17/04/2018
The issue of care home fees has become a thorny subject in recent years. While some accept it as a part and parcel of getting older, others view it as a drain on years of hard earned saving.
But, whatever your view, the reality is that if you posses a significant asset, such as a home, it gives you a distinct advantage when it comes to care. Having a property you can draw funds from allows you the benefit of choosing how comfortable you want to be if residential care ends up being your destiny.
There are lots of people out there who profess that they can help you avoid paying care home fees, but much of that simply isn’t true. It’s a hugely complex area and people can easily fall foul of the law if they don’t take advice from a qualified and regulated professional.
If you’re having difficulty looking after yourself, the local council will assess whether you need social care. This can be anything from having more support at home, right through to moving into a residential care home.
Currently, if you have assets worth more than £23,250 you are liable for all your costs. If you have less than £23,250 in capital, the council will pay for all or part of your care. How much you pay is calculated on a sliding scale via a means test, which takes into account your savings and any income you may be in receipt of. Of course, there could be other factors involved, for example, if you’re already in living in residential social care or a nursing home, whether there’s a dependent relative living with you or if you have dementia and are living at home, but the broad thrust of it is that if you need to be moved in to full time residential care, the council can also include your property in the value of your assets.
Deliberately reducing your assets to avoid paying for care fees is known as ‘deprivation of assets’. Your assets can include money, property or any income you receive. It has been known for people to give their money or home away so that they’re not included in the means test, but if your local authority comes to the conclusion that you’ve done this on purpose, it will view it as a deprivation of assets. As such, even if you no longer have the asset, the council can still include the value of it when calculating your contribution towards the cost of your care fees.
The local authority will base its decision on whether you’ve engaged in a deliberate deprivation of assets by taking into consideration two key factors. Firstly, it will decide if you knew you may need care or support and, secondly, that you’ve intentionally got rid of your assets to avoid paying for care.
And it’s not just about whether you’ve sold your home or transferred the title deeds of your property to someone else that the council will look in to. It will investigate whether you’ve given away large sums of money or you’ve started spending much more than you would do normally. It also looks in to whether you’ve gambled your money away or if you’ve spent your money on buying jewellery or cars which are exempt from the means test.
This may appear harsh; after all who wants to give up the home and possessions they’ve worked so hard to acquire, but it’s all part of paying for care in the 21st Century. This is why timing is critical.
Local authorities will make exceptions if you gave up your home or assets at a time when you genuinely thought you wouldn’t need care or support. In these instances, the council will review your situation and ascertain what reasons you had for doing it. If it deems that, at the time of giving away your assets, you were fit and healthy and didn’t for one minute think you would end up needing care, the council may view that deprivation of assets don’t apply.
While you may believe this is desperately unfair, if you think about it, you’re not really losing your asset, you’re just transferring the value of it in to something else that can help you buy a better life for yourself. Isn’t that exactly why you save in the first place?
Russell & Russell can provide advice and guidance on residential care home fees. The firm offers a free, no obligation consultation so you can decide what’s right for you.
Please note that this article is meant as general guidance and not intended as legal or professional advice. Updates to the law may have changed since this article was published.