Care Home Fees - Who Pays?

mapleoak

Apologies if this isn't the right forum for the question. Basically, my 75 year old father in law is likely to have to move into a residential home as he can no longer care for himself. This is based upon his mental well being as opposed to his physical state. He owns a flat for which he has a £40000 interest only mortgage and is probably worth around £115000 and in addition he has about £10000 in savings. Will all of the proceeds from the sale of the flat and his savings have to be used to fund care home fees after which time it would be picked up by the state, or is it more complicated than that? Is he allowed to give any money to his 2 daughters/grandchildren first or is that against the law?

Any advice gratefully received or details of where I might find the "official" line.

Thanks

Techno

It very much depends on whether Health (continuing health care) or the Local Authority fund the care - if he is in a residential home then it is likelyto be the LAs responsibility. Usually you are allowed a bit of breathing space to make sure the move is permanent but after that the home has to be paid for out of savings and investments until your father-in-law's come down to a certain level (not sure what that is) then the Local Authority will step in to pay the bill. You should look into all the benefits he may be due such as attendance allowance and claim everything you can. He should also be assessed by a social worker
Br careful about him giving money away - I think it can be claimed back if the LA perceive this to have been done to avoid paying the care home fees

EdInvestor

How much is his pension income?

Residential home care (shop around) is going to cost around 13-15k a year at minimum.

How much of this can he pay himself?

He should also be due "attendance allowance" - a Govt benefit worth 40-60 pounds a week depending on how much care he needs.Add that on.

How much top up does he need?

The best way to pay the extra is usually to use the capital to buy an "immediate needs annuity" which guarantees the cost of the care for life - the income is paid direct to the home and is tax free.Often, after buying one of these, there will still be a decent lump sum left over from sale of the home for a legacy.

In this case, because Dad is quite young, it might not be the case, unless he has a big pension and thus only needs a small top-up.

In that case, it may come down to you making a judgement on how long he will live. The council will take over the topup when his assets are down to 20k.

Immediate needs annuity

mapleoak

Thanks very much. It doesn't seem as bad as I originally thought which was that the state would take every penny he had and only then would he receive anything. I think it was worrying him that he would leave his daughters with nothing. I know they aren't concerned and just want him to be somewhere that he is happy, looked after and comfortable, but if he is able to pass something over when the time comes over it will be a great relief.

elliebean_2

If a person has over £21k in assets or capital they are expected to pay for their care. If they have between £21k and the lower level of £12,750 they would pay a proportion towards their fees. Once their assets drop below £12,750 they would be assessed on their income only. If they gives money or assets away within 2 years of going into care the LA can treat it as deliberate self-deprivation and ignore it.

EdInvestor

If they have between £21k and the lower level of £12,750 they would pay a proportion towards their fees.

Does anyone agree with me that this is excessively penny pinching and mean? :mad:

IIRC they are only allowed to keep 19 quid a week from their pension for their expenses anyway, if the council is paying.

Speaking as a council tax payer, I don't mind if my council increases my council tax by the amount required to allow all the elderly people they fund in the borough to keep 21k worth of assets in the bank free and clear.

The interest would double their income overnight and enable them to leave at least a small legacy (just about adequate for 2 house deposits) to their kids. To anyone who has been forced to give up their home to pay for care, this could mean a great deal.

Since only 4% of the total population over 65 need long term care and many of those will be self funding, I don't expect the extra the council will need to amount to anything noticeable to individuals.

Nor do I think most people would support the state reducing unwell elderly people to a humiliating level of poverty reminiscent of the workhouse, rather than the welfare state we are all supposed to enjoy.

Techno

Sorry, Ed but it isn't just nursing/residential fees for older people the Local Authorities have to pay towards or individuals with savings/higher incomes have to contribute towards. The trend now (thank goodness) is to enable everyone,to remain independant for as long as they wish - even if this means putting in 24hour support into their own homes. So this includes not only older people but those with pysical and learning disabilities too. If the individual has limited savings/income this can cost the LA a huge amount - in fact for most Councils social care is the second highest expenditure after education.
What we pay in council tax, even though it doesn't feel it, is just a minor contribution towards the total cost. I agree it's unfair if one individual gets everything paid for because they have spent everything on 'wild women and song'!!!! and others who have saved a bit towards their retirement are penalised but with our ever increasing elderly population and decreasing younger population to support them, we would all be paying significantly more if those who were able were not expected to contribute something towards their own care.
There are numerous benefits out there and any Local Authority worth its salt should have benefits advisors working with older people in this situation in order to claim every penny they are entitled to from central government

EdInvestor

Techno wrote:

What we pay in council tax, even though it doesn't feel it, is just a minor contribution towards the total cost.....but with our ever increasing elderly population and decreasing younger population to support them, we would all be paying significantly more if those who were able were not expected to contribute something towards their own care.

Hello Techno

It rather sounds as though you think only young people pay council tax.:huh:

Let me tell you, nothing could be further from the truth.

I can assure you I do think people should conttribute towards their own care.Indeed I am a great advocate of immediate needs annuities, which are an excellent and good value way of making this contribution on a guaranteed and tax free basis, while keeping control over the standard of care received, and usually passing on a legacy as well.

My post focussed on meanness and penny pinching behaviour by councils towards those whose assets have already been strip....err taken to pay for their care.

It is not IMHO necesssary to reduce the comparatively less well-off elderly , who formerly were able to stand on their own two feet, to a state of humiliating dependency when they need care.

margaretclare

EdInvestor wrote:

It rather sounds as though you think only young people pay council tax.

Let me tell you, nothing could be further from the truth.

I agree. We're 71 and our council tax (band C) costs us £99 a month. People of all ages are paying council tax, and most of us don't object to paying it for the local services that we all enjoy.

I can assure you I do think people should contribute towards their own care.Indeed I am a great advocate of immediate needs annuities, which are an excellent and good value way of making this contribution on a guaranteed and tax free basis, while keeping control over the standard of care received, and usually passing on a legacy as well.

My post focussed on meanness and penny pinching behaviour by councils towards those whose assets have already been strip....err taken to pay for their care.

It is not IMHO necesssary to reduce the comparatively less well-off elderly , who formerly were able to stand on their own two feet, to a state of humiliating dependency when they need care.

I agree with all of this. At what stage should one consider the 'immediate needs annuity', and how is this paid for? It does sound like a pretty good idea.

Margaret

EdInvestor

Hi Margaret

Here are some details about immediate needs annuities:

http://www.sharingpensions.co.uk/annuity_immediate_needs.htm

As you know the minority of people who need full time care are usually pretty elderly when they need it.Many people will have pension income, which with the help of attendance allowance, will pay the cost of much of the care without need for council funding or selling the family home.

But a top up from an immediate needs annuity, which is guaranteed for life, and tax free if paid to the care home, is not really that expensive if a person is very elderly as you can see, certainly much lower thant the value of the average house.

As you know the council will pick up any additional cost if the person is married and the spouse is living in the home.So where the annuity comes into play is after the first death. It enables a person to self-fund the care on a guaranteed capped basis, while also usually leaving a decent portion of the family home as a legacy for the children.

Everyone then has peace of mind. Plus the person often gets better quality care in a more convenient home of his or her own choice , with much better control, as if things turn bad, the person can afford to move.
In many cases the council doesn't really need to get involved at all.

Techno

mmm - but my point is that the revenue received from council tax is 'but a drop in the ocean' whoever is paying it - most of a council's funding comes as a settlement from central government (or the devolved government as is the case here in Wales) which is funded by taxation on youger people hence my comment re ever increasing elderly and decreasing younger people - councils have to be 'penny pinching' or they genuinely couldn't afford to provide all of the care that is required. I suppose my point agrees with you in that if the individual made best use of everything available to them (including benefits and immediate needs annuities) then as you rightly say, they wouldn't need the council at all - but many are not aware of this and no-one is telling them! (except you of course) maybe this is an idea for a new thread?