Paying for residential care - hypothetical teaser. 1 May 2012 at 2:35PM in Over 50s MoneySaving 1 reply 947 views

monkeyspanner

What would happen in the following case?

Prior to going into residential care a recently retired person had elected to defer their state pension for 2 years in exchange for a lump sum at the end of the two year period. They have minimal other savings.
At the end of the two years the lump sum is taxable (most would fall under the anual exemption limit) and the remainder is paid to the resident. The residents total savings are still under the minimum savings limit of about £23000 so the council continue to pay for the majority of the care minus the now started state pension.

Question? - Would the council have any rights over the lump sum payment as they have not been able to assess the state pension during the two years, or is the lump sum treated as capital and under the savings limit so not assessable except for possible "tariff income"?

Mojisola

You're not allowed to defer the state pension and then claim another benefit, like CA, so I think the council would assess you as if you were receiving the state pension each week. If you didn't have the capital to pay that during the deferred period, they would expect it to be paid when the lump sum arrived.