Paying care home fees - anyone use the CHIP scheme?

marlarcroydon

Hi all - hope someone can help. My mum has dementia and will soon need to move to a care home sadly. I'm just looking at if there's any way to fund her care without being forced to sell the family home. Does anyone know anything about the "Care and Home Inheritance Plan" / "CHIP" scheme?

Their website - 'mycaremyhome' - explains it like this: "It is an ethical product that enables you to fund the shortfall between your income and your care home fees, allowing you to maintain full legal ownership of your property. Shaw Lifetime Care will lease your property and take responsibility for the ongoing management of the property. This includes letting, insuring and maintain the property to a high standard. This means that you will not need to sell your home, and that your chosen recipient can still inherit the property."

They say it is designed to fund the shortfall for four years, after which "the difference in your care home fees will be covered by a discretionary grant provided by the Shaw Foundation... an exempt charity who champion innovation in the elderly care sector". Other details include: "Even if Shaw Lifetime Care cannot source suitable tenants, you will continue to receive your agreed payments to fund your care at no additional cost or effort" and: "After the leasehold period is complete, the property is returned to you or to your chosen beneficiaries."

Which all sounds great, but I've not been able to find any serious reviews or testimonials about anyone having used the scheme, or independent advice on how realistic it is. Given the huge cost of care home fees, and the relatively small amount of rent likely to be earned from a £300k house, I can't really see how it adds up for them. Maybe they only want to deal with richer families and bigger houses, not sure.

But It's obviously a huge decision, and at the moment it would be a bit of a leap of faith to sign up for it without understanding any risks / disadvantages / possible legal traps... Does anyone have any experience or extra knowledge of how it works? Thanks so much.

KxMx

I can't comment on your question, but as per your other thread you have POA for Mum so are legally bound to act in her best interests. 
I can't see how anything other than selling the house and using it to fund a nice residential home is in her best interests here.

Although you also mentioned that you have POA for both parents - whose name is the house in and does Dad live there with Mum, as that may well change the care funding situation. 

marlarcroydon

Hi KxMx, thanks for the reply. It's just mum now - obviously I would never do anything not in her interests, and wouldn't cut any corners on finding her the best place we can afford. I'm just trying to explore if this is a realistic option, as it claims. It just feels a bit too good/simple to be true, so am wondering if anyone has experience of it. 

tooldle

The catch seems to be that only the shortfall is funded. How does that compare to market rent for the property?
It seems to be a loan.

elsien

I’d also query what level they are basing the care home fees on? They can vary by several hundred pounds a week; would they be expecting you to choose a cheaper level of care so there is less for them to top up?

bunnygo

this rang all sorts of alarm bells (I'm a landlord) and the explanation on your other thread on the Alzheimers forum makes it clear why you should not touch this in any way, shape or form. I can see a big battle to get the place back from the 99 year lease they will take.

there is no way you could make enough from rent to cover care home fees  on a property of that value. Being a landlord has high risks - tenants can move in and pay no rent and you'll have a battle to get them out. If in Wales or Scotland, don't even think about it.

sorry. Sell up, split the money between various financial institutions to get best returns (still around half inflation) and then you know where you are. It will be much easier to sell while you still have POA, excuse the brutal truth.

I'm not impressed with these organisations playing on the 'safeguard the inheritance' thing. Care has to be paid for.

marlarcroydon

Hi bunnygo, thanks for the reply, much appreciated. Yes, my initial enthusiasm is wearing off! Feels like it'd only work on a London-based property with a high rental value. 

bunnygo

I'd be surprised if it worked even there...and it looks to be a route to a whole world of hassle and possible huge costs.

you may want to lurk on landlordzone for a while if you are still considering renting the place out. For what it is worth, when my current (trouble-free) tenants leave I'm selling up. It is only just worth keeping the place on as it is (not London!)