selling house to pay for care home

Cosmick1

Under government rules :mad:, my aunt is having to sell her house to pay for her care home costs. Has anyone any advise please on where best to invest her sale money. She will have circa £100k and will have to pay from that her care costs circa 1.5k per month. Where best to save/invest this while it dwindles away? Thanks

missile

In her circumstances, she ought to be looking at saving rather than investment. Check out the listing on Savings and Investments board for the current top paying savings accounts.

If she does not pay tax(?) then ISAs are not for her

Biggles

She should definitely consider an immediate care needs annuity.

This may take a significant proportion of her funds but she will then be in no danger of her money running out and possibly having to move home at the whim of the local authority. In other words, the money will no longer 'dwindle away'.

These guys are experts and get competitive quotes from the three firms that provide this type of annuity http://www.nhfa.co.uk/modules/standard/viewpage.asp?id=1

CBarlow_2

My mother has been in and out of nursing homes for over 12 months now. It is very difficult to find your way through the complicated maze of price structuring which is almost dilibrately in place to put people off claiming what they are entitled to. Firstly the social services do not take into consideration the value of a house for the first 12 weeks that a person is in care. So as long as your Aunt has < 20,000 or whatever the upper/lower band is then social services will pay. I didn't know that and after paying it myself was told that it was not possible to claim anything back for this period retrospectively.

Next your Aunt will be entitled to an attendance allowence. This again cannot be backdated and involves someone (probably you) filling in a complex multipaged document full of irrelevant information.

Next pending the house being sold social services will subsidise the cost. This is in effect an interest free loan. When the house is sold you pay it all back. My tip is to let them find out that the house has been sold as they will stop the subsidy and insist on the amount being paid back from the date they find out. What you also have to consider is that social services negotiate a lower price for the care home than you can. What this meant to me was that the price jumped up by over 40% once I started paying direct rather than through social services. It would therefore have been better to have put off selling the house for as long as social services were willing to carry on with the subsidy. You could ask the care home direct how much they will charge YOU as opose to how much they charge social services. They should be able to give you a straight answer.

I have got very hardened with my dealings with Social Services. I have found very few of them who are pleasant and helpful to deal with. You may also have the misfortune to deal with social workers who's job it is to save the NHS and social services as much money at your expense as possible. My advice is to have as little to do with them as possible. Don't return their phone calls and put everything in writing. Only give them your home phone number where they can leave messages whilst you are at work or they will be phoning you at work everytime your aunt hiccups

I'll get off my pulpit now - Good luck, I hope it goes smoothly.

dorry_2

the same situation happened to my dad. social services told me i had to sell his house and we did before the prices went up. it soon dwindled away to nothing. what ss did not tell me that we did not have to sell it straightaway and that we could sell it at a later date. i wish we had done this and we might have had enough after dad died last year to pay our mortage off in full, as he did not live long enough to incur that much of a charge, on the his house!!:mad: :mad: :mad:

get advice and then get more advice, don't let them rush your aunt into anything!

Errata

Would renting the house be an option? Would the income from this cover the shortfall between the monthly fees and the income from pensions and attendance allowance?

fredsnail

My Grandad's just going into a residential home now - we don't have power of attorney and he doesn't want to sell the house so we're going to have to ask for a charge to be put on the house - but renting it is also something we're considering.

Does anyone have any advice?

Thanks

EdInvestor

CBarlow wrote: »

Next pending the house being sold social services will subsidise the cost. This is in effect an interest free loan. When the house is sold you pay it all back. My tip is to let them find out that the house has been sold as they will stop the subsidy and insist on the amount being paid back from the date they find out.

What you also have to consider is that social services negotiate a lower price for the care home than you can. What this meant to me was that the price jumped up by over 40% once I started paying direct rather than through social services. It would therefore have been better to have put off selling the house for as long as social services were willing to carry on with the subsidy.

Can anyone else comment about this?A differential of 40% between the social services cost and self funding is massive and most certainly indicates a different approach to funding if it is correct/ widely applied.

gallygirl

EdInvestor wrote: »

Can anyone else comment about this?A differential of 40% between the social services cost and self funding is massive and most certainly indicates a different approach to funding if it is correct/ widely applied.

Ed I'm most certainly going to be investigating this. Having asked for help on this board before I had a chance to investigate options mum deteriorated and is now in hospital, awaiting transfer out to a nursing home. From speaking to the nurse who did the assessment it appears 'authorities' (DK if social services or NHS) will pay nursing element (Registered Nursing Care Payment) and the patient is liable for the personal care element. I believe the nursing element is capped at just over £100 (think it was slightly higher but has been restructured :rolleyes:).

I've come across something called Deferral Payment Scheme, which I think is what others are referring to on here. Basically you can defer selling the house (ha, like you could at the mo anyway ) and have a charge put on it for when it is sold. I want to get a copy of the paperwork to see what it says re how they calculate what they will charge you (i.e. based on their paying rate or what mum would be paying direct).

If you let the house the rental income is taken into account when assessing income - this is fair but I need to find out if this is taken as gross or net (after insurance, repairs etc). They do not charge you interest while you are in the home.

According to a few council sites "The money must be repaid either:

• when the property has been sold OR
• when you terminate the agreement OR
• within 56 days of your death"

if not they start to add interest, DK what rate would be used. I would prefer to rent house out then sell when prices have recovered, or just keep as rental income. The final clause is obviously there to stop people hanging on to property & not repaying debt after relative has died. However, 56 days is not long to sort out change of ownership PLUS a remortgage if you wnat to keep it after relative's death.

The way I see it the options are:
1. Sell house & buy an annuity. Expensive & not good time to sell but peace of mind & no more to pay.
2. Sell house & self fund. Not good time to sell & could end up spending all proceeds. Or not......
3. Go down Deferred Payment Scheme route & rent out house. Lower debt being run up so less to pay back in future, but hassle of being a landlord. Potentially lower charge rate.
4. Am inclined to go for Option 3, as it offers teh choice to go down 1 or 2 at a later date.

Hope this helps.

Errata

Not all care homes have one rate for local authority funding and a higher rate for self funders.

bryanb

Errata wrote: »

Not all care homes have one rate for local authority funding and a higher rate for self funders.

In my experience the LA do not tell you how much they pay for care at any individual home, they just say how much the resident must contribute taking into account their income. Attendance allowance, DLA and pension credit were ignored in my mothers case (2005)