Inheritance tax

Savvy_Sue

OK, if her placement is being paid for by CHC that does explain how she can still be in receipt of pensions, I think. 

However, you say that you have Power of Attorney. In that role, everything you do should be for her benefit. I think you're possibly in a slightly tricky situation: yes you can carry on with 'customary gifts' for birthdays and Christmas, but £9k per year (divided by 4?) might be more than a usual amount for that. 

The other caveat is that there is a possibility - and it might be remote, but should be mentioned - that at some point in the future your mother's eligibility for CHC is re-assessed, and she doesn't pass. Or that the rules around this change. 

But going back to your original question: if her total estate at the time of death is less than £325k, then it's not liable to IHT, and you can safely ignore the 7 year gifting rule. 

bobster2

emilyboxer said:

I was advised by the council that mum qualified for CHC funding due to her health and financial position.

She was receiving housing benefit prior to her admission to, and subsequent, transfer from a hospital - where she had received a mental health, and auzheimer diagnosis.
She transfered to a nursing home, and since then has continued receiving her pensions.

I queried her receipt of attendance allowance when I obtained power of attorney, which ceased. I have been waiting for three months +  for any outcome/repayment process.

She lives in England, where CHC is awarded, and I have requested copies of the CHC funding agreement which will hopefully shed more light on the situation.

Some things to bear in mind...

NHS Continuing Health Care (CHC) funding is not means tested - someone's financial position is not a factor. It is based on the severity of someone's health problems and how extensive their health care needs are (i.e. whether they need specialised nursing care). It is very different from social care funding from a local authority.

Full CHC for dementia / mental health (that covers all / most care home placement fees) is very difficult to obtain. Someone's condition needs to be very advanced and their care needs extremely high for a full CHC award from the NHS covering a care home placement fully. If a full CHC award has been made for dementia / mental health (rather than a physical health problem) it is pretty much inconceivable that someone could have sufficiently advanced dementia to be eligible for CHC and yet retain capacity to make financial decisions. Consequently, someone using POA to make large gifts from limited income would seem problematic.

There is a smaller form of CHC award that just covers a bit of nursing care (about £250 per week for less extensive needs) - but this would not cover all the costs of living in a care home. So most care home fees would need to be covered by the local authority as social care (or self-funding).

If someone is in a care home - they cannot receive Attendance Allowance and full CHC. Attendance Allowance will stop following the CHC award.

CHC can be reassessed and withdrawn if someone's care needs change. So someone with POA should be retaining money for this eventuality. Counter-intuitively CHC could even be reduced if someone's condition worsens. Someone with dementia could display challenging behaviour which means they need 24 hour supervision. But if they become weaker and bed bound, they may require less supervision.

Spendless

My concern is that the CHC was meant to be stopped after a certain period and its been overlooked. In which case Id be worried that Mum was receiving money she shouldn't be doing and it may ask to be paid back. 
@elsien - Are you able to shed any light on this? 

bobster2

Spendless said:

My concern is that the CHC was meant to be stopped after a certain period and its been overlooked. In which case Id be worried that Mum was receiving money she shouldn't be doing and it may ask to be paid back. 
@elsien - Are you able to shed any light on this? 

CHC awards are subject to period reviews. They don't just lapse. If someone is awarded interim CHC following a discharge from hospital prior to a full CHC assessment (the "discharge to assess" pathway), this will continue until the full assessment takes place. If the full assessment determines they are not eligible for CHC they won't need to pay back that interim funding.

But alternative funding would be needed following this.

bobster2

From the OP's posts - the impression I get is that her mum is not receiving full CHC to cover her care home placement. Rather she's getting social care funding from the council to cover care home fees - together with the NHS funded nursing care (FNC) component of CHC (about £250 per week from NHS) to cover health needs. @emilyboxer does that sound right?

Spendless

bobster2 said:

Spendless said:

My concern is that the CHC was meant to be stopped after a certain period and its been overlooked. In which case Id be worried that Mum was receiving money she shouldn't be doing and it may ask to be paid back. 
@elsien - Are you able to shed any light on this? 

CHC awards are subject to period reviews. They don't just lapse. If someone is awarded interim CHC following a discharge from hospital prior to a full CHC assessment (the "discharge to assess" pathway), this will continue until the full assessment takes place. If the full assessment determines they are not eligible for CHC they won't need to pay back that interim funding.

But alternative funding would be needed following this.

Poorly worded from me but I meant that for some reason a period review that should/was meant to happen has somehow been overlooked. 

elsien

If that does happen, then the fault is with CHC. The person continues to have the nursing needs they  been assessed for until any reassessment/review happens and decides otherwise.

however, the OP has said that Mum qualifies for CHC funding because of her health and financial position. Finances are not a relevant  factor and don’t come into it when assessing for CHC, which suggests a possibility of some miscommunication somewhere along the line,

Spendless

bobster2 said:

From the OP's posts - the impression I get is that her mum is not receiving full CHC to cover her care home placement. Rather she's getting social care funding from the council to cover care home fees - together with the NHS funded nursing care (FNC) component of CHC (about £250 per week from NHS) to cover health needs. @emilyboxer does that sound right?

In which case why would she be able to keep her pensions both private and state? 

My FIL is in a care home (no CHC) has both private and state pensions and because the council funds his care (he has no assets to srlf fund) he doesnt get to keep these pensions other than some 'pocket money'. I think it's around £30ish per week.

My Nan was in a care home for 8 years (dementia). For 7 of those years she was self funding (sale of property), so she also kept her income (state pension and private  pension from my late grandad)  For what was to be the last year of her life she fell below having £23250 so had to contribute to her care not pay all of it. There was a sliding scale of how much she needed to contribute. 

elsien

it’s not possible though for her to be fully funded by the council and to be in full receipt of CHC funding covering all care needs because these are two separate systems.

If there is any element of local authority social care funding, then her income and private pension would be taken into account and she would most likely need to pay the majority of that towards her care unless her private pension is more than the care home feet.

I would strongly suggest the OP gets clarification as to who is paying what and what still needs to be resolved before donating any gifts to anyone else.

Depending  on how long Mum has been in the care home for, it may be that the local authority haven’t carried out the financial assessment yet. In my area they were about six months behind. The OP does not want to end up with a large bill on their mother’s behalf. 

Keep_pedalling

If this gifting is being done by the attorney then this an abuse of their authority and could see them land in big trouble with the OPG.