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Deprivation of Capital/Care Home Fees

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Please can someone advise of give an opinion on our situation. My mother has been in a residential care home for almost 2 years. As she suffers from Parkinson's it is highly likely that she will shortly need to transfer to nursing care. She has to pay her own care home fees and we have recently sold her house in order to cover this. Like many others in her position, she had wanted to leave something to her children, but we accedpt that our inheritance is likely to be either very small or non-existent. Our first consideration is that Mum should receive high quality care. We are currently in the process of finding another care home for her, closer to where we live and here is our dilemma. The best home which we have seen is expensive and we have sufficient funds to pay for her care there for around 3 years. Given the unpredictability of her life expectancy (she is 86 years old), I am concerned about what would happen if the money ran out. Would she be forced to move to a different and less expensive home? This is something which we would like to avoid because we do not want her to be unsettled.
Secondly, we were confused about the difference between the Inland Revenue rules which allow her to give away £3,000 p a, and the rules on capital deprivation. Over the past couple of years, Mum has given my sister and me £3000 each, which we thought was permissible. I now understand that this could be viewed as being capital deprivation. So - if/when her money runs out, what is the local authority likely to do? Will they look back 3 years into her bank accounts to find out whether she has given money away? If they should do that, will they demand the money back? Are they entitled to investigate mine and my sister's financial situations? In my sister's case, she has no money at all and would be completely unable to pay back the money. I am not as hard up as she is but, obviously would not be happy about paying it back.
All information and opinion gratefully accepted
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  • Oldernotwiser
    Oldernotwiser Posts: 37,425 Forumite
    Like many people, you're confusing the rules about IHT with the rules concerning deprivation of capital.

    If this is considered to be the case, your mother will be treated as if she still had the capital rather than you and your sister being asked to pay it back. However, as this might involve paying directly for some months' care, the result could be the same.
  • pollypenny
    pollypenny Posts: 29,433 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Bellabee, how nice to see a post where someone is clearly not trying to get the rest of us taxpayers to pay for a parent's care and only wants the best for her mother.

    Hope you can find her a good home where she will be happy.
    Member #14 of SKI-ers club

    Words, words, they're all we have to go by!.

    (Pity they are mangled by this autocorrect!)
  • Quiet_Life
    Quiet_Life Posts: 2,498 Forumite
    Part of the Furniture Combo Breaker
    check this link for information

    http://www.ageuk.org.uk/Documents/EN-GB/FS40_deprivation_of_assets_in_the_means_test_for_care_home_provision_fcs.pdf?dtrk=true

    Also, ask the care home what their policy is if a resident can no longer afford the fees
    In giving
    you are throwing a bridge
    across the chasm of your solitude.
    The Wisdom of the Sands. Antoine de Saint-Exupery
  • Hi Bellabee

    My MIL and FIL have just been through a Local Authority financial assessment for help with their nursing home fees.

    I only had to produce one months bank statements for them to look through even though I had years dug out for them. The way the deprevation of assets works is that they would assess your mother as if she still had the money and therefore would be given less financial help.

    Also, my inlaws pension credit has been dramatically reduced, attendance allowance has stopped and so has the carers allowance they received, which is all fair enough but I just thought I'd mention it.

    Another thing to mention is the "third party top up" fees (the difference between the nursing homes fees and the maximum the LA will contribute). In our case this is £20 per week x 2, the person in the home cannot pay this themselves but in our case MIL and FIL can pay each others I think as we are still in the throws of this at the moment.

    When one of them dies I would expect that my hubby and I will have to pay it. This worries me slightly as how can we agree to pay an unknown amount for an unspecified amount of time!

    Please be aware that different Local Authorities may have different rules regarding assessments and I'm just sharing what happened when we went through it.
    Don't wait for your ship to come in, swim out to it.
  • Thank you all for your responses. They are very helpful.
  • Bellabee wrote: »
    Please can someone advise of give an opinion on our situation. My mother has been in a residential care home for almost 2 years. As she suffers from Parkinson's it is highly likely that she will shortly need to transfer to nursing care. She has to pay her own care home fees and we have recently sold her house in order to cover this. Like many others in her position, she had wanted to leave something to her children, but we accedpt that our inheritance is likely to be either very small or non-existent. Our first consideration is that Mum should receive high quality care. We are currently in the process of finding another care home for her, closer to where we live and here is our dilemma. The best home which we have seen is expensive and we have sufficient funds to pay for her care there for around 3 years. Given the unpredictability of her life expectancy (she is 86 years old), I am concerned about what would happen if the money ran out. Would she be forced to move to a different and less expensive home? This is something which we would like to avoid because we do not want her to be unsettled.
    Secondly, we were confused about the difference between the Inland Revenue rules which allow her to give away £3,000 p a, and the rules on capital deprivation. Over the past couple of years, Mum has given my sister and me £3000 each, which we thought was permissible. I now understand that this could be viewed as being capital deprivation. So - if/when her money runs out, what is the local authority likely to do? Will they look back 3 years into her bank accounts to find out whether she has given money away? If they should do that, will they demand the money back? Are they entitled to investigate mine and my sister's financial situations? In my sister's case, she has no money at all and would be completely unable to pay back the money. I am not as hard up as she is but, obviously would not be happy about paying it back.
    All information and opinion gratefully accepted

    I think most of your questions have been answered already but just to add a couple of areas you may wish to consider.

    As a self-funder your mum will probably be paying a higher rate than council assisted care home residents for the same level of care in the same care home. When your mum's money reaches the minimum saving limit of £23500 (slightly different if she is in Wales or Scotland) then the council will need to assist. Each council sets a financial support level for each level of care. This is the maximum fees they will assist up to after your mum's income has been set against the fees. Any shortfall between the maximum fee support level and the actual fees will mean that relatives will possibly be asked for a third party top-up (your mum is not permitted to fund the top-up). This can be a substantial amount partly as self-funders start at a higher fee and care homes are reluctant to drop their fees to a council agreed level when the resident needs council assistance. The alternative can be a move of care home to a home which will accept the councils fee level (usually inferior). There are some safeguards in this circumstance. The council can only ask for a 3rd party top-up if they can find a suitable place in an alternative care home at their agreed rate and they also have to do a risk assessment to try to assess the impact on the resident both medical and social.

    As you are currently looking for a higher service home it may be adviseable to ask prospective homes what their policy is in the event of a transfer from fully self-funding to council assisted. Also you could familiarise yourself with the council assistance limits to assess what top-up might be needed.

    It would also be useful to know what the homes policy would be regarding the nursing supplement (currently £101/week I believe) which is paid by the NHS to homes in some circumstances. Most homes assume they will take this in addition to their weekly fees and few set it against their fees.

    As your mums condition is deteriorating you may also wish the consider getting her assessed for NHS continuing healthcare funding now or some time in the future. If your mum's primary need is medical rather than domestic then the NHS provide non-means tested funding for care/nursing home fees. The NHS understandably makes obtaining this funding extremely difficuly. If you are interested in this a search on moneysaver forums of "CHC" will find more information.

    I hope this helps and good luck with your search.

  • As a self-funder your mum will probably be paying a higher rate than council assisted care home residents for the same level of care in the same care home.

    Thanks, I didn't know this, I wondered why the fees had gone down. I didn't want to say anything to the home incase they realised they had made a mistake ;)
    Don't wait for your ship to come in, swim out to it.
  • Littlemissbossy, can't understand why your parents' attendance allowance has been stopped. Surely they need it? Can understand carers' allowance and pension credit, but surely they fit the criteria for needing help and assistance with the things that AA is supposed to be about?
    [FONT=Times New Roman, serif]Æ[/FONT]r ic wisdom funde, [FONT=Times New Roman, serif]æ[/FONT]r wear[FONT=Times New Roman, serif]ð[/FONT] ic eald.
    Before I found wisdom, I became old.
  • Thanks for the info Littlemissbossy and Monkeyspanner. I'll check with the Authority regarding their view on top-ups. I think it's looking increasingly likely that we'll have to look at a less expensive home, though. I suspect that the top-up amount would be in the region of £200 per week, which neither my sister or I could afford. If the money ran out in 3 or 4 years time, that coincides with our own retirement - so there'll be no spare money available. I don't think it's worth the risk of running out of money and having to move Mum again a few years down the line. It would potentially be just too upsetting for her.
  • Littlemissbossy, can't understand why your parents' attendance allowance has been stopped. Surely they need it? Can understand carers' allowance and pension credit, but surely they fit the criteria for needing help and assistance with the things that AA is supposed to be about?


    I have spoken to the DWP and the LA about this and they have both confirmed that it stops. I assume that it stops because they are getting the financial assistance from the LA rather than the DWP.
    Don't wait for your ship to come in, swim out to it.
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