Care home fees?

bryanb

House prices are continuing to fall. Many local authorities (and families) rely on the sale of peoples homes to cover the costs of care in later life. How will the present level of fees be met by the falling equity from future house sales?

dunstonh

How will the present level of fees be met by the falling equity from future house sales?

Its a drop in the ocean compared to other issues local authority care has. Also remember that house prices have gone up by more than they will fall and I doubt any local authority has factored in sale of houses in their business plan for care costs.

bryanb

dunstonh wrote: »

Its a drop in the ocean compared to other issues local authority care has. Also remember that house prices have gone up by more than they will fall and I doubt any local authority has factored in sale of houses in their business plan for care costs.

Of course they don't "factor in" such sales, they simply do not fund anyone who owns a property that can be sold to fund care. This means the don't have to find hundreds of millions of pounds annually. House prices may have gone up as you say but care fees have also gone up and are unlikely to fall. In this area £600-£1100 per WEEK is normal.

margaretclare

No properties appear to be moving around here. So assuming you had a house that could be sold, would it be necessary to drop the price to the level of 'peanuts', practically giving it away, just to make sure it was sold?

Just in the interests of discussion, you understand.

bryanb

margaretclare wrote: »

No properties appear to be moving around here. So assuming you had a house that could be sold, would it be necessary to drop the price to the level of 'peanuts', practically giving it away, just to make sure it was sold?

Just in the interests of discussion, you understand.

As far as I'm aware it is possible to refuse to sell, the Local Auth. simply puts a charge on the property,sends invoices, and waits. Not sure whether they chase any shortfall, but I guess they could chase the (eventually) deceased's estate.

EdInvestor

Yes, there's no requirement to pay fees immediately, they can just be charged against the value of the house and paid later.

BTW around 60% of care home residents are fully funded by the council and of the other 40%, many may well be quite well off and easily able to afford a care annuity to top up pension income to pay fees without needing to sell the house.

Of course the house is not taken into account if the spouse or dependant/carer/child over 60 is living in it. So the problem mainly affects widow/widowers with comparatively low pensions and no savings.

bryanb

EdInvestor wrote: »

Yes, there's no requirement to pay fees immediately, they can just be charged against the value of the house and paid later.

But if this happened on a large scale the LA would have to fund temporarily. The care home operators don't wait for the money. Therefore LA's may have to raise council taxes to cover the shortfall caused by house prices crashing.

EdInvestor

bryanb wrote: »

But if this happened on a large scale the LA would have to fund temporarily. The care home operators don't wait for the money. Therefore LA's may have to raise council taxes to cover the shortfall caused by house prices crashing.

Unlikely because, as mentioned above, only a small number of people in care homes would need to sell a house to pay for care.

bryanb

EdInvestor wrote: »

Unlikely because, as mentioned above, only a small number of people in care homes would need to sell a house to pay for care.

If you really believe this I find it hard to credit that you have much experience in this area. The care homes I've talked to in this area are mostly populated by LA funded clients.

monkeyspanner

No pensioner is fully funded by the council as pensions, other income and benefits are taken into account. So say a care home resident received a state pension and higher level attendance allowance they would be paying about £130 a week towards their care home fees once the weekly allowance (pocket money) of about £20 is deducted from their assessed income.

Thus all care home residents are at least partially self-funding.

In addition councils generally pay substantially lower care home fees to fully self-funding residents in the same care home receiving the same level of care. This is due to the council's buying power (or should that be bullying power?) i.e. the bulk of care home residents are council assisted so the majority of care home income is controlled by councils. Because of this council funded residents are being subsidised by fully self-funding residents. In my MIL's case she is paying about 32% more than residents assessed at the same care needs level by the council.

bryanb

monkeyspanner wrote: »

No pensioner is fully funded by the council as pensions, other income and benefits are taken into account. .

Agreed regarding income. However DLA and attendance allowance is not taken into account in my mother's case. She has been reviewed by Pension service and LA, both these benefits were fully declared.