Nursing care benefit and 'giving away' money

cepheus

My Father was recently taken into hospital with Pneumonia and is very unsteady on his feet, previously suffering a fractured hip. Thankfully he is starting to make some progress, so it seems likely he will need to go into a nursing home after leaving hospital.

The financial situation is difficult since my parents sold their house to raise money for interest to live off which I think is in the region of around £45K. This will be eaten into due to the requirement to be self funding above a certain savings threshold. This would not be a problem if the money could be given away since it seems as that inheritance tax/PETs would not be an issue for giving away this relatively small amount. However the rules state:

If you have capital of over £21,500, you are expected to pay all of the cost of your care ... You should take care not to deliberately give away your money (or your house) to bring your savings below the £21,500 limit. If you require nursing care and pay the fees in full to the nursing home, then the NHS may pay up to £111 per week in respect of the nursing care element of their fees. The NHS issues its own leaflet on this

http://www.neath-porttalbot.gov.uk/olderpeople/residential.cfm

So what is the definition of giving away money? is their a time limit between giving it away and receiving benefit? Even if this was possible would it count as a capital gains for the recipients? does forming a trust count as giving it away and how much would IFAs charge for setting this up?

Thanks in advance for any help and advice. I would be interested how cg81 has got on in a similar situation
http://forums.moneysavingexpert.com/showthread.html?t=514589&highlight=nursing+care

Ted_Hutchinson

Age Concern
Transfer of assets and paying for care in a care home - Factsheet 40

Many of us would like to protect our savings from having to use them to pay care fees. If you give assets away for this, the local authority may treat you as still owning them in a later means test.
Our factsheet explains the rules on ‘deliberate deprivation’ and how transferring your assets can affect you and the person you transfer them to.
It includes information on:
• What is deliberate deprivation?
• Local authority powers to recover transferred assets
• How to challenge decisions about deprivation
• How transferring assets can affect both old and new owners
This information will be useful for anyone who is thinking of giving away or otherwise transferring assets and also anyone who might receive those assets.

soolin

Sorry OP I can't answer your specific question any better than Ted already has, however I can tell you how I am dealing with a similar situation.

I have read the fact sheets carefully and my understanding is that I can use my dad's money to benefit him, ie buy necessities but cannot allow him to gift the money unless it is reasonable and has been done in the past. I don’t have full access to my father’s savings, I do have access to his banking account and have done for a few years as he found it a bit confusing.

Rather than run any risks I am therefore using his money to buy the things he needs, ie sweets and biscuits for the hospital, replacement clothes (his old ones were disposed of as they were mouldy due to living conditions) . Oh and replacement razors as so far dad has had three disappear from his hospital bedside. (I buy cheap ones from Argos to save any problems about cost). Everything I buy I keep receipts for as well so I can prove where the money went.

He also still writes cheques for the grandchildren on their birthday, but I have told him this should stay at exactly the same level as before he became ill. I was also told by social services that he is allowed to reimburse me my petrol expesnes, again with receipts for duties undertaken on his behalf..but I haven’t really done that yet.

I don’t know if I am being over cautious but I think at least this way I can account for any money that goes from his pension.

Norman-B

Thank you to O/P for this thread. Also for the replies so far.

My dad has been in care for the past 13 months and he is self funding. He had a stroke 4 weeks ago and has been in hospital since then. I was informed today, by the doctor, that he is likely to be discharged in the next two weeks but into Nursing care. I have contacted the care home and they are to advise me of what the move from care to nursing will mean.

At the moment he (or I do on his behalf) claims for AA and he receives this. Will he be entitled to an increase in AA when he moves to Nursing care. The fees at the home will increase, I'm sure.

Thanks in advance for any advice.

margaretclare

Hi Norman

There are only 2 weekly rates of AA, one is for help needed during the day, the other is for help needed day and night. The higher rate is £64.50 a week. There's nothing above that.

HTH

Margaret

Norman-B

Margaret,

Thank you for the reply! I think I confused AA with the nursing element of the care home fees. My question really should have been, will the NHS/DWP ? pay towards the increase in fees due to dad now needing nursing care?

At the moment he is paying £23000 PA for his care fees but this is bound to be increased when he returns into Nursing care.


Cepheus, I'm sorry if I intruded on your thred.

cepheus

Thanks all for your replies so far.

My mother will be devastated with this news since she intended to save something for her grandson. After all she has been through in the past few weeks I doubt if it is wise break the news immediately. Similarly for my Father who has worked hard all his life and always saved for a rainy day (although obviously not in the right way). They will go ballistic if they will find out about the nursing care costs and the need to pay them.

It seems as if it is legal to transfer money to other people to avoid large amounts of inheritance tax at short notice but not to avoid the erosion of much smaller and more important savings in the case of nursing care!

The only thing I can think of is to purchase something (expensive) for my Father which can be used by someone else at a later date or sold on.

Is anyone who is technically 'fully' self funding get the £111 per week which the NHS may pay in respect of the nursing care element of their fees? With attendance allowance this may cushion the blow.

Biggles

cepheus wrote: »

Is anyone who is technically 'fully' self funding get the £111 per week which the NHS may pay in respect of the nursing care element of their fees? With attendance allowance this may cushion the blow.

The care home fees will be reduced (following the assessment by the NHS PCT) by the amount of the Registered Nursing Care Contribution.

This will be in one of three bands, Low £40pw, Medium £87pw, High £139pw. I would doubt that your father would be in the high band, more likely low or medium (but then, I'm not a nurse!). This is really just intended to take care of the nursing element of the care home fees.

soolin

Also, as I have found to my cost...a straight care home placement is not subject to any help from the PCT as they say there is no nursing element.

Ted_Hutchinson

http://www.gpss.tripoduk.com/nhscare/ your right to 100% NHS funded Continuing Care under UK law and the Coughlan case

Biggles

soolin wrote: »

Also, as I have found to my cost...a straight care home placement is not subject to any help from the PCT as they say there is no nursing element.

Well, theoretically not to your cost, as a care home place without nursing would normally be cheaper than a care home place with nursing. And the RNCC would not necessarily cover all the extra cost anyway. But, from what you had already said, I was surprised there was no nursing element specified.