paying for care home 7 July 2014 at 1:06PM in Over 50s MoneySaving 27 replies 4.4K views

schofield8883

my husbands grandad at 92 has decided he wants to go into a care home. Social services has been involved and have explained that he has to sell his house to pay for the care home. What i would like to know and what im struggling to find information about is, can he sign the house over to my husband, who would have got it when he died, and instead of paying rent as it has no morgage, we morgage the house so we can pay for the care home and to do up the house? alternativly cant we rent the house out? I asked the social worker when we were discussing it and she just said she wasnt sure but she didnt think you could do that as its down as his assets, but she was new. but my thinking is if the care home is paid for then surely they dont care? any info would be great as finding info is driving me crazy. Tried citizens advice and even they werent sure just said contact a solicitor.

elsien

Does your granddad know how much the care home he is looking at would cost?
It depends on his circumstances and whether he would have to pay the full or partial costs, the home he chooses etc, but my grandmother's (nor very good) home was £550 a week. Is it still realistic for your family to be able to cover this from rent if his house isn't sold? He could live a good few years yet. I think you might find that you would have to buy the house from him at the market rate for it not to count as deprivation of assets.
Ask social services about the financial assessment, and how much he would be expected to pay, then take it from there. Age uk is a good source of information and has some fact sheets.
http://www.ageuk.org.uk/home-and-care/care-homes/deprivation-of-assets-in-the-means-test-for-care-home-provision/

schofield8883

elsien wrote: »

Does your granddad know how much the care home he is looking at would cost?
It depends on his circumstances and whether he would have to pay the full or partial costs, the home he chooses etc, but my grandmother's (nor very good) home was £550 a week. Is it still realistic for your family to be able to cover this from rent if his house isn't sold? He could live a good few years yet. I think you might find that you would have to buy the house from him at the market rate for it not to count as deprivation of assets.
Ask social services about the financial assessment, and how much he would be expected to pay, then take it from there. Age uk is a good source of information and has some fact sheets.
http://www.ageuk.org.uk/home-and-care/care-homes/deprivation-of-assets-in-the-means-test-for-care-home-provision/

the care home he has picked is 413 a week. social services have said he has to pay for him care home in full until the money from the house has been spent but let them know at the 23000 limit and they will start paying for it partially untill he has 13000 left then they will pay in full. my thoughts was the house is worth 200000. if we moved in and morgaged it for 100000. the difference between his pentions and the care home fees is 7500 a year so if we were to put 60000 of the 100000 into a bank account to pay for his care for the next 8 years. if he dies we spend the rest if he is alive (hopefully he will be) after the 8 years then we will have to remorgage the house? There is no way we would be offered a morgage to cover buying the house off him.

macca1974

I'm no expert, but I think that you'll be lucky to be able to do either of the options that you are looking at. If your husbands Grandad hasn't got enough money to privately fund care (which when my gran was in a home cost just under £3k per month), then you need to rely on the local authority and play by their rules. If you google savings limits for care homes, there is a good link to the NHS Choices Website which explains it all, you will be able to see what you can and can't do, and one of the things is that he can't give his assets away in order to avoid the local authority from taking them.

If you did rent out the property (and he went to a private home), then it would have to be a really nice house to cover the costs of care and of course who would pay the bills if he didn't have any tenants, as the local authority wouldn't and it good get very messy.

Unfortunately, the care needs to be paid for and if your husbands Grandad (or anybody else) hasn't got the money to pay for it privately, then the local authority will use up all of his assets up to the last £23,250.

Sorry not to be of much help.

Mojisola

No-one can make grandad sell the house if the care home costs can be covered by other means.

Presumably he has a pension, maybe Pension Credit and Attendance Allowance - add those up and see how much more he needs to pay for the home plus some spending money.

Does anyone have Power of Attorney for him?

He can't give away his assets but someone with POA could, say, rent the house out if that would make up the difference in the care home bills. Of course, if he's still compos mentis, he could organise the rental himself.

If the family want to preserve his home for some reason, they could pay for his care home. The payments could take the form of a loan which would be repaid on his death so that people get back what they have paid out. This would all need to be done formally with everything signed and sealed.

Does grandad have a will?

Mojisola

schofield8883 wrote: »

the house is worth 200000.

if we moved in and morgaged it for 100000.

In other words, you are taking £100k of grandad's money for your own benefit - not a chance.

margaretclare

I believe it is possible to rent the house out and to pay for the care home fees from the rental gained. I'm sure it has been mentioned on Martin's site. As long as the care home fees are paid I doubt if they will worry about where the money came from, but you'd need to have Power of Attorney to be able to do this on Grandad's behalf.

Savvy_Sue

I'm just wondering why you need to mortgage his house? Move in, pay Granddad a market rent from which Granddad pays care home fees, job done.

Do just check that he has made a will, and that in that will he doesn't leave the house to anyone else. Not that he has to tell you what's in his will ...

I'd also say that being a landlord isn't a trivial task, so renting the home out to someone else isn't to be lightly undertaken.

pollypenny

Just about to post the same as Sue.

You can move in, pay rent from which grandfather can pay for the care home.

He will still have his pensions plus Attendance Allowance. That sound like the best bet, as you will all benefit from any increase in its value.

Savvy_Sue

Just to clarify a bit what I said about the will: obviously if you start renting a home which you expect to inherit, but then find it's been left in the will to someone else, you are then likely to be house-hunting in a hurry or having to raise a mortgage in a hurry if they're willing to sell it to you.

The alternative is to get Granddad to transfer at least partial ownership as you move in, BUT as already established that is DD of Assets.

However, pretty much no-one will care as long as the care home fees are paid and you do not appear to be fleecing Granddad.

The question goes back to, does anyone have PofA for Granddad, and if not is he capable of making these decisions? If you have PofA, then you have to be able to justify anything you do like this as in HIS best interests (not yours!!!) so getting proper advice would probably be worthwhile.

Bear in mind that at 92 he probably won't need the care home for long, especially as most people don't spend more than 3 years in a care home before 'checking out'.

pmlindyloo

Savvy_Sue wrote: »

Just to clarify a bit what I said about the will: obviously if you start renting a home which you expect to inherit, but then find it's been left in the will to someone else, you are then likely to be house-hunting in a hurry or having to raise a mortgage in a hurry if they're willing to sell it to you.

The alternative is to get Granddad to transfer at least partial ownership as you move in, BUT as already established that is DD of Assets.

However, pretty much no-one will care as long as the care home fees are paid and you do not appear to be fleecing Granddad.

The question goes back to, does anyone have PofA for Granddad, and if not is he capable of making these decisions? If you have PofA, then you have to be able to justify anything you do like this as in HIS best interests (not yours!!!) so getting proper advice would probably be worthwhile.

Bear in mind that at 92 he probably won't need the care home for long, especially as most people don't spend more than 3 years in a care home before 'checking out'.

Although this is statistically true I don't think the OP should rely on this - I know someone who is 101 years young and has been in a care home for 10 or more years!