If your assets are under this limit, bearing in mind that a property is not included if a spouse or relative over the age of 60 lives there, you may qualify for Local Authority funding.
To work out who should pay for your care, take a look at our flowchart.
*April 2019/2020 for England and Northern Ireland. In Wales, the limit is £50,000
The Care Act 2014 had paved the way for the introduction of a £72,000 cap on care costs, to take effect from April 2016. This was then postponed to April 2020. During a statement on social care made in the House of Commons at the beginning of December 2017, it was confirmed that the implementation of this cap would not be happening in 2020 after all.
Instead, the Government announced that it would publish a Green Paper on care and support for older people by summer 2018. Once published, it would be subject to a full public consultation. A Green Paper contains no commitment to action. It is more a tool for stimulating discussion but it is often the first step towards changing the law. As the time of writing, however, the Green Paper had not materialised.
It is highly unlikely that any changes to our current system will be retrospective and will probably still leave the individual having to contribute their income towards their care costs and at least a proportion of their savings. What proportion that will be, in monetary or percentage terms, is too difficult to second guess at this stage. However, given our ageing population and the financial pressures already bearing down on the social care system, we do not anticipate the changes will be significant enough to prevent the need to take advice now and make provision for oneself.
We say watch this space and look for the devil in the detail!
Self-funders can still cap their own care costs by purchasing an immediate or deferred care fees annuity if affordable and appropriate.
You will first need to undergo a care needs assessment and you should request this from the Adult Care Services within your Local Authority. If you meet their eligibility criteria then a financial assessment will be done and this will calculate how much they will contribute. Most of your income will be taken into account and each Authority has a maximum amount that they will pay.
Not all Care Homes will accept Local Authority funded placements as the amount paid is typically much lower than their private fees. A top-up could therefore be requested by some Homes.
Yes, that is correct if you are assessed by the NHS as having a “primary health need” which is likely to be a complex medical condition that requires substantial ongoing healthcare. In these cases, regardless of the assets you have, the NHS will either pay for your care in full (this is known as ‘NHS Continuing Healthcare’) or they will at least pay a fixed weekly amount towards it.
The Care Home that you live in must be registered as a ‘Care Home with Nursing’ for you to be eligible for any amount of financial support from the NHS. You can check what type of care a particular Home is registered to provide by looking on their regulator’s website.
You may be eligible for NHS funding even if you are receiving care in your own home, provided you meet the criteria that they set.
Once your capital reaches £23,250* then, provided you meet your Local Authority’s eligibility criteria, they will have an obligation to fund your care. They will, however, have a set amount that they will offer to pay (inclusive of most of your income) and so if the Care Home fees are higher than this, you could be asked to move to a smaller room or you may have to find someone who is prepared to pay a third-party top-up for you or you could even be asked to leave the Home.
It is not the Local Authority that would insist on any of this – it is the Care Home itself and so you should check with them exactly what their stance would be. Their contract should make this clear.
The best thing to do, if this is a concern for you, it to speak to us about whether or not a care fees annuity might be an affordable option for you as this would prevent the situation ever arising.
*April 2019/2020 for England and Northern Ireland
If you have to pay care fees in full yourself, you could run the risk of depleting practically all of your assets in the event of longevity. With interest rates and low-risk investment returns at their current levels, it is rare for ‘shortfalls’ to be met by investment solutions without dipping into the capital itself.
One way to protect capital is to consider the purchase of a care fees annuity to cover any ‘shortfall’ as not only will this make sure reliance upon Local Authority funding is avoided, if it proves to be an affordable option, it will also ‘ring-fence’ any remaining capital as an inheritance for your family.
Of course you are free to do what you like with your assets but if you then ask the Local Authority to fund your care and they believe that you have given away assets for the sole reason of protecting them from care costs, they can simply refuse to pay for you.
This action is referred to as ‘deliberate deprivation’ of assets and there is no time limit beyond which they would ignore such transfers. The 7-year rule only relates to Inheritance Tax planning and of course you would have to have an estate value in excess of the Inheritance Tax ‘nil-rate band’ for any such transfers to be justified as being for this purpose.
It is important to be aware that if your spouse or a relative over 60 lives in the property (as their main residence) then its value is excluded from the Local Authority means-test.
If a move into care means that your house is left vacant you do not necessarily have to sell it. If you can generate sufficient rental income, allowing for possible agent’s fees, maintenance and income tax, to cover the ‘shortfall’ between care costs and other income then there is no need to sell.
If your other assets are less than the £23,250 capital limit you can apply for a loan from your Local Authority. This only usually works as a solution if the loan is for the full cost of care rather than just the ‘standard contribution’ that a Local Authority might pay.
Arranging a Lasting Power of Attorney is the only way to ensure your loved ones, or someone you trust, can handle your affairs if you can no longer do so.
If you become incapable of making decisions for yourself and you do not have a Lasting or Enduring Power of Attorney in place, an application would need to be made to the Court of Protection by your representative to become your Deputy in order for them to be able to act on your behalf.
If you have decided that you want to find our more about a care fees annuity then the answer is ‘no’.
Eldercare advisers are all SOLLA Accredited, CF8 qualified, independent experts which means that we can answer all your questions and obtain all available care fees annuity quotes for you. The annuity Providers have to offer the same prices to all financial advisers with the only variable being the adviser’s charge which you agree at outset. We are, in effect, doing the shopping around for you. In addition, we are currently the only Advisory Firm in UK able to obtain quotes from four Insurance Companies.