Care costs, paying off mortgage and deprivation of assets

poppy12345

Fatbritabroad wrote: »

. to me it's not deprivation as she has no other way of paying the mortgage back in time other than as you say equity release)

That's not the way means tested benefits work. Paying a mortgage early can be classed as deprivation of capital.

Fatbritabroad

poppy12345 wrote: »

That's not the way means tested benefits work. Paying a mortgage early can be classed as deprivation of capital.

That's what I'm afraid of

Alice_Holt

There isn't a definitive answer.
It will depend on the Decision Maker at her local council (who are responsible for assessing and providing care services in their area).
But, given the financial pressure that LA's are experiencing, I would certainly work on the assumption that the LA will determine deprivation of capital.

She needs to bear in mind that even if her LA accepted settlement of the mortgage was not deprivation of capital, the quantity (and possibly quality) of care provided by her LA is likely to be at a very basic level.
https://www.nhs.uk/conditions/social-care-and-support-guide/help-from-social-services-and-charities/care-and-support-plans/
It's likely that she would want to supplement any LA care, to achieve a reasonable living standard.

Her (and your) focus should be on how to get the best possible care. Having a cash fund of £70k is likely to help her in this.
Some thought should also be given to what her friend will do should she need to sell the house (in the longer term) to access more suitable sheltered accommodation.

Can you explain the financial strategy for paying off the mortgage, only to use equity release later? Might this be seen as her LA as a device to gain access to means tested care provision?

Mojisola

How much is she paying out each month for the mortgage - if she paid off the mortgage, would this cover buying in the care she needs at the moment? If so, she wouldn't need to involve the council at the moment.

FBaby

She also recently received an inheritance and has about 70k left of this in cash

Do you mean that the inheritance was more and she's already spent some of it? What was it spent on? She needs to be careful that idlf she has, some could also potentially be considered as deprivation of assets depending on how it was spent.

Fatbritabroad

Alice_Holt wrote: »

There isn't a definitive answer.
It will depend on the Decision Maker at her local council (who are responsible for assessing and providing care services in their area).
But, given the financial pressure that LA's are experiencing, I would certainly work on the assumption that the LA will determine deprivation of capital.

She needs to bear in mind that even if her LA accepted settlement of the mortgage was not deprivation of capital, the quantity (and possibly quality) of care provided by her LA is likely to be at a very basic level.
https://www.nhs.uk/conditions/social-care-and-support-guide/help-from-social-services-and-charities/care-and-support-plans/
It's likely that she would want to supplement any LA care, to achieve a reasonable living standard.

Her (and your) focus should be on how to get the best possible care. Having a cash fund of £70k is likely to help her in this.
Some thought should also be given to what her friend will do should she need to sell the house (in the longer term) to access more suitable sheltered accommodation.

Can you explain the financial strategy for paying off the mortgage, only to use equity release later? Might this be seen as her LA as a device to gain access to means tested care provision?

I do appreciate that and rest assured my thoughts are purely what's best for her. I have zero interest or need of any kind of inheritance or hoarding money in her house for me to have later

The reason for paying the mortgage off was purely in the context that of keeping her in the house as long as possible and potentially the money to be there for when she needs more severe care. Her friend can and is willing to do alot (more than he should really but without him I'm not sure what we'd do) it's the physical lifting and carrying he struggles with. I just thought the basic cars would do just that the basics and he could pick up the slack and help ease his burden

She's relatively young and although in bad health there is nothing to say she won't be around for another 20 years. It happens. I am not in a position position where I can contribute much for the next few years so my first child is on her way end november so childcare is going to easily eat up my spare money and time, plus to be honest and yes I'll probably sound selfish but it's not in me to provide physical care for her . I had previously offered to help pay for things like meals on wheels and care when I had the spare cash but she's always refused as she didn't want to be looked after by strangers. I have probably let it go on longer than I should to be honest

In terms of what she's spent it on the majority is health related and the remainder replacing very old items that have broken round the house so no issues there

xylophone

Or are you asking because there may be another some of money due in the future which would pay it off and which may affect the answers given?

It used to be the case that this type of mortgage was paid off from the maturing proceeds of an endowment policy - there were other possible arrangements (ISA/Pension lump sum etc).

If there had been, the Decision Maker might well have come to the conclusion that the existing arrangement should stand?

pmlindyloo

It may be worth finding out if the interest only mortgage has an end date. Some do and others allow you to pay back the loan only when the house is sold.

If the interest only mortgage has no end date then it may be sensible not to pay back the loan at this time.

If there is an end date then paying the loan back then becomes more of a necessity and the decision maker may recognize the need to do so and not count it as deprivation of capital.

In view of what you have said about your mum's needs ( lifting and carrying) daily carers provided by social services may not meet your mum's needs. Does she need some specialist equipment ( like a hoist for example?) to make her and her carer's life easier?

If she did not need to use her savings to pay the mortgage loan then she would be able to use the money to buy in any equipment that she needed.

Hope this makes sense .........

xylophone

Is there any LA /HA housing for older people available in her area?

Perhaps your mother could sell the property and she and her friend could rent a property adapted to the needs of elderly/frail residents?

She would then easily be able to afford additional care?

parkrunner

pmlindyloo wrote: »

It may be worth finding out if the interest only mortgage has an end date. Some do and others allow you to pay back the loan only when the house is sold.

If the interest only mortgage has no end date then it may be sensible not to pay back the loan at this time.

If there is an end date then paying the loan back then becomes more of a necessity and the decision maker may recognize the need to do so and not count it as deprivation of capital.

In view of what you have said about your mum's needs ( lifting and carrying) daily carers provided by social services may not meet your mum's needs. Does she need some specialist equipment ( like a hoist for example?) to make her and her carer's life easier?

If she did not need to use her savings to pay the mortgage loan then she would be able to use the money to buy in any equipment that she needed.

Hope this makes sense .........

Would that be likely as it's not the only way to pay off the mortgage ie equity release?