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Drawdown pension care fee assessment
I'm trying to help a relative who has a husband in a nursing care home who has early onset dementia. He has a drawdown pension which the council are claiming counts the same as available capital wrt fees. She's been advised by Which that the council should treat it like an annuity which would greatly reduce her exposure to the fees because it's then an income. Who is right? She is too traumatised by their situation to think straight or do her own research so I would appreciate any guidance I can then relay to her.
Comments
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Maybe this would help? It is a few years old though
Assessing pensions in social care funding – key pointers and calculations - Professional Paraplanner
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He has a drawdown pension which the council are claiming counts the same as available capital wrt fees. She's been advised by Which that the council should treat it like an annuity which would greatly reduce her exposure to the fees because it's then an income. Who is right?
The council should treat as income the higher of the existing drawdown income or the notional annuity income that the fund could provide. If an annuity is later purchased, the actual annuity income should then be used instead.
When working out the notional annuity, the council may base this on standard tables (for example, GAD-style rates) rather than quotes from real-world annuity providers.
It is not capital.
I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.1 -
As per the link above a DC pension pot is NOT counted as Capital
This is the Government guidelines, although the link above is a lot easier to read .
Care and support statutory guidance - GOV.UK
It is not treated as capital.
If the person involved has reached State Pension age, then a notional income from the pension will be counted as income in the calculations. Unless of course they are already drawing an income from it, in which case that would be counted.
If they are below state pension age, then it is not counted at all.
Your relative needs to go back to the local authority and tell them that they have taken advice, and the pension pot is categorically not included as capital.
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Your relative needs to go back to the local authority and tell them that they have taken advice, and the pension pot is categorically not included as capital.
…and the LA will doubtless ask them from whom they took advice. The answer ('random strangers on the internet') isn't going to cut much ice. I'd turn the question round and ask the LA to cite the exact legislation/guidance on which they are seeking to rely to treat a drawdown pension as capital.
Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!3 -
https://www.payingforcare.org/use-your-pension-savings-or-pension-drawdown/
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