Care home fee rules

donmaico

Hello, my question relates how those rules would affect a couple where one of them has to go into care.AS I understand it the main residence in unaffected but should they have more property then that would form part of the whole capital, 50% of which would be deemed as belonging to the person who needs the care and that would be used to fund it until it drops to below £23,250.The remaining 50% would stay with the spouse.
The question is how would the authorities go about apportioning the 50%? Do they take all existing investments, pensions etc and split them in half? AS an example, my wife's pension will be more generous than mine because she will l receive a local government pension as well as a state one. We own two properties which we let so would they seize those, sell them on the open market and then return 50% of whatever proceeds are left over to the spouse who does not need care?
As we are both working obviously I am preempting things somewhat and it may never come to the point that either of us needs care, but I really would like to know well in advance before making any decisions .It seems to me that it might be sensible decision to sell the properties in different tax years to minimize CGT , when the property market as its most buoyant and, in the process, release the capital so we can live comfortably in retirement .It would also make things easier to if and when one of us has to go into care

I should also point out we have no children involved so that not an issue

NYM

According to Age UK...

At the moment, your capital and savings below £14,250 are disregarded in the means test.

If you have:

• between £14,250 and £23,250 in capital and savings and you are eligible for care, the council will contribute towards your care costs
• capital and savings above £23,250, you will have to fund all of your own social care.

After April 2020:

• the £23,250 upper limit will be raised to £118,000
• the lower limit will be raised to £17,000
  
• Therefore, anyone with assets of between £17,000 and £118,500 who meets the eligibility criteria for care will be entitled to some financial support according to a sliding scale.
  
• To put it another way, anyone with less than £118,000 in savings will in future be entitled to at least some financial support to help pay their care costs if they need to enter a care home.

NYM

This is the factsheet regarding treatment of property in the means test...

Means Test and Property

TELLIT01

There is a difference between being joint owners of a property and owners in common. How that affects the calculations for Care Home contributions I don't know, but it's certainly something to investigate.
As you have a portfolio of financial interests albeit not a massive one it would be sensible to take proper legal advice to give yourselves the maximum possible protection for your assets.

donmaico

TELLIT01 wrote: »

There is a difference between being joint owners of a property and owners in common. How that affects the calculations for Care Home contributions I don't know, but it's certainly something to investigate.
As you have a portfolio of financial interests albeit not a massive one it would be sensible to take proper legal advice to give yourselves the maximum possible protection for your assets.

Do you mean joint tenants or tenants in common? The latter of the two seems a bit complicated and possibly risky too in as much as I could for eg claim 25% ownership of the properties , and my wife 75%,
but if she ends up needing care before me then it would be that 75% that would be deemed to be hers and subject to care fees.Either way the properties would have to be sold
local authorities are ,apparently, pretty hot on asset deprivation these days and if property transference is done within 6 months of a care application, they may seek to reclaim them
http://www.payingforcare.org/deprivation-of-assets

TELLIT01

Sorry donmaico. I do mean tenants... not owners...

FBaby

And what happens if you are married (so in theory at least, all assets are 50/50) but you have properties in different names (not joint)?

donmaico

FBaby wrote: »

And what happens if you are married (so in theory at least, all assets are 50/50) but you have properties in different names (not joint)?

As I understand it the council can only take into consideration the property that is in the name of the person applying for residency care.In my case keeping property separate is not feasible because my wife and I let them and the Inland revenue like things run 50/50,at least so I am told

donmaico

I contacted Age Uk and got the following reply:

"We have no information to indicate that, based on the current system of funding, the local authority would take possession of your two rental properties and sell them, should you or your wife need care.

Therefore it would appear that the individual requiring care, their family and/or legal representatives, may need to explore how this capital could be used to pay for their care."

So it seems that it is down to each individual/couple to ascertain how they would release liquidity from property assets and I assume councils wouldn't wait until they were sold before taking payments.I think I need to conatct my local council to see what their policy is in this regard

Droopydrawers

Local authority's can put your care home payments on hold (they will accumulate) until such times as you can pay. Though if you have the money you would be expected to pay I would think. Care homes are a last resort (honestly - they really are. no matter how 'good' they are) and not everybody goes in to one. If a person goes in to a care home on a temporary basis and they own their own home - the local authority contributes - but take every penny of your income bar about £23 - for personal items - they do not take into account any running costs for the home except water rates and house building insurance - if you are single. I don't know about couples - But we looked after my mum at home until the last 3 months of her life and never had to pay the higher rate as she didn't live long enough. As I said, it was last resort - and I feel guilty as hell because of it

donmaico

Droopydrawers wrote: »

Local authority's can put your care home payments on hold (they will accumulate) until such times as you can pay. Though if you have the money you would be expected to pay I would think. Care homes are a last resort (honestly - they really are. no matter how 'good' they are) and not everybody goes into one. If a person goes into a care home on a temporary basis and they own their own home - the local authority contributes - but take every penny of your income bar about £23 - for personal items - they do not take into account any running costs for the home except water rates and house building insurance - if you are single. I don't know about couples - But we looked after my mum at home until the last 3 months of her life and never had to pay the higher rate as she didn't live long enough. As I said, it was last resort - and I feel guilty as hell because of it

I do have some liquidity but not enough to last very long .I am of course assuming the very worst scenario ie one of us has to go into full-time care due to unforeseen circumstances eg the result of an accident .All things being equal my intention is to turn my properties into liquid assets well before we reach an age when we have to start thinking of care.Of course, that would be a last resort and I am sure we each would do what we can to look after each other.Unfortunately, I am an eternal worrier , always have been. My wife thinks I am bonkers even thinking about it, but that's me.
We had her mother living with us for years until she died, but she was never a burden on us.Very independent sort, always on the go even when she had macular degeneration.As for feeling guilty, when i think of the elderly folk who have been shoved into homes by their families who then had very little to do with them ,then I see grounds for guilt ,except those families did not appear to have any ,so I wouldnt feel too bad about your mum.We all need our own space after all.