Planning for Long Term Care

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How much it will residential care cost? Who has to pay for it? Will it affect my family home?

In England and Wales it is common for care fees to cost in the region of £600 per week but this can vary dependent on the care home. Where a person needs residential or nursing home care, the Local Authority will carry out a financial assessment to calculate whether they are required to fund the person going into care and how much, if anything, they are required to pay towards the care fees.

Who Will Pay for Long Term Care?

In short, most people over the age of eighteen will pay for some or all of their care, either because they have income that can be contributed and/or Capital that can be used towards the payment of fees. There are three exceptions to this:

  • people funded wholly in nursing homes by the health authority known as 'continuing care'
  • people who receive a short stay in care for rehabilitation purposes known as 'intermediate care'
  • people who have residential care provided for them as aftercare under S117 of the Mental Health Act 1983.

Your Local Authority Social Services is responsible for identifying the needs of the person going into care. Funding is only available where a need has been identified.

As part of the financial assessment, the Local Authority will consider income, which is any money received on a regular basis such as pensions, benefits, and also Capital which will include any savings, shares, investments and potentially the value of the person's home.

In terms of income, each person is currently entitled to a personal allowance of £24.40. The Local Authority will have details of what income is fully included and what income is partly disregarded. Details of the criteria are contained in CRAG - Charging for Residential Accommodation guide, available online or from your Local Authority.

Capital Thresholds for Long Term Care

In relation to Capital the UK Government set the Capital thresholds. Currently if you have capital above £23,250, you pay all your care fees. If you have Capital below £14,250 you will be fully funded, subject to your income. If you have a Capital balance falling in between the two thresholds you will have a contribution to pay towards your care. For every £250 you have over the £14,250 you will be deemed to have an extra £1 income.

Certain types of Capital may be disregarded such as money in a personal injury Trust, or the surrender value of a life insurance policy or annuity.

Your Property and Long Term Care

With regard to the family home, the property value will not be included for the first twelve weeks stay in care. After twelve weeks it will not be included if you have living at your home:

  • a partner or
  • a close relative over the age of 60
  • a child under the age of 18
  • an ex partner living there who is also single parent.

The Local Authority can choose to exclude the property if the person's carer is living at the property.

It is also possible to enter into a 'Deferred Payment Agreement'. This generally means the fees are calculated, records will be kept but payment is put off until a later agreed date such as the death of the person in care.

It may also be useful to you to see an Independent Financial Advisor. They can advise on how best to hold or invest Capital, to either maximise income or to invest it so that it may be disregarded as available Capital. It is important to remember that whatever you do will be subject to the Deprivation of Assets rules.

For more details please contact one of our Wills, Probate, Tax and Trusts Solicitors.

22 Mar 2019

Wills, Probate, Tax & Trusts


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