Paying for nursing home fees is an emotive subject. Some people feel they do not want their hard earned assets “taken” to pay for their care and want the state to pay. Others feel quite strongly that they want the choice of where they receive care and want to retain their assets to be able to have that choice.
Whichever feeling applies to you you need to make sure you retain the right to your choice. Family members do sometimes try to interfere with a parent’s decision to keep what they see as “their” inheritance intact.
What are the limits?
The basic issue is that if you have assets worth more than £23,250.00 you will be paying for your own care irrespective of your wishes. There is then a sliding scale between £23,250 and £14,250 where a contribution is made. Below £14,250.00 the state will pay.
What are the costs involved in Nursing Home Fees?
Nursing home fees are high, they range from between £650.00 per week to £1,500.00 per week depending on your needs and the area of the country in which you are based. It is precisely for this reason that careful planning is needed either to lessen the burden or ensure that you have adequate funds to support what will be a £30,000 pa bill.
What is taken into account?
In carrying out a financial assessment generally all your assets and income are looked at. This raises what is generally the most contentious point and this is the family home for which the majority of people is their most valuable asset. Frequently as solicitors we find that we are approached by the children of the couple wanting to have the ownership of the family home transferred away from their parents in its entirety generally into their names so that it is not taken into account when assessing the capital of the parents.
Whilst this can work it does need careful planning. It is important to realise that in completing any financial assessment form an individual will be asked not only about their current assets but also enquiries will be made into assets which they may previously have owned and given away.
If it can be shown that you have deliberately deprived yourself of assets to gain a benefit then you will be treated as still owning them and will not be entitled to state funding. Whether this deprivation can be shown will be dependent on the intention at the time of the transfer. If you have already had a medical prognosis indicating that you will require residential/nursing care then the intention will generally be inferred that you were deliberately depriving yourself of your assets to gain a benefit unless another very good reason can be shown.
Giving away the Family Home
In addition if you give your house away to your children then you can also make yourself vulnerable for different reasons. Once the transfer of the property to your children has taken place it is their asset. Anything that then happens in their life such as divorce, death or financial problems will have a knock on effect as the house will be treated as theirs and you could find yourself homeless as a result of same. This could apply even if you have reserved the right to live in the property.
Disregards Regarding Capital on Assessment
It is also important to be aware that where a couple own a house then if one of them needed care then the house is disregarded in any assessment for capital provided the remaining individual is a qualifying relative who also occupies the property as their main or only home. If only one person needed care the house would remain “intact” for the family to inherit. Careful consideration needs to be taken into account and the circumstances looked at before any alternative arrangement is considered. A qualifying relative can be a person’s partner, spouse, civil partner, a member of the family over 60, that person’s child under 18 or a person who is incapacitated.
It is also worth considering in relation to other monies and savings that certain insurance backed bonds will also fall into the category of assets which are disregarded for capital provided that they have been invested in such bonds prior to any medical diagnosis so as to avoid any deliberate deprivation argument arising.
Life Interest or Family Trusts
It is possible to put the family home into a Life Interest Trust during your lifetime taking care with the timing again, but with the home disregard rules this may not be appropriate. A preferable route and one which is not susceptible to query, so far, by the local authorities, is putting the share in the property of the first spouse to die into a Life Interest Trust for the second spouse to continue to benefit from living in it but with the underlying half interest being held in Trust. This Trust effectively “ring-fences” the first spouse’s share so that if the surviving spouse should need residential care it is only the surviving spouse’s share in the house can be taken into account in any assessment.
Sale of the family Home
One further myth needs to be dispelled. People do become extremely concerned about a house needing to be sold to fund care. This is not correct. The local authority can put a charge against the house if for example a person needing care owned a house which was continuing to provide a home for someone who did not qualify for the house to be disregarded. There is no requirement for the property to be sold until the person receiving the care dies and then the charge would be repayable at that stage.
As can be seen it is important to seek advice based on your wishes prior to taking any decisions.