Many of us will be faced with the situation where a loved one becomes too ill to live independently and needs to be looked after by others, either in their own home or in a residential care or nursing home.
Quite apart from the difficult decisions about choosing the best care, there are a number of financial issues to deal with. With the right professional advice, you can be sure that the best interests of the person receiving care are safeguarded.
Will we have to pay for care from own funds?
In some cases, the person receiving care is entitled to financial assistance through the local council authority.
If they have capital (that is savings and, for instance, a house) worth more than £23,250 (as at April 2014), local authority funding is not available and the person receiving care will have to fund their care themselves.
If the person receiving care has capital below the threshold, then the local authority should contribute towards the cost of care.
It is important to know what capital should be taken into account when calculating that figure. For instance, certain investment bonds containing a life insurance element should be disregarded.
A person might not be eligible for local authority assistance at first but they could qualify at a later date if their capital falls below the threshold as their funds are depleted.
Will I have to sell the family home to pay for care?
Possibly, but there are situations where the family home should be disregarded for care fee purposes.
Our solicitors can guide you through the complex rules relating to home ownership and the payment of care fees. The family home can be protected if it falls within one of the rules which state that the local authority should disregard the value of the family home when assessing a person's ability to pay for care.
Can I protect my home by giving it to my children?
If someone gives property away and then requires care, the local authority will look very closely at the history of what gifts have taken place. They have the power to overturn any gifts which have been made deliberately to avoid paying care fees. This is known as 'deprivation of assets'.
The local authority can look back any number of years. Many people wrongly believe that any gifts made more than 7 years ago are safe, but this is not the case. The '7-year rule' only applies to gifts for Inheritance Tax purposes.
Giving away the home in which you live is rarely advisable and requires very careful consideration.
By speaking to us about the deprivation of assets rules, you will understand how the local authority are likely to view any transfer of assets in your own particular set of circumstances. This will help to avoid any future difficulties.
Is there anything I can do to ensure that my capital lasts longer once I am paying for care?
It is important to know what options are available to you when faced with the regular expense of care fees. Many people have income which does not fully cover their care and, if you are paying for care privately, this shortfall in income will have to be met.
Unlike most firms of solicitors, we have our own in-house independent financial advisors. Our Financial Services team can give you advice on a range of investment products which are available to make up any shortfall, including the purchase of annuities, equity release and wealth management generally.
My mother's care is funded by the local authority, but I am being asked to provide a 'top-up'. What is this?
Whilst somebody is funding their own care privately, they can elect to live in a care home of their choice according to what they feel they can afford.
If the local authority is assisting with care fees, there is usually a cap on the amount they will contribute. If the care home of choice costs more than the amount the local authority are willing to pay, then a family member may be asked to ‘top up’ the shortfall.
If you are being asked to enter into an agreement to pay a top up fee and are unsure about any aspect, then speak to one of our legal advisors.
I have been told that sometimes the NHS will pay for care? Is this correct?
If someone requires care because they have complex or serious medical needs, the NHS may be legally responsible for paying for that care, rather than the local authority. This is not means-tested in any way. The NHS will carry out an assessment to decide whether a person is entitled to funding. The assessment is purely based on medical need rather than financial circumstances.
If you have been refused NHS funding and would like to appeal the decision, please contact our Dispute Resolution team.
In certain circumstances, applications can be made retrospectively even after the person receiving care has died.
The law relating to care fees is complex and popular misconceptions are rife. Expert advice is available from our Wills, Trusts and Probate team who will guide you through your options and help you to make the right decision based on your own particular circumstances.