Care Fee Planning
Many people pay at least part of their care home fees but this does not always mean you have to sell your home and other assets.
If you plan ahead, you can make sure you still have something of value left to leave in your will. There are also ways to avoid selling your home, in case your condition improves and you want to live there again.
If you have over £22,250 (2007/08) in capital (savings, investments and property including the value of your home) your local council will assess you as being able to meet the full cost of your care home.
If you own your home, it may be counted as capital 12 weeks after you move into a care home on a permanent basis. However, your home will not be counted as capital if any of the following people still live there:
- your husband, wife, civil partner
- a close relative who is 60 or over, or incapacitated
- a close relative under the age of 16 who you're legally liable to support
- your ex-husband, ex-wife, ex-civil partner or ex-partner if they are a lone parent
Your local council may choose not to count your home as capital if your carer lives there but it is not obliged to do so.
If you go into a care home temporarily, you will not have a financial assessment with your local council and your home will not be counted as capital. If you go into a care home on a temporary basis and your stay becomes a permanent one, your home will count as capital after you have been a permanent resident for 12 weeks.
Local councils can make deferred payment agreements with people who are assessed as having to pay the full cost of their care home fees because their homes are counted as capital. The aim is to allow home owners to avoid selling their homes to pay for the cost of their care.
Under a deferred payment agreement, you pay only the contribution you would have to make if your home was not counted as capital, while the local council keeps a record of the remaining amount that you owe. At the end of your life or at an earlier date of your choice, the council collects the money it is owed either from the proceeds of the sale of the house or from whoever inherits the property.
All deferred payment agreements are set up at the discretion of the local council. Local councils may choose not to enter into deferred payments agreements at all, or only in some cases.
Setting up a family trust is one way of transferring the ownership of your home or other assets to someone else while you are still alive.
It is against the law to transfer ownership of an asset to another person specifically to avoid paying your care home fees. The law states that if you have transferred an asset to another person within the six months before you get a place in a care home, your local council can make you pay your care home fees.
One alternative to selling your home may be to let it out to tenants and use the rent to pay your care home fees.
If you have to pay the full cost of your care home fees, you may decide to sell your home or other assets.
Gregory Abrams Davidson LLP can be of assistance if you want to set up a trust, let or sell your house.
Key contacts: Victor Welsh, Rob Wilkinson.