Concerns about paying for residential care are nothing new. However, with more of us living into old age than ever before and increasing numbers of alzheimer’s and dementia diagnoses in old age, the prospect of making financial plans to pay for care – or care of a loved one – can be an intimidating prospect.
According to recent findings by Age UK, those who require residential care – and own their own home – could be forced to pay more than half of their property’s value for a 30-month stay. That’s approximately £93,000 on average.
In spite of this, more than three-quarters of over-45’s fail to consider adult social care as part of their financial planning.
What’s more, experts say that the system for funding adult social care is, at best, inconsistent, and at worst, little more than a lottery. One in four older people are likely to need care when they reach old age, but it is often unclear what, if any, financial support is available to meet the costs.
Understanding the rules, regulations and obligations surrounding residential care is vitally important if you are to receive the support you need and avoid costly care bills where possible. Unfortunately, this is far from straight forward, and expert advice could be invaluable for you and your family.
Who pays?
If you require residential care in the future, it is possible that the local authority or local NHS trust will be responsible for paying part – or all – of your care home fees. This largely depends upon the value of your estate and where you live.
In short, if your estate is valued any more than £23,250 (England and Northern Ireland), £23,750 (Wales) or £25,250 (Scotland), you will be responsible for paying your own care home fees. Those amounts are due to rise in 2020.
If your estate equates to any less than these amounts, you will have to contribute towards at least some of your care costs. This is means-tested and will depend upon things like income, savings and any property you might own, if you are living in a care home for more than 12 weeks and expect to stay there long-term. However, any property you own will not be considered if your spouse still lives there. Equally, where your savings are less than £14,250, only your income will be considered in any assessment.
Protecting your pocket
With such considerable costs involved, it is important to consider ways in which you can make your money go further and cover the cost of your care. There are a number of options available in preventing your assets being ‘swallowed up’ by care home fees.
You may choose to ‘gift’ your assets to children or other family measures as a form of inheritance. This could be in the form of money or other assets, like property.
It is important you seek legal guidance before deciding to gift your assets and that you understand the legal implications of doing so.
Sticking to the rules
Before the local authority will agree to contribute towards your care costs, they will often carry out a financial assessment, investigating what assets you may have owned previously, in addition to any assets you currently own. They will often look at your ‘ownership history’ and trace any property between members of your family.
As such, it is important that you are completely open and honest while an assessment is carried out.
If your local authority believes that you have purposefully gifted your assets to avoid paying care costs, this is known as ‘deliberate deprivation of assets’ and the total amount of gifted assets may count against you when the local authority contribution is calculated. You may be liable to contribute to your own care based upon assets you no longer own.
A financial assessment can take place at any time – not just at the point your start a stay in residential care. The local authority may investigate your gifting of assets at any stage during your care and may take steps to recover their costs if they believe you have carried out ‘deliberate deprivation’.
Getting the right advice
Before making permanent financial arrangements to cover any future care costs, you should speak to a qualified legal expert. Stephensons has a wealth of experience in helping individuals and families prepare for the financial implications of adult social care. We can also advise on how best to handle your assets, the right procedures to take and solutions – such as setting up a trust – which could protect your savings and property from costly care bills.
If you would like any more information, or would like to speak to a member of our team, please call 01616 966 229.
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