Advice on parents money?

Errata

Thanks Ed. My reading of HASSASSA 22.8 guidance notes is that a deferred payments agreement has the effect of placing a legal charge on the property. Which has always been my understanding of the position.

Biggles

Errata wrote: »

Thanks Ed. My reading of HASSASSA 22.8 guidance notes is that a deferred payments agreement has the effect of placing a legal charge on the property. Which has always been my understanding of the position.

But it is clear that that only applies to 'land that is not disregarded', and that the home where the spouse still lives is disregarded and that no charge can be placed on it. Or have I misunderstood your mother's situation?

Sorry - I don't believe that both the Local Authority, the Land Registry and the solicitor got it wrong.

Unfortunately, solicitors often get it wrong, and the Land Registry were probably guided by the LA.

EdInvestor

If the spouse was still alive and living in the home, the home should have been disregarded, it should not have been the subject of a deferred payments agreement.

If the spouse in the marital home died before the spouse in care, the home, if jointly owned and inherited by the spouse in care, would then cease to be disregarded. At this point if owned on a TIC basis, with the dead spouse's share inherited by the children, it might be assessed as having a nil value and thus nothing would change.

If the spouse in care inherited it wholly but did not wish to sell it to pay for care then it is possible a deferred payments agreement and a charge were put in place.

But as far as I can see, this could not legally have happened before the death.(They are not allowed to put cautions or charges on property as a means of alerting themselves to the fact that a disregarded property may suddenly have come back into the picture!)

It sounds like a mistake was made. Did it cost you any money?

monkeyspanner

Hi Errata
The treatment of the value of property (i.e. the former home of the care home resident) is covered by CRAG (Charging for residential accommodation guide). A link for the 2007 guide is here:
http://www.dh.gov.uk/en/Publicationsandstatistics/Publications/PublicationsPolicyAndGuidance/DH_073650?IdcService=GET_FILE&dID=138222&Rendition=Web

The relevant section is I think section 7 page 40 para 7.003 which states.
7.003 Where the resident no longer occupies a dwelling as his home, its value should still be disregarded where it is occupied in whole or in part by
• the resident's partner, former partner or civil partner (except where the resident is estranged or divorced from the partner , former partner or civil partner)
• a lone parent who is the claimant’s estranged or divorced partner
• a relative (as defined at 7.004) of the resident or member of his family (as defined at 7.004A) who
- is aged 60 or over, or
- is aged under 16 and is a child whom the resident is liable to maintain, or
- is incapacitated.


If I have read this correctly then the value of the property should have been disregarded if the spouse had been and was resident in the property whether jointly owed or owed solely by the care home resident.

Errata

Sorry - I really can't discuss this further.

sloughflint

Interesting thread this. Hopefully Op won't mind but my mind has wandered a bit and posed a couple of questions to myself that some of you may know the answer to:

1. It is clear that if a spouse is in care, the house is disregarded whilst the other spouse is living in the property and a charge cannot be placed on the property.

But what happens if the second spouse in turn requires care? I guess the house would then be regarded for means testing for both individuals and a charge could be placed from that moment in time onwards for both sets of fees?

2. If an individual's assets consists mainly of property and little savings, do all residential homes have to offer deferred payment or is choice limited to a few that would?

Poppy9

sloughflint wrote: »

2. If an individual's assets consists mainly of property and little savings, do all residential homes have to offer deferred payment or is choice limited to a few that would?

Residential placement usually through LA who assess clients ability to pay. They pay the home in full and receive from the client their contributions including any benefits to which they are entitled. If the client can't or won't pay the LA pick up the bill. If the LA fail to recover or have a high proportion of clients assessed as being unable to pay then the burden is greater on council tax payers.

sloughflint

Poppy9 wrote: »

Residential placement usually through LA who assess clients ability to pay. They pay the home in full and receive from the client their contributions including any benefits to which they are entitled. If the client can't or won't pay the LA pick up the bill. If the LA fail to recover or have a high proportion of clients assessed as being unable to pay then the burden is greater on council tax payers.

Thanks Poppy9 but the purpose of my second question is perhaps unclear.

Properties in the current climate are taking an age to sell so my question was if someone needed to go into residential care but could not afford the fees without selling their property and this took in excess of 12 months, would the person need to pick very carefully since not all residentials homes might accept deferred schemes or is it universally available?

Robert_Sterling_3

That is incorrect and ERRATA is correct.

They can put a charge on a house.

This does not mean that they can sell the house.

Poppy9

sloughflint wrote: »

Thanks Poppy9 but the purpose of my second question is perhaps unclear.

Properties in the current climate are taking an age to sell so my question was if someone needed to go into residential care but could not afford the fees without selling their property and this took in excess of 12 months, would the person need to pick very carefully since not all residentials homes might accept deferred schemes or is it universally available?

The LA has a list of homes they deal with and have arrangements to pay these homes, usually in advance to help their cash flow. I think this covers every home in my LA and there is an agreed rate that the LA will pay for it's clients. It's not always what the home wants so clients can top up. If the client has been assessed to contribute based on the value of their assets i.e. house they LA will wait for it's money till the house is sold, the client will meanwhile receive the care they need.

My LA doesn't force people to sell their homes and simply claim off their estate. Sometimes it takes years to get the money and accounting procedures being what they are we cannot include this income in the accounts for the year the client is placed so the council tax payer picks up the cost. However when the income does come in sometimes years in the future this income is used to decrease the demand on council tax payers.

It has been popular in the past to keep the family home and rent it out using the rent to fund the homeowners care. For some clients the rent is sufficent top up, for others it isn't and the family decide to share the remainder of the extra cost amongst themselves and that way they get to keep the house to inherit.

I have to say if my MIL is in the position of needing care when older this would be our preferred choice. Mainly because we gave MIL a 1/4 of the cost of the house (as did my SIL so we effectively paid 50%) when she bought it from the council 17 years ago. The agreement at the time was that after 3 years had elapsed then 50% of the house would be transferred into OH and SIL names but the in-laws went back on the deal even though we had no intention of charging rent etc. on the 50% we owned.

Pretty peed off that we saved the inlaws over £50k rent payments over the last 17 years plus we gave them £10k cash to enable them to buy their house.