There is widespread resentment felt by many families at seeing sick and seriously ill elderly relatives, who have worked hard and saved carefully all their lives, having to sell the family home to pay for care home fees, which can run at over £1,000 a week, over £50,000 a year.
This article aims to identify the most important facts which families need to be aware.
- Far fewer people have to go into care than feared. Don’t panic into taking expensive and dramatic steps unnecessarily.
- If being discharged from the hospital, make sure you get a proper Care Assessment from the local authority ‐ if the majority of the person’s needs are nursing care needs which are “complex” and “unstable”, then your elderly relative should qualify for free NHS-funded continuing care.
- Be aware that if your elderly relative has assets over £23,250, they will be expected to pay for the full cost of their care. From April 2020 the amount anyone has to pay is capped at £72,000
- Their house can be taken into account (after 12 weeks of moving into care), unless; a spouse or partner lives there, a relative over 60 or under 18 lives there, it is the permanent home for a carer (but not in all cases), a disabled relative lives there.
- Some families are tempted into giving away the family home to the next generation or giving a share of the house to a relative (e.g. a son or daughter) who moves in. But beware ‐ any deliberate deprivation of assets can be challenged by the local authority, who can make the elderly person bankrupt and apply to have the gift set aside. There is no time limit to how far they can look back if they think there has been a deliberate deprivation, although the greater the time gap between the gift and going into care the less likely the local authority will be willing to devote resources to challenge it. Anything within six months is liable to challenge.
- There are also the four ‘classic’ dangers of giving assets away ‐ death, bankruptcy, divorce and family fallout. What happens if, having given the house or a share in it to a younger family member, they then die or get divorced or go bankrupt or fall out with the donor? The home could be sold as a result.
- Remember that keeping the money and paying the nursing home fees themselves keeps the elderly relative in control ‐ they get to choose the care home, not the local authority.
- Don’t forget to claim other state benefits that the elderly person may be entitled to ‐ the main two non-means tested benefits are Attendance Allowance if you are over 65 and need help (£55.65 or £83.10 a week if you need help both day and night) and Registered Nursing Care Contribution of £155.05 per week, paid directly to the home if in a nursing home.
- Consider an annuity ‐ these can be expensive but can guarantee some of the capital passes to the next generation ‐ and save both Inheritance and Income Tax.
- Finally, if both elderly parents are alive, they should consider reviewing their Wills with a solicitor. It is possible to leave the share of the first to die in a trust which can protect the survivor from care fee charges. It involves changing the ownership of the house from joint tenants to tenants-in-common, but that step in itself does not offer protection (this is a common misconception). It is also not as simple as leaving the share to the children, partly because of the usual four dangers of death, divorce, bankruptcy and family fallout, but also because the local authority could bring a claim against the estate for failing to make reasonable financial provision for the survivor.
So those are the 10 keys facts. It is also worth contacting the various charities and agencies that work in this area for free advice ‐ e.g. Direct Gov, Age Concern (soon to be merged with Help the Aged, to be called Age UK), Alzheimers Society, Help the Aged and local Citizens Advice Bureau. Finally, consider whether the elderly relative would benefit from a Lasting Power of Attorney, and remember that if you come to see a solicitor, it is the elderly person who has to become the client, and advice can only be given that is in their best interest.