Probate Partner of
Bridge Sanderson Munro, Solicitors.
One area which has increasingly concerned people in recent years is the cost of long term care either at home or in residential or nursing accommodation.
As we have an ageing population and improved medical techniques are keeping people alive longer. The cost of care, which can be over £700 per week in residential or nursing homes, is becoming a great drain on the resources of elderly people.
Many of my clients are understandably worried that the cost of care will greatly reduce the size of the inheritance that they leave to their children and often consult me about possible ways to mitigate the loss to their estates. The need to sell the family home to fund the cost of care seems to be of particular concern, but this should not be looked at in isolation.
As you may be aware, Local Authority funding for long term care is means tested with the result that anyone who owns a property or has substantial savings will be required to fund the cost of care themselves.
If the Local Authority decides after an assessment of your care needs that you need a place in a home, it must also carry out an assessment of your ability to pay if you are seeking help from them to pay for residential or nursing home care.
The basic rule is that if you have more than £23,500 worth of capital (property, savings or investments) you will have to pay the full cost of the place in a home. For permanent admission to a home (not a temporary stay) the value of your own home will be counted as part of your capital unless it is lived in by your partner or spouse; or by a relative aged 60 or over; or by a relative under 60 and incapacitated; or by a child under 16 who you are liable to maintain. In these circumstances, the Local Authority must ignore the value of your property. The Local Authority also has the discretion to ignore the value of your property if someone else lives there who does not fit the categories outlined above e.g. a relative aged under 60 but not incapacitated who has been looking after you, or a friend who is aged 60 or over.
It is important to note that the value of your property is disregarded in some circumstances, in particular if a spouse or partner continues living there. It is also important to note that the value of any other savings and investments will be taken into account. This includes all savings and investments in the sole name of the person entering care and one half of any savings held jointly with your spouse/partner. If this exceeds £23,500 then the person will be required to fund the full cost of their care themselves.
It should be borne in mind that a person’s income is also taken into account when assessing their ability to pay care fees. A person who has no savings at all will still be required to utilise their income, such as State Retirement Pension, Occupational Pension and Income Support, towards the cost of care.
It should be appreciated that if you fund the cost of care yourself outside the Local Authority funding system then you have complete freedom of choice as to whether you receive care at home or in the residential or nursing home you prefer (subject to availability) provided you are confident that your resources are sufficient to fund your care for the rest of your life because, if your funds run out, you would then be assessed by the Local Authority who may wish to move you to somewhere less expensive. However, many people take the view that they would rather try to safeguard their assets for their family and rely on the Local Authority to fund their long term care.