Care home fees - is this a scam?

philiphodges

My father is in a care home.  Organised through local authority they initially paid the fees (~£790 per week)
We are about to sign a deferred payment agreement (fees continue at £790)
We are selling the family home.  After that the loan from the local authority is paid and we have to go private.
The care home private fees are £1,300.  We can't continue through the local authority and pay £790
If we need to find cheaper then we'd have to move him.
If this a con that the care home get us in via the local authority at a discount and then double the fees when we have to go private?

FlorayG

I don't think it's a con. It's the LA that gets a discount, not you; the LA gives them lots of business whereas you will probably be a one-off. That's how business works

philiphodges

So if the local authority continued to charge us they could add 10-20% and make a good turn.

logic here suggest we don’t sell the house so we can keep paying through the council.

p00hsticks

philiphodges said:

So if the local authority continued to charge us they could add 10-20% and make a good turn.

logic here suggest we don’t sell the house so we can keep paying through the council.

Is the local authority not charging any interest on the deferred payment ?

If the house is being left empty then by the time you factor in the empty home council tax surcharge, insurance, utility standing charges, maintenance etc you may end up 'cutting off your nose to spite your face', as my mother used to say. 

I very much doubt that any local authority is making a 'good return' on their social care expenditure. 

philiphodges

Add in 4% on loan from local authority and overheads from property then it’s still a better deal than the private care home fees

elsien

Whatever the views on the ethics, it is common practice in care homes for self funders to subsidise other places. Although that is a larger gap than I have seen where I am. 

It’s been flagged up as an issue for a few years and now, but no one seems to be doing very much about it. Age UK commissioned a report a few years ago – it might be worth phoning them to see if they have any advice on any other steps you can take. 

Sometimes there is room for negotiation, to meet somewhere in the middle. Make sure his claiming attendance allowance as a self funder.

As to whether you can decline to sell the house, delaying taking action may raise queries around how his finances are being managed.  And if he was only there on a short term place pending longer-term decisions being made, you may find that the local authority would also look at moving him somewhere cheaper, depending on what the usual local authority rates are in your part of the world. 

Keep_pedalling

In reality this is not subsidising LA funding, care homes that have no trouble in filling their rooms to self funders don’t take LA funded residence, those who can’t do because although they won’t be making anything from those residents but the alternative is to have empty rooms leading to significant losses to the business. 

sheramber

philiphodges said:

So if the local authority continued to charge us they could add 10-20% and make a good turn.

logic here suggest we don’t sell the house so we can keep paying through the council.

The council would pyt a charge on the house and claim the money due , with interest, when the house was eventually sold.

Savvy_Sue

sheramber said:

philiphodges said:

So if the local authority continued to charge us they could add 10-20% and make a good turn.

logic here suggest we don’t sell the house so we can keep paying through the council.

The council would pyt a charge on the house and claim the money due , with interest, when the house was eventually sold.

And the value of the house (if left empty) would probably go down, while the amount owed would go up with the effect of compound interest - could be left in a situation where the house does not cover the fees?

ian16527

Same thing happened to us for Dad. First 6 weeks at £790 from the council, then private funded at £1040 pw. We had to pay the council back straight away. 
Dad will run out of savings next year so have to get a financial assessment from Council in good time. 

RAS

We had to pay the higher fee, but were told that if the money ran out (which was possible), they'd transfer the parent to the LA rate as soon as they had a "vacancy". But they doubt that would be necessary.