Elderly Care support Threshold - Implications of Gifting Savings to Drop Below it...

pmlindyloo

I do believe that the 'improvements that you have identified will be quite acceptable but you do need to keep the receipts to show what the money has been spent on.

Because the financial assessment will involve looking at all income and savings then gifting money in order to claim 'benefits' is seen as deprivation of capital.

I have put that in bold, not in a judgemental way but because this is the test of spending any savings. It is the intention behind it.

Spending on making your mother's life more comfortable is acceptable but gifting it in order to claim extra help is not.

Although it won't help much, a prepaid funeral plan is an acceptable management of savings. as would be small gifts for birthdays etc.

I am sure you can understand that this is done to prevent the state paying out for people who can afford their own care. (another topic for discussion at another time)

Is your mother claiming Attendance Allowance? This is not means tested so her savings would not affect her claim.

I believe that your mother has too much income to claim Pension Credit but you may like to check this out. Pension Credit has very generous savings allowances and if she is awarded it she would be entitled to full Council Tax Benefit.

As I said I suspect that her income is too high but check it out and definitely apply for AA if she isn't already receiving it as care in the home is just the kind of thing that AA should be used for.

atush

I agree that any and all capital improvments to her property and equipment she might need, to make her more comfortable and to stay longer in her home, can be funded from her capital and not regarded as deprivation of assets. So do this work, using her money, to take her down closer to the savings threshold. And keep all receipts and records if necessary.

I do think your heart is in the right place, but once you said transferring money to yourself, so she could claim the max benefits raised a red flag here. So don't be too angry and outraged at some of the answers.

you'd be surprised at the number of money grubbing younger relatives we see here from time to time, not to mention fathers who insure their prized possessions but don't take out life insurance to protect their children.

xylophone

http://www.ageuk.org.uk/Global/Age-Cymru/Factsheets%20and%20information%20guides/FS53%20Capital%20income%20and%20means%20tested%20benefits%20April%202012.pdf

worth a read.

sleepless_saver

She should claim attendance allowance which even at the lower rate will provide an extra £50 approx per week. On the figures you gave she would also become entitled to savings pension credit of around £17 a month, NB after she gets the attendance allowance.

By the time her savings reduce to £23500 she would become entitled to guarantee pension credit so would be getting about £40 a week in pension credit plus about £50 in attendance allowance plus full council tax benefit.

More info on benefits: http://www.turn2us.org.uk/

I'd check with the local authority before she embarks on major spend - not just to see how they would regard it but also to get occupational therapy advice on what type of adaptations are best for your mother.

studio_two

LEJC wrote: »

there are limits on gifting I think it may be in the region of £3000 per year.

Would anyone be able to clarify this a little?

My Grandfather recently went into a care home and I wondered where he stood in regards cash gifts / presents. He has asked me to send £2000 to his nephews, but I'm a little concerned about the implications.

He is paying his own care home fees (and has about £100k of assets).

Thanks in advance,
Stephen

atush

That would, I believe be deprivation of assets as he is in a home now, and funding his own care. He can give a smaller cash gift for birthdays and christmas without coming under DOA.

the 3000 rule is for inheritance tax, not for Deprivation of assets.

Linton

studio_two wrote: »

Would anyone be able to clarify this a little?

My Grandfather recently went into a care home and I wondered where he stood in regards cash gifts / presents. He has asked me to send £2000 to his nephews, but I'm a little concerned about the implications.

He is paying his own care home fees (and has about £100k of assets).

Thanks in advance,
Stephen

There are two separate issues and either/neither/both may apply...

1) Gifts made within 7 years of death can be included in his estate for determining Inheritance Tax. If the total estate is less than £325K or £650K in some circumstances then there is no inheritance tax so it is not an issue. If the total gifts to all recipients are less than £3K each year or they are paid regularly out of income then they are ignored.

2) If the gifts were made with the expectation that this would bring forward the time when the taxpayer would have to pay for his support then he could be assessed as if the gifts had not been made. If he is supporting himself now with every expectation that this would continue until death then there is no issue.

atush

With only 100K, in a care home fully self funding, I can see this being an issue.

That 100K won't last long, so it would bring forwards the end of self funding by several months. Going forwards, if he gifted smaller amts such as say 100 for each bday christmas then that would be allowed.

sleepless_saver

studio_two wrote: »

Would anyone be able to clarify this a little?

My Grandfather recently went into a care home and I wondered where he stood in regards cash gifts / presents. He has asked me to send £2000 to his nephews, but I'm a little concerned about the implications.

He is paying his own care home fees (and has about £100k of assets).

Thanks in advance,
Stephen

If he is in the habit of making regular gifts of this sort of sum to them there should not be a problem (but check with local council first). If he is not, then they are likely to assume it is deliberate deprivation of assets and he could be assessed as still having the money.

If he wants to make sure they have some of his money, the best way is to leave it to them in his will.