Care Home Means Testing

James110252

My father is about to go into a care home. He has savings under the £14K threshold and therefore his costs for care should be fully funded by Solical Services. Both my father & mother have a Pru Investment Bond Life joint life insurance policy which they took out some 20 years ago investing a lump sum of £20K. The investment is now worth around £60K. On reading up about Investment bonds I have found the following "In regard to the treatment of investment bonds in the financial assessment for residential accommodation, their complex nature means that it is difficult to state in general whether they can be disregarded. The Department of Health says that ‘if an investment bond is written as one or more life insurance policies that contain cashing-in rights by way of options for total or partial surrender, then the value of those rights has to be disregarded as a capital asset … In contrast, the surrender value of an investment bond without life assurance is taken into account". Reading this I beleive that this Bond should not be included in any means testing. Am I correct? I also note from the documemtation that the investment can be part or fully cashed in at anytime and in which case could Social Services take this into account when undertaking the means testing?

GeorgeHowell

James110252 wrote: »

My father is about to go into a care home. He has savings under the £14K threshold and therefore his costs for care should be fully funded by Solical Services. Both my father & mother have a Pru Investment Bond Life joint life insurance policy which they took out some 20 years ago investing a lump sum of £20K. The investment is now worth around £60K. On reading up about Investment bonds I have found the following "In regard to the treatment of investment bonds in the financial assessment for residential accommodation, their complex nature means that it is difficult to state in general whether they can be disregarded. The Department of Health says that ‘if an investment bond is written as one or more life insurance policies that contain cashing-in rights by way of options for total or partial surrender, then the value of those rights has to be disregarded as a capital asset … In contrast, the surrender value of an investment bond without life assurance is taken into account". Reading this I beleive that this Bond should not be included in any means testing. Am I correct? I also note from the documemtation that the investment can be part or fully cashed in at anytime and in which case could Social Services take this into account when undertaking the means testing?

It's certainly ambiguously worded. But it looks like because of the life assurance aspect it would not count as an asset for means testing. If I were you/your father I would disclose it it in the means testing, with full details, and then if the local authority does intend to treat it as an asset ask how they square that decision with this wording. Another useful port of call would be the Citizens Advice Bureau.

xylophone

http://www.careaware.co.uk/newsletter1.htm might be of interest.

dunstonh

eading this I beleive that this Bond should not be included in any means testing. Am I correct?

If the pru bond was set up before they knew care was needed and there is no income being taken from it then it should not be included in the means test.

I also note from the documemtation that the investment can be part or fully cashed in at anytime and in which case could Social Services take this into account when undertaking the means testing

If partially or fully surrendered, that amount becomes cash and would then be included in future means tests.