The UK population is ageing, and more people than ever will spend their later years in a care home. It is now more important than ever to seriously think about later life care and how much this could cost you. Care fees will vary depending on your needs but can still be a significant expense. In East Anglia, average care home fees are £35,000 per year and can exceed £42,000 for more specialised care.
Your local council will fund your care if your total assets are below £14,250 and you will be expected to fund your own care if your assets exceed £23,250. If your assets fall between the upper and lower limits, your local authority will pay part of your care fees. When your assets are calculated, your income, savings and home will be included.
According to these rules, everyone who owns their own home will exceed the upper limit and be expected to fund their own care. The council won’t sell your home, but homeowners who don’t have enough savings to pay their care home fees may need to sell their house to fund their care. This is a bitter pill for those who were hoping to pass their home on to their children or chosen beneficiaries, perhaps to help them to get on to the property ladder.
In certain circumstances, your home won’t be included in the assessment of your assets. Your home could be disregarded if you are in the first 12 weeks of permanent residential care or if you have a partner, carer or vulnerable relative who still lives in the property. However unless these or a few other circumstances apply to you, expect your home to be included.
You may therefore think that it is a good idea to dispose of your property before you need residential care, but you should be careful. If the local authority thinks that you have deliberately reduced your assets to avoid paying care fees (known as ‘Deliberate Deprivation’), they could calculate your fees as if you still owned the assets. If you have given the asset to another person, the local authority could try to recover their costs from them.
It is possible and perfectly legitimate to dispose of your assets without breaching guidelines set by the local authority, these include setting up a Trust, giving gifts or buying an Investment Bond. However the local authority can scrutinise any arrangement they believe is an attempt to avoid care home fees and they can revisit and review your case if they feel that the circumstances have changed.
When it comes to care home fees, there is no such thing as ‘off the shelf advice’ and there are no guaranteed ways of avoiding care fees. Everyone’s situation is different and by seeking advice from a qualified legal professional you can best protect your assets for your loved ones and minimise your chances of making a decision that could be considered Deliberate Deprivation of assets.
This article aims to supply general information, but it is not intended to constitute advice. Every effort is made to ensure that the law referred to is correct at the date of publication and to avoid any statement which may mislead. However, no duty of care is assumed to any person and no liability is accepted for any omission or inaccuracy. Always seek our specific advice. Fraser Dawbarns LLP are always happy to provide such advice.
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