Protecting a house against long-term care money grab

Errata

EdInvestor wrote: »

You must mean those distant days when men were the breadwinners and women didn't work, but rather stayed at home as unpaid carers of children and elderly relatives.Times have indeed changed: it's a rare family that can manage on one income these days.


BTW I see no reason why people on this forum should not engage in policy debate on the issue of old age care and how it should be financed.Policy in this area is not set in stone - indeed it's currently under review by the Government.Forums like these can be very useful in helping to collate up to date public opinion on the subject so that an acceptable consensus can be formed which takes into account a wide variety of vested interests than currently is the case.

Not so distant, merely 20 years ago in my family. I fully agree that forum discussions on matters like this are both healthy and useful.

treliac

Rather than using the care annuity, they would pay the 12k a year in cash (effectively lending you the money)and take a "charge" against the property.This charge is placed on the deeds at the Land Registry and means the house can't be sold until the council loan is repaid. DH could stay there until he died (or also went into care) at which point the home would be sold to pay off the "loan" for the costs of the care. This route is likely to gobble up the property value more quickly , though there is a 'no negative equity' guarantee and thus anyone who lives a long time will end up wholly council funded and with no house.A person who dies soon after going into the home may have racked up only a small "loan" and thus most of the value of the property may still be available to the partner/family.

The value of the house is not taken into consideration if it continues to be occupied by spouse, dependant or someone who had given up their own home to care for the resident. The resident will only be assessed to pay towards their care from their own capital or savings (50% of anything in joint names). From April the minimum amount, beneath which they won't be expected to contribute will be £13,500 and the upper amount, above which they will pay full charge will be £22,250.

Thanks Ed, you've given some really helpful advice for people to consider prior to moving into residential or nursing care. This information is not provided by social services departments, perhaps it should be.

It's worth getting proper legal and/or professional financial advice for anyone contemplating long term care.

Errata

treliac wrote: »

The value of the house is not taken into consideration if it continues to be occupied by spouse, dependant or someone who had given up their own home to care for the resident. The resident will only be assessed to pay towards their care from their own capital or savings (50% of anything in joint names). From April the minimum amount, beneath which they won't be expected to contribute will be £13,500 and the upper amount, above which they will pay full charge will be £22,250.

Thanks Ed, you've given some really helpful advice for people to consider prior to moving into residential or nursing care. This information is not provided by social services departments, perhaps it should be.

It's worth getting proper legal and/or professional financial advice for anyone contemplating long term care.

If this is correct please explain to me why councils are putting a charge on the house half owned by the spouse who has moved into residential care when the other spouse is still living in it. Many thanks.

treliac

Errata

Is this the experience of someone you know? If so I would challenge it.
Take a look at Shropshire County Council's guidance:-

http://www.shropshire.gov.uk/adultcarer.nsf/viewAttachments/CCRL-7AXF69/$file/residential-and-nursing-home-place-leaflet.pdf

My own authority is similar, but also specifies someone who has been in the carer role. These regulations are imposed by the Department of Health, in their Charging for Residential Accommodation Guide (CRAG) -

http://www.dh.gov.uk/en/Publicationsandstatistics/Publications/PublicationsPolicyAndGuidance/DH_073650

A direct quote from this, as follows:-

Where the resident no longer occupies a dwelling as his home, its value should still be disregarded where it is occupied in whole or in part by
• the resident's partner, former partner or civil partner (except where the resident is estranged or divorced from the partner , former partner or civil partner)
• a lone parent who is the claimant’s estranged or divorced partner
• a relative (as defined at 7.004) of the resident or member of his family (as defined at 7.004A) who
- is aged 60 or over, or
- is aged under 16 and is a child whom the resident is liable to maintain, or
- is incapacitated.

treliac

monkeyspanner

dunstonh wrote: »

Yes. Because I have choice. I can insure myself or take steps to protect my assets.



I suggest you compare the budget of the NHS to that of the Gulf wars and you will realise that that despite the money drain that the wars are, they are nothing compared to the budget needed for provision of old age car which could sky rocket due the baby boom generation now getting close.

So now we really get to the heart of it. When is the government going to say we simply can't afford to help you, and stop the costly pretence of pretending the money is available and paying tiers of social workers and their managers to stop people getting the information they need and defend very limited funds?

Time for an honest discussion about what is and is not going to be NHS funded and I mean that in its widest sense.

Errata

Treliac, thanks. So hypothetically a couple could own say £500k of property and despite the first spouse moving to a care home and owning assets worth a quarter of a million quid, they would have their care home fees paid by the Local Authority. Seems somewhat bizarre.

dunstonh

Errata wrote: »

Treliac, thanks. So hypothetically a couple could own say £500k of property and despite the first spouse moving to a care home and owning assets worth a quarter of a million quid, they would have their care home fees paid by the Local Authority. Seems somewhat bizarre.

They could have another £1million in an investment bond and that is disregarded too (providing it wasnt done and documented for that purpose or done too close to needing the cover).

Errata

dunstonh wrote: »

They could have another £1million in an investment bond and that is disregarded too (providing it wasnt done and documented for that purpose or done too close to needing the cover).

It's cheering to know my tax is going to such good causes.

treliac

The partner's occupation of the house is the underpinning principle. The value of the property is not considered (but lets not give the government ideas!)

It's really worth getting good legal advice from a solicitor who specialises in inheritance matters.

For example, if a couple set up a protective trust and change their joint ownership of the house to tenants in common, they will separately own 50% each (whilst making provision for the surviving partner to live in the home for as long as they need). Each can leave their half to person or people other than their partner and, following their death, the surviving partner will only have the value of their own half taken into account for any care charges.

But this is where it is important to ensure that all eventualities are taken account of. I would want assurance that, should the first partner need long term care, the local authority would not, in this scenario, try to place a legal charge on the value of their portion. I haven't come across this and will endeavour to find out. However, the CRAG wording is about occupation of "a dwelling as his home" rather than any specific detail around ownership.

EdInvestor

Errata wrote: »

If this is correct please explain to me why councils are putting a charge on the house half owned by the spouse who has moved into residential care when the other spouse is still living in it. Many thanks.

I too have heard that it's not as clearcut as it's supposed to be.

How can it be justified that a married individual effectively pays nothing but a single widowed or divorced individual is up for the full whack?