Paying for elderly care: Q&A with Which? Elderly Care

Liz46

Much of the money from my mother's house went on care home fees.

Our situation is that we are second time married. We own our home as tenants in common with my husband leaving his share of the house to his children and me to mine. The surviving partner has the right to live in the house as long as it is maintained. We have a joint account for bills but all our savings are kept separate and left to our children, not each other.

Does this sound sensible please?

Liz 46, Your situation sounds very similar to carole01, so we suggest that you read our answer, which we hope will help.

carole01

We don't own property but we have sole savings accounts (Isa's and Premium bonds) if one of us needs to go into a care home would the local authority have legal access to the others savings accounts.

If only one member of a couple requires care home funding then the council do not have the legal authority to view the bank accounts for the other one - only the income and savings of the person requiring care can be taken into account in the assessment (and even then 50% of occupational/private pensions can be passed back to the spouse/civil partner remaining at home). However they may ask for these details to ensure that the spouse/partner remaining at home has sufficient savings/income to live on.

If you choose to have a financial assessment following a needs assessment (see our answer to Izabella, above) and fall beneath the means test threshold, the local authority won't fund your care if you don't give them access to the relevant savings accounts as part of a financial assessment. If your individual savings are less than £14,250 and the local authority has assessed that you need to move to a care home, then they will pay all your care home fees. If your savings are between £14,250 and £23,250, then you will have to contribute to the fees (see also our answer to Nana3, above). More than £23,250 and you will have to pay your own fees until such a time as you fall beneath the threshold.

We explain what happens when savings run out on our page Self-funding a care home.

Regalo

Although both fit and healthy, I would like to know how we can ensure that our family receive at least some of the proceeds from our house rather than it go into care home fees. Our house is in both our names and at present our wills leave the estate to each other and on both our deaths it is to be shared equally amongst our children. We have worked hard in our lives and want to ensure that there is a legacy safeguarded for the family. How do we achieve this?

There are many methods suggested by law firms and financial advisers with regards to how to can 'protect' your assets from care costs, however the simple answer is that there is no absolute way to safeguard your assets.

While you may wish to discuss legal arrangements such as will trusts and lifetime trusts with your solicitor, they should explain to you that rules relating to deliberate deprivation of assets may still apply.

A deprivation of assets occurs where a local authority believes that you have intentionally deprived yourself of an asset to avoid it being used to pay for care. In these instances they may decide to pretend that you still have the asset or take legal action through the courts to reverse any transaction.

In certain circumstances, changing the ownership of your property from a 'joint tenancy' to 'tenants in common' can protect a portion of the property from care costs. Speak to your solicitor for more information.

Izabella

What happens please for the following scenario:
Pensioners with a mortgage, house in one name only
No savings

What would the choices be if any, should one need care? Thank you

Regardless of income, everyone is entitled to a local authority needs assessment should the time come when one or both of you need care either at home or in a care home. If the result of this assessment is that the council draws up a care plan for you, then you will also have a financial assessment.

If it is care at home that is required or just one of you is moving into a care home, then the value of your home won't be taken into consideration.

Nana3

My Mum has less than the £23, 250 in savings but I was told during her assessment that she has to contribute because her savings are at the top end of this limit. Huge bills keep coming.
So this figure is a myth isn't it?

I discovered top up fees paid for by the family when my mum went into care, for the best care homes they are huge, can I use her savings to pay them?

Also care homes charge a huge range of fees, so choice is only for the wealthy, most LCC care homes are full, it's inevitable that if you need care you will pay all you have isn't it?

I know too late about making the right provision in your will, leaving money in trust, also safeguarding some of the value of the house. Not leaving everything to your spouse so that the children have no legacy after everything is taken in care home fees. My parents did non of that. But what is your opinion on how we prepare our finances for future care?

Thank you in anticipation for helping with such worrying financial issues for families.

There are two levels of threshold that the local authority works to. If your mum's savings and assets are less than £14,250, then all her bills will be paid by the local authority, but when someone's capital is between £14,250 and £23,250, then a contribution on a sliding scale would be made. The rules are complex, so if you go to Getting local authority funding for a care home on the Which? Elderly Care website you will find more information.

For top-up fees, they have to be paid by a third party and not from your mother’s savings, which is why they are more usually referred to as third-party top-up fees. However, do bear in mind that if someone is assessed by social services as needing a care home, that they have a duty to meet this need. Furthermore, if a resident has under £23,250 in income and assets, the local authority must assist in identifying a care home that doesn’t require a top-up, has a vacancy and meets the assessed needs.

If you want to talk through options for planning for future care, we have a free Elderly Care Money Helpline where we can give you more information.

Nan67

Is it always the case that a home owner's property must be sold to pay for care should it become necessary? What happens if the property doesn't sell quickly enough? Who foots the bill for the ongoing care?

A homeowner's property doesn't necessarily have to be sold to pay for care (we mention above how lots of people are letting their homes to pay for care), although if that person has no other form of savings or other assets and lives alone in their home, then it's a possible option. This will especially be the case if the local authority is partially or fully funding the place in the care home.

However, if a property isn't selling, all local authorities in England are now required to offer a long-term loan known as a deferred payment agreement to people who meet certain criteria. If you qualify for a deferred payment agreement, you can't be forced to sell your home during your lifetime. Councils must now wait until the death of the resident at which point they can pursue the estate for the repayment of the money owed.

You can read more about deferred payments on this page of Which? Elderly Care, together with information about the 12-week property disregard, which means that under certain circumstances the local authority must ignore the value of a property for the first 12 weeks of an older person's stay in a care home.

MiniMouse

The most worrying aspect can occur when someone has to go into care and a decision has to be made regarding 'Continuing Care', particularly if the person needing care is a home-owner.

There is a massive backlog of hundreds of cases in Sussex regarding people not being properly assessed at the correct time and families having to fight to get an assessment done. This has left families paying out of their own pockets, believing that when the assessment is done they will be reimbursed, but waiting years for a final decision - and then finding that they do not qualify for reimbursement. Others have sold the person's home in a frantic rush, at a knockdown price just to release the money within the three month time limit that has been foisted on them (This was on BBC Radio Sussex this morning)

What should families do in this situation?

This is a complex question and so we are focusing here on people who are considering applying for continuing care. The NHS should make a decision within 28 days of it being decided that the person needs a full assessment for continuing healthcare. If it takes longer than this and the person needing care is deemed eligible for this support, then the NHS should pay retrospectively to the due date of completion.

With the 12-week property disregard period being available to those who meet the criteria, which can then turn into a deferred payment agreement with the local authority, there is therefore no imperative for a house to be sold within three months.

Kjnicholl

My Mum has recently been diagnosed with mixed dementia and I want her to come and live with me. If we sell her property and hold the money in case of her eventually needing to go into a care home, can I draw an income from the proceeds of the sale to cover the cost of caring for her myself?

We can quite understand why you might want to pursue this plan, Kjnicholl, but there are several issues that you need to be aware of before going any further, including:

1. If you draw an income for caring, you could technically be an employee of your mother, with attendant tax liabilities and minimum wage and holiday requirements. You might also need to be trained and regulated. On the other hand, if the money withdrawn is just used to cover expenses, such as taxis, adaptations and respite care, this is less likely to be an issue.

2. As your mother has been diagnosed with mixed dementia, does she have the capacity to require to such an arrangement? If she doesn't have the capacity, is there a registered lasting power of attorney in place? The Office of the Public Guardian (OPG) could consider this a conflict of interests and they might want to take into account how much money is paid per hour and the quality/amount of the care provided.

If you want to look into this further, then talk to a solicitor.

SueGWarks

I've read recently about investing in a buy-to-let room in a care home which you can then use yourself when the time comes. Is this a good idea and a safe investment? We are thinking of down sizing in the near future and wondered if this might be a solution to care home fees.

We suggest that you treat these schemes with extreme caution as this is an unregulated investment and therefore your money would be at risk.

DollyTed

My husband will soon be needing to be moved to a nursing home. We have no savings to speak of. I will be staying in our home. If I should die would my husbands fees then have to come from the sale of the house? Or, if I needed to go into care while my husband is alive and in care, would the house be used for both our fees? Thank you.

As long as you are living in your home, its value won't be taken into consideration when the local authority run their needs and financial assessments for your husband's care. If you look at our page on Paying for care, we explain the basics for how care home fees are paid.

If you were to also move into a care home or die while your husband is in care, then - yes - the value of your home would be taken into consideration for how your and your husband’s care fees are paid.

grannybuy

When the local authority charge, does any money in the name of the 'fit' spouse come into the case? (Scotland)

Without knowing more about your circumstances, it is difficult to say. For further information visit the Scottish Government website.

Dandibelle

What is the difference between attendance allowance and care allowance. Can both be claimed or just one or the other?

Attendance allowance is for people aged over 65 years who need help with personal care, such as washing, dressing or eating, due to an illness or disability. It isn't means tested and is available to anyone who meets the eligibility criteria.

Carer's allowance is available to family carers who are looking after someone for more than 35 hours a week. To be eligible you need to earn less than £110 per week after tax, among other criteria.

So, yes, both of these allowances can be claimed if the circumstances are right. You can read more about the criteria and how to claim on Which? Elderly Care: attendance allowance and carer's allowance.

BibiB

Alex, I've been paying a third party contribution of £886 per month for my mother's residential home since last July. It is financially crippling and was sneaked in under my radar by the local authority without me realising what I was letting myself in for. I've asked for a review and they have agreed. Is there any chance I could get back the money I have already paid, over five grand!?

While we can't comment on your specific case, you're doing the right thing asking your local authority for a review. You might also find our page on third-party top-up fees helpful as we explain when they can and can't be paid, among other issues. If following the review you are still unhappy, you might find it helpful to see our information about challenging a local authority decision.

SpeedyEdi

I would want to know the position re the purchase of an annuity as well. Can she explain the difference between English and Scots law.

You can purchase an immediate needs care plan in Scotland, but there are other factors that would need to be taken into account, which we outline here. There are many differences between the care funding process in England and the system in Scotland due to different pieces of legislation being in place. However, the key differences are:

• For those who have been assessed as needing personal care by their local authority, residents in Scotland are entitled to a personal care allowance of up to £171 per week (2015/16) without a financial assessment.
• The upper capital limit, the point at which you may be eligible for means-tested care funding, in Scotland is £26,250 (in England this figure is £23,250).
• If you require nursing care, you are entitled to a non means-tested contribution of £78 in Scotland, this figure is £112 in England.

Further differences exist in the assessment for care services and care funding eligibility and we would therefore always suggest speaking to an expert in Scottish community care law to discuss how the rules might apply to you.

bartonlady

Is there any benefit in buying an annuity now for elderly care. My husband is 72 I am 66 years old. We are fit at present but don't have any children. We are concerned that although we have savings and own our own house, we don't want to run out of money in the future and not be able to fund care.

An immediate needs care plan is a type of insurance policy that provides you with a regular income in exchange for a lump sum investment, rather like a standard retirement annuity. The sum you receive is used to meet the cost of paying for residential care if you need to pay for care immediately.

That all sounds well and good, but the downside to purchasing an immediate needs care plan is the fact that insurers base their pricing on how long they expect someone going into care is likely to live for. So while an immediate needs annuity brings peace of mind, there is also the risk of 'wasted' premiums if you die prematurely. Of course, you may feel that the peace of mind that comes from knowing you won't run out of money makes this a price worth paying.

The cost of an annuity like this varies considerably between provider and also depending on your health and age. Discuss your options with a specialist independent financial adviser who holds a CF8 qualification, which is the minimum qualification that an IFA advising on long-term care should have. We also suggest that you look for an IFA with the Society of Later Life Advisers (SOLLA) accreditation.

You can also insure against premature death by buying a guarantee, which returns 50% of the outlay on the early death of the person insured, but the cost can be prohibitive.

StaffordStag

My mother at 98 recently went into a residential home leaving vacant our family home. Whist the building's structure has been well maintained the last time it saw a paint brush was in about 1975! Therefore it is need of serious decorating and to an extent investment in modern heating system etc. In your view is it worth doing the property up and then either selling it or renting it out using the income to offset her Residential fees? If we let it our plan is to manage it on her behalf. I appreciate we would need to take legal advice and conform to all manner of codes of practice etc but letting houses is in the blood for my mother - who is now living comfortably off the proceeds of early years property/letting investment.
In anticipation of your help, thank you.

While we can't comment on your specific case, you are right to take legal advice and many care home residents do let out their own home. It is a good way to increase income and reduce the rate at which savings are used up, but it's important that you consider what would happen if there are periods when the property isn't let.

Regardless of whether your mother is a self-funder or council-funded, you should be aware of something called 'deliberate deprivation of assets' with respect to the cost of investing in your mother's home. This is where a person deliberately disposes of assets to increase eligibility of for local authority funding, although not all disposal of assets is deliberate deprivation, of course.

The local authority might be fine with you investing in your mother's home if you plan to increase the value and sell it immediately. However, if you let it out and there is still a shortfall in rent that the local authority have to meet (whether this is now or in the future once your mother's savings run down to £23,250), they may argue the money should have been used on care costs rather than investing in a home she no longer lives in.

PB

If you have more than the agreed amount of savings, which I believe is £23K+ and find a suitable care home, what happens when you run out of money? Would the local authority move you to a cheaper, maybe less suitable home? This is assuming a spouse is living in the family home.

The first thing to do is to contact your local authority to ask them to reassess your needs (if you haven't been assessed already, everyone is entitled to have one, regardless of how your fees are being paid) and also do a financial assessment. If the local authority then has to step in to pay your fees, you might have to move to a cheaper care home where the local authority is paying for rooms.

However, as well as showing that the new care home will meet your assessed eligible needs, the council also needs to carry out a risk assessment. The purpose of this is to check that such a move won’t affect your wellbeing, whether this is physical, social or mental.

After all these assessments, it might be the case that the local authority determines you should stay in your current care home. They should then increase their payment rate to cover the higher fees.