If it is agreed that you require residential care, your local council will conduct a means test to establish whether you will need to pay for some, or all, of your residential care home fees. Broadly speaking:
- A person with capital over £23,250 is self-funded.
- A person with capital between £14,250 and £23,250 receives some assistance from their local council.
- A person with less than £14,250 has their care paid for unless this can be met from their income.
- A Local Authority pays at least £100 – £200 less per week, for a care home, compared with a privately paying resident.
- The capital value of a property will not be included in the means assessment if it is occupied by a spouse or civil partner, or relative who is over 60. There are also other disregards.
Steps to consider if a relative is likely to need care
- Request an assessment from the Local Authority. The Local Authority has a duty to assess social and medical needs before they carry out a financial assessment. This may result in your relative receiving a non-means tested contribution to nursing costs.
- Make sure they are in receipt of all relevant benefits – particularly Attendance Allowance (non-taxable and is not means tested).
- Do they qualify for continuing care? If so, care costs are fully covered by the NHS. Very few people receive this but consider asking for a re-assessment if your relative’s condition deteriorates.
- If they are to be self-funded, consider taking taking financial advice – explore the costs of a care plan which can ‘cap’ the capital cost of care. This would involve purchasing an annuity to make up the shortfall between income and cost of care. The income produced can be tax free.
- Check that they have made a Will and Lasting Powers of Attorney.
We can advise you as to the steps you can take to reduce the impact of care home fees on your estate.
We will talk to you about the risks involved in transferring assets to your children and make sure that you understand the consequences of your decisions.