Who pays for long term care – understanding the rules
The last thing that most people want to prepare for is the cost of funding their long term care in later life. The reality though is that this can be a major expense which can decimate savings and a little forward planning can really benefit those needing care and their wider family.
The basic rules are that most people with more than £23,250 in capital will have to pay for their own care costs. Those with less than this figure may get some financial help from the local authority. If nursing care is needed rather than residential, it may be that the NHS will contribute towards the costs and, in some instances, will cover all the care related costs.
The value of the home falls outside the means test for home-based care and for the first twelve weeks of residential care. After this twelve-week period it is likely the value of the house will be taken into account unless a spouse is still living there. Whilst in many cases the house may need to be sold to cover fees, the local authority does provide a facility to cover the care costs in the short term so the house can be properly marketed and sold as necessary without rushing the process.
There are some other assets which fall outside the means test and we can provide guidance on this for you. Great care needs to be made to ensure that assets are not deliberately moved to avoid the means test and the local authority have powers to recover these if this is the case. If assets are gifted away within 6 months prior to needing care, it is highly likely that the local authority will try to include any unjustified gifts, if over 6 months prior to care, the local authority will need to demonstrate that the gift was made, at least in part, to avoid the means test.
With residential care often costing in the region of £1,000 per week and sometimes more, savings can be depleted quite fast. Not all care homes charge at this level so it may pay to research your local homes to be sure that you are comfortable before moving in but do remember that their care propositions will not all be the same.
We are often asked how best to avoid paying for care, but we tend to take the stance that it may be better to be in control of the quality of one’s own care package rather than have the local authority making the decisions as to where they can afford to place you or your loved one. Local authority funding can pare care to the barest minimum but families do have the ability to top up the local authority funding to improve the quality of care for their loved one should they wish.
Chilvester Financial have published a booklet that provides a little more information on matters surrounding care and care fee funding. If you would like a copy of this or would like to speak to us about care fees planning for yourself or a family member, please contact us.