Long term care - paying for it

[Deleted User]

Dad is 80 at the moment.
He lives alone. Health is OK considering his age. Can walk a few 100 yds etc but is partially sighed.

Part-owns his flat (his 40% probably worth £70-£80k). He gets disability allowance which he never spends.

That's the problem he never spends any money and it just keeps mounting up. In terms of savings, hes probably got £30K.

It seems to make him happy to have money there because when he was younger he didn't have any. His flat could do with some new things to be honest and some money spent on it.

I keep trying to tell him there's no benefit to saving any more. His answer its for my inheritance.

I keep trying to tell him to spend a bit on himself and the flat at least. I try and tell him that, god forbid, he ever had to go into a home he'd lose it all.

That would break his heart. I dread to think how he'd react to this - it would break him in half to see it all taken away and would finish him off I think.

Whats the limit these days? £24K is you stay in your own home?

£24K if you have residential care (but they include your house). Probably got no chance of that one becaise of the house value (although its part-owned which could be a problem).

Not looking for any dodgy or illegal way out of this but planning is allowed surely?

I've heard of long term care insurance. Is this any good?

jamesd

First thing to remember is that something like three quarters of the time or more there is no long term care need at all. What he's doing has good odds of success even with no more planning.

For people who do need residential care, life in that care tends to be for two to three years. That would probably cost around half to three quarters of what he has, delivering the benefit of him not being in the place that the council finds as the low bidder on their contracts, but instead having choice. Because the average life expectancy at this time is relatively short, immediate needs annuity plans can be good value, paying out at high rates compared to the purchase cost.

Given his assets I don't think that it's worth him doing more planning because I think that he may need to spend some of his money on additional care at home. If he had much more I'd suggest giving it away before the need but he just doesn't have enough in the way of assets to do that and cover his unexpected non-care needs.

One option to consider to ensure an inheritance is life assurance. If you or he have surplus income you could consider purchasing this, since you both have an insurable interest in his life.

greenglide

That would probably cost around half to three quarters of what he has, delivering the benefit of him not being in the place that the council finds as the low bidder on their contracts, but instead having choice.

They always have a choice although they may have to push the local authority to admit it. See http://www.ageuk.org.uk/Documents/EN-GB/Factsheets/FS60_Choice_of_accommodation_care_homes_fcs.pdf?dtrk=true :-

If you have a preference for a particular care home the local authority should arrange accommodation in that home subject to the following conditions being met:

The home chosen is suitable to meet the individual’s assessed needs

It doesn’t cost more than the local authority would usually expect to pay to arrange accommodation for someone with those assessed needs

it is available

the provider is willing to enter into a contract on the local authority’s usual terms.

For residents of England and Wales, your choice extends to any home within the two countries that meets the above conditions. If the local authority refuses to arrange a place in your preferred accommodation it must have a clear, justifiable reason for doing so and should set it out in writing.

Both my Mother in Law and my mother are currently care home residents, one is part funded by the local authority (but a different one to where she is now) and the other is self funded.

Both pay the local authorities agreed rate although the self funding was originally quoted at a higher rate but they saw sense when we pointed out that we knew the LA rate!

The local authority recommended that we choose a suitable care home and they would negotiate a rate. That is what happened. The home concerned is part of a national chain of care homes, care quality is excellent, much better than I expected. The building is four years old, clean and tidy.

Rate paid is under £500 per week although the self funding quote was originally just over £500 per week.

We do live in a relatively low cost area of the country but everyone in England and Wales has the right to choose a suitable home anywhere in England and Wales.

I suggest that posters study the Age UK (http://www.ageuk.org.uk/publications/home-and-care-publications-/ ) and similar places before making more comments about "council finds as the low bidder on their contracts"

greenglide

The part owned flat could be an issue should he require residential care in future. The value of the property is only disregarded if a dependant or close relative is living there. If he lives on his own (and is therefore more likely to need residential care) the flat will count. The local authority are able to pay anyway and place a charge on the property until it is sold - that is what we have done with my MIL.

[Deleted User]

jamesd wrote: »

First thing to remember is that something like three quarters of the time or more there is no long term care need at all. What he's doing has good odds of success even with no more planning.

For people who do need residential care, life in that care tends to be for two to three years. That would probably cost around half to three quarters of what he has, delivering the benefit of him not being in the place that the council finds as the low bidder on their contracts, but instead having choice. Because the average life expectancy at this time is relatively short, immediate needs annuity plans can be good value, paying out at high rates compared to the purchase cost.

Given his assets I don't think that it's worth him doing more planning because I think that he may need to spend some of his money on additional care at home. If he had much more I'd suggest giving it away before the need but he just doesn't have enough in the way of assets to do that and cover his unexpected non-care needs.

One option to consider to ensure an inheritance is life assurance. If you or he have surplus income you could consider purchasing this, since you both have an insurable interest in his life.

Yes I have since read that most people dont need this sort of care home.

[Deleted User]

greenglide wrote: »

The part owned flat could be an issue should he require residential care in future. The value of the property is only disregarded if a dependant or close relative is living there. If he lives on his own (and is therefore more likely to need residential care) the flat will count. The local authority are able to pay anyway and place a charge on the property until it is sold - that is what we have done with my MIL.

Yes my point being its not so easy to sell.

Currently I think its £24K saving limit for non-residential care (and house is not included). I know in wales this is a hard limit.

For residential care, house is included (so little of anyone being below £24K).

I heard rumour though that in 2016 it was increadsing to £118K (inc house). Or is this england only?

Since he own only 40% (and flat cant be worth more than £130-£140K) then his share is about £55K worth. Coupled with £30K savings and he may be well below.

greenglide

I heard rumour though that in 2016 it was increadsing to £118K (inc house). Or is this england only?

The Care Act is now passed so I would expect the new rates to apply in England and Wales.

This also brings in a lifetime cap of care fees however I would expect this to be "care fees" not including "bed and board" costs.

xylophone

http://www.independentage.org/guides/the-care-act/

might be worth a browse.

Nual

The Care Act only applies in England. Wales has the Social Services and Wellbeing ( Wales) Act 2014 coming into being in April 2016, which doesn't make any changes to the current financial assessment for residential care.

greenglide

Anyone interested in the changes coming in from 2016 should read the attached Briefing Note from the parliamentary research:- http://www.parliament.uk/briefing-papers/SN07106.pdf

This can be found at http://www.parliament.uk/briefing-papers/SN07106/care-homes-and-domiciliary-social-care-funding-planned-changes-from-april-2016-extension-to-meanstested-support-cap-on-social-care-and-first-party-topups

jamesd

greenglide wrote: »

Both pay the local authorities agreed rate although the self funding was originally quoted at a higher rate but they saw sense when we pointed out that we knew the LA rate!

I think that you did well.

greenglide wrote: »

I suggest that posters study the Age UK (http://www.ageuk.org.uk/publications/home-and-care-publications-/ ) and similar places before making more comments about "council finds as the low bidder on their contracts"

Even after having read documents there and the new care cost cap the low bidder description seems entirely sensible and appropriate for a person who is considering whether to accumulate funds to provide for themselves or not. This is in part because of the new rules for care costs cap which is officially described in this way for the hotel costs:

"an individual will still be expected to continue to pay their “hotel costs” if they are residing in a care home, although this too will be capped and they “will have to pay only a set amount for their daily living costs (£230 per week) and any additional amount they wish to spend on superior accommodation”" (page 8 bottom)

Someone who wants to live in a better quality of place for non-care services may be able to achieve good results by choosing a lower cost area of the country but otherwise they are going to have to pay more to get any higher standards than the base council level.