relative’s Local Authority has an obligation to fund care once their capital reaches £23,250, provided they meet the eligibility criteria.

However the Local Authority will have a maximum amount that they are prepared to pay and any shortfall in fees may need to funded by a family member, known as a ‘third party top-up.’

What are the options if my relative needs to pay for their care?

If your relative’s savings push them above the means tested threshold, they will generally be responsible for the funding of their own care home fees.

However, with careful planning it may be possible to structure their finances in such a way that care home fees can be paid indefinitely, with some of their capital protected which they can pass on to their beneficiaries.

There are a number of options including:

  • Paying directly from capital
  • Investing the capital
  • Care fee plans (also referred to as a care fees annuity)
  • A combination option

As care funding is an important decision, it makes sense to consult with a firm of financial planners with particular expertise in elderly care advice.

There are many to choose from and we are pleased to suggest Eldercare Solutions.

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