To Sell House or use council Deferral Scheme

KittyMac

Which is considered in the dementia patients' best interest? Mum is in a care home and we are just entering the 12 week disregard and I have asked for the deferral scheme but on the paperwork, it says we should seek financial advice that we are acting in Mum's best interest financially. If we keep the house it will continue to go up in value and the loan interest rate is very low, my brother lives there and the council are asking him to pay rent but I suspect it will be well below market value rent. If we sell then there is no asset accumulating value but also no property to incur costs? Not sure which would be considered in her best financial interest.

tacpot12

I think the answer might depend on what happens to the money from the sale. (I'm sorry but I'm not that familiar with the process of paying for care.) 

If the money can be invested to produce an income and that income is used to pay for your Mum's care, and the assets that product the income are also likely to grow in value and produce an income that is more than is needed for your mum's care, then selling could be in your mothers best interests. 

It's also not clear what happens to the rent you brother would pay under the  other option - would this be put towards your Mum's care and would this reduce the rate that the loan would increase at? 

I think the reason why they have recommended seeking Financial Advice is that some calculations need to be done to see if one route is significantly different to the other, and to do these calculations you need to know what the proceeds of the sale might be invested in. You could do these calculations yourself, and you could indentify what the sale proceeds might be investest in, but you would need to be a confident investor to do so. 

Savvy_Sue

I agree with tacpot: calculations needed. 

I'd also question WHY your brother would be asked to pay a rent well below market value - while I appreciate that he may not be used to paying anything, and while your mother might not wish him to pay anything, it is almost certainly in her best interests that he pays a fair rent. After all, if you decide to sell, he's going to be looking elsewhere and presumably paying a fair rent!

Alter_ego

What age is the brother- it's relevant

KittyMac

Thank you all. Brother is 58 so the house is not disregarded. The man from the council said he would negotiate the lowest rent possible to enable my brother to stay there but I am aware that is not in mums best financial interest as the rent goes to the council to reduce the loan she will run up to pay for the care. Mum would not want her son to be homeless but by the same token would want the money to pay for the best care she could have.

I will sit down and do some calculations as suggested.

Savvy_Sue

Does brother manage his own affairs / is he on benefits / is there some reason he shouldn't pay a market rent? You don't have to answer those questions, but there may be situations where a balance has to be struck: for example an adult who is unable to live independently and never left home is in a very different position to one who's worked their whole life but never left home! 

If your brother manages his own affairs, I'd be having that conversation with him ... 

AlanP_2

Have you spoken to Age UK and / or Citizens Advice?

They may not know all the answers but will have people who are familiar with the process / rules.

Luckily most of us never have to deal with this and if we do it may be once or twice (really bad luck), whilst they will be dealing with these sort of queries every day.

KittyMac

I will keep trying Age Uk - the queue time is quite long!