how does financing care homes work

54druids

Please can you help. We are moving to England and our mum feels she needs to move into a care home. Her house is in trust so I believe cannot be used for care home costs and she has a small amount left in her savings account. She has a substantial pension which may cover her home costs but what if it doesn't. Is it a case of she will have it topped up or will it simply be that she goes into a home which she can afford with her pension. She has dementia but still has her wits about her enough to know that she cant manage at home alone any more. At present she lives in Scotland and has the maximum package of care in her own home. She has the option of living in the North of England or the South depending on which child she chooses to live near but none of us are actually sure how the finance works

John_Pierpoint

Can I just clarify this situation a bit?

Your slightly demented mother lives in Scotland, where the laws and government of England do not apply. (but the majority of the tax system does)
Both her children have emigrated to England.
Scotland is a more socialist country than England and reportedly offers more state support than England.
Mother wants to more to England too, presumably in the hope of maintaining regular contact with one of both of her Children?
What is the gender of each of her children?
What are their individual circumstances?
Mother lives in a house, as the beneficiary of a trust.
What is the address of the trust, ie where is it administered and who are the trustees?
How was the trust created and in which jurisdiction?
What sort of trust is it ?
Does the trust pay income tax?
What is the exact wording of mothers right of residence?
Assuming that I understand mother's motivation for wanting to move to England, where she know nobody and her damaged brain will recognise no geography, roughly what are her two geographical choices?
Has mother enjoyed a life of constant geographical change (eg wife of a diplomat)?
What sort of standard of living has mother enjoyed up to now. ie what sort of house, what sort of transport, what sort of newspaper, approximately where in Scotland, present "leisure" activities ?
How "malleable" is mother? Is her personality being altered by the damage to her brain?

I ask these questions, because my mother was in a very similar situation following a stroke, though the geographical distances from her 2 children were 2 hours and 4 hours.
My mother in law had a very similar dilemma, with the distances being 1 hour and 4 hours.

54druids

Erm sorry John. All I really wanted to know is how the care home system works in England. I am English and moving back home and have been looking after my mother in law for 4 years and her 2 sons have lived in England for years. She lives in a flat and not a mansion but was left a healthy pension due to the fact she and her husband worked very hard all of their lives. My father in law unfortunately retired late and died 2 years after retirement but had the foresight years ago to put his home in trust for his two sons. Just need to know that we can ensure she is looked after in the best possible way when we move so we need to know how the finance works and where she can afford to live.

frogeyesimon

Spend some time looking at this:-

http://www.ageuk.org.uk/home-and-care/care-homes/paying-for-permanent-residential-care/

This pretty much covers everything you need to know.

antrobus

54druids wrote: »

... She has a substantial pension which may cover her home costs but what if it doesn't. ...

You sell her former house and use the proceeds to fund the difference. Why not? The money's there.

John_Pierpoint

54druids wrote: »

Erm sorry John. All I really wanted to know is how the care home system works in England. I am English and moving back home and have been looking after my mother in law for 4 years and her 2 sons have lived in England for years. She lives in a flat and not a mansion but was left a healthy pension due to the fact she and her husband worked very hard all of their lives. My father in law unfortunately retired late and died 2 years after retirement but had the foresight years ago to put his home in trust for his two sons. Just need to know that we can ensure she is looked after in the best possible way when we move so we need to know how the finance works and where she can afford to live.

As you (daughter in law) are now changing the story completely, I will duck out of the conversation. You will find that the concept of "care home" is embedded in a network of widely varying standards though the government has tried to introduce a tick box system of standards and inspections, similar to the star system for hotels. In my mother's case (10 Years ago, so add £150) there was a chain of care homes, charging top prices and offering Holiday Inn/Express standards. West of London, where mother lived £600 a week. In Canvey Island - not a million mile from me £400. In "skint" S!!!!horpe (near my sister and admittedly round the back of a scrap yard) £250. "Self-funders" subsidise the local authority residents.

antrobus wrote: »

You sell her former house and use the proceeds to fund the difference. Why not? The money's there.

That decision is entirely up to the terms of the trust and the trustees complying with its instructions.

Leaving the trust aside, does anyone have power of attorney for this situation ?

monkeyspanner

I think the information you are trying to obtain is what financial assistance your relative can expect if any from the council social services.

Assuming the trust does actually protect your relatives position re the property her savings will have to be under £23250 for her to possibly qualify for council support. But the support will depend on other income.

Each council sets standard support levels for the required assessed care needs level. These levels are usually pretty low and it may be difficult to find a decent care home prepared to provide care at that finance level. If there are no care homes in the area (i.e. close either to the residents normal home or in this case close to relatives) that are prepared to supply care at the councils level and have a vacancy then the council should support fees higher than their normal level. If there are vacancies but you would prefer a more expensive home then a 3rd party will be expected to finance the difference by 3rd party top-up payments. If council assisted the resident is not permitted to top-up the fees from her own savings.

All income from state and private pensions will be assessed together with a notional tariff income calculated as £1 per week for each £250 of any savings between £14250 and £23250. The first £23.50 of total income is disregarded from the assessment.

So here is a rough example assessment (figure are an illustration only and do not include some detail regarding other benefits)
Care home fees £500 per week
Council assisted funding maximum for Care level 3 £450 per week (dependant on council and care assessment)
Required 3rd Party top-up or additional council funding £50 per week.

State pension £110.15 per week
Personal pension £150 per week
Tariff income on £16000 savings £7.00 per week
Less Weekly allowance £(23.50) per week
Net Assessed income £243.65 per week
Council assistance £206.35 per week

Council assisted residents cannot continue to receive Attendance allowance after the first 28days of residential care. Certain benefits are exempt from assessment.

Dependant on care needs there may be a nursing allowance paid (basic level £109.79) but don't get too excited as this normally goes straight to the care home as an additional fee and does not reduce the cost for the resident

Self funding residents can continue to receive attendance allowance.

Thing to watch out for:
-If your relatives savings are over £23250 then she will start as a self funder. The care home fees are likely to be higher than a council assisted resident with the same care needs. As the savings are used and fall to the £23250 level and council assistance starts there may be transition problems with the fees. The care home may not accept the councils standard fee levels and may insist that the resident continues to pay fees at the self funding level. This may then trigger the need for a 3rd party top-up for relatives or friends or the difficult decision of accepting a move to a lower priced care home. Remember the council should pick up the top-up if they cannot find a vacancy in the same area which will accept their rates. Be careful as 3rd party top-ups are an open ended agreement to assist with funding.
-It is in the councils interest to underestimate the care needs of residents as this will reduce their require support level. So make sure you are happy with the assessed level.
- Your relative cannot now give away capital to get under the £23250 savings limit as this will be seen as a "deliberate deprivation of assets" by the council. Their reaction will be either to attempt to recover the capital from the recipient if the gift was within 6 months or treat the capital as still part of savings.
- I would suggest you think about having your relative consider taking out a Power of attorney.
- It may be worth considering requesting an assessment for NHS funded continuing healthcare. This is non-means tested funding for someone who has complex primary medical needs. Difficult to get as the NHS would have to fund all care home fees if granted.

pollypenny

54druids wrote: »

My father in law unfortunately retired late and died 2 years after retirement but had the foresight years ago to put his home in trust for his two sons. Just need to know that we can ensure she is looked after in the best possible way when we move so we need to know how the finance works and where she can afford to live.

'His home' is interesting. Was it not her home, too?