Dad moved to care home is he still a taxpayer?

tiptoes27

Hi
My Dad has dementia and is due to move from hospital to a care home this week. He has £18000 in savings and my sister and I hold power of attorney for him. Social services are going to pay £424.00 a week towards his care home fees of £650.00 and a member of my family is going to pay the top up. Sopcial services have told us they will take his pension and attendance allowence. My mum still lives in the house the own together. We now need to put my dads savings somewhere as they are in an account paying no interest and my question is do we register him as a non- tax payer as he has no income? We are planning to keep his savings in an account in his name. This is all new to us so any advice would be gratefully received.

Valli

AFAIK he will still be a taxpayer but he will have a personal allowance.

See here

It should be possible for you to register the account to recive GROSS interest (ie before tax is taken off) rather than NETT

and (hugs) for your family. It's a cruel illness IMHO because it takes away the person we know and love...

margaretclare

Which age-group is he in, according to the link provided by Valli?

Everyone who has an income - even pensions income - is (potentially at least) a taxpayer. His pension is taxable income. His attendance allowance is not taxable and non-means-testable.

tiptoes27

He is 74. As far as I understand his attendence allowance and pension will be paid straight to social services.

noh

madcatwoman wrote: »

He is 74. As far as I understand his attendence allowance and pension will be paid straight to social services.

His pension is still counted as his income. In his case it is being used as partial payment for his care.

anmarj

madcatwoman wrote: »

He is 74. As far as I understand his attendence allowance and pension will be paid straight to social services.

if social services are paying towards his care and not being treated as self funding then his attendence allowance stops after 4 weeks, but social services should know this

tiptoes27

Social services have had finance form but not done assessment yet. they have told us he will not have to make contribution as his savins are under £23,000. We are now trying to sort out what to do with his savings so he is earning a bit of interest but we have easy access. We have only just register Power of Attorney so are not sure how easy this will be to do? Is there anything particular we need to bear in mind when opening a new accout for him? Thanks

margaretclare

madcatwoman wrote: »

He is 74. As far as I understand his attendance allowance and pension will be paid straight to social services.

Yes, but SS are not HMRC. You were asking about his tax status.

His personal tax allowance goes up to £9640 in the tax year in which he becomes 75. AA is non-taxable.

tiptoes27

Thanks - he will be 75 this tax year so should not have to pay any tax as it pension is way below the allowence. Thanks for all the replies.

sloughflint

madcatwoman wrote: »

Social services are going to pay £424.00 a week towards his care home fees of £650.00 and a member of my family is going to pay the top up. Sopcial services have told us they will take his pension and attendance allowence.

I'm no help to you but I don't understand this. The house will be disregarded as your mother lives there and his savings are below the threshold so why is a member of family contributing to the costs?
Surely the LA should be paying the difference over and above the shortfall from his pension and his AA terminated?
Worth checking out in case I haven't misunderstood the system? As attorney you have a duty to ensure everything is done correctly.

sloughflint

madcatwoman wrote: »

Social services have had finance form but not done assessment yet. they have told us he will not have to make contribution as his savins are under £23,000. We are now trying to sort out what to do with his savings so he is earning a bit of interest but we have easy access. We have only just register Power of Attorney so are not sure how easy this will be to do? Is there anything particular we need to bear in mind when opening a new accout for him? Thanks

I think I see where I've misunderstood. Although his savings are below 23k, they are above 14k.

This link is quite good:
http://www.nhfa.co.uk/SA_FAQ.html

How does this means test work?

If you have capital of below £23,000, you may be entitled to some assistance from the State towards your care costs. First your Social Services department will carry out an assessment of your care needs under Section 47of the NHS Community Care Act 1990. If you are assessed as needing nursing home or residential care, you will be asked to claim any Income Support benefits or Pension credit you may be entitled to and these will be taken into account in a means test to ascertain how much you can afford to pay. Normally you will have to pay all your income towards the fees, less £21.90 per week you must retain for personal expenses. If you have capital of below £14,000, you will receive the maximum help. If you have capital of between £14,000 and £23,000 you will also have to make a capital contribution of £1 for each £250 of capital between these two figures. The above applies to England and Northern Ireland. Scotland £22,500/£13,750, personal expenses allowance £21.90 per week. Wales £22,000/£20,750, personal expenses allowance £22.00 per week.

[STRIKE]I still don't understand why a member of family is expected to pay though.
[/STRIKE] ETA Answer is in the same link.
As for his savings, in your position, I wouldn't be looking for easy access for the whole lot. Again there is a duty to maximise interest as much as possible.