Planning for Long Term Care

How much it will residential care cost? Who has to pay for it? Will it affect my family home?

In England and Wales, it is common for care fees to cost in the region of £1,300 per week, but this can vary depending on the care home. If a person needs assistance to pay for their care fees, the Local Authority will carry out a financial assessment to calculate whether they are required to fund the person going into care and how much, if anything, they are required to pay towards the care fees.

Generally, most people over the age of eighteen will pay for some or all of their care, either because they have income that can be contributed and/or capital that can be used towards the payment of fees.

There are three exceptions to this:

• People who have residential care provided for them as aftercare under S117 of the Mental Health Act 1983
• People funded by the NHS under the ‘continuing healthcare’ scheme
• People who receive a short stay in care for rehabilitation purposes known as 'intermediate care'

Your Local Authority Social Services is responsible for identifying the needs of the person going into care. Funding is only available where a need has been identified.

As part of the financial assessment, the Local Authority will consider income, which is any money received on a regular basis such as pensions, benefits, and also capital which will include any savings, shares, investments and potentially the value of the person's home.

In terms of income, each person is entitled to retain a ‘personal expenses allowance’ which is currently £23.65 per week.

In terms of capital, the UK government sets the upper and lower ‘capital limits’ i.e. the threshold above which a person must pay for or contribute towards their care fees. Currently, if someone has capital above £23,250 (the upper capital limit) they need to pay for their care fees. 

If their capital is between the lower limit of £14,250 and the upper limit, the Local Authority will calculate how much they must pay from their income plus a means-tested contribution from their capital. Those with assets below the lower limit only need to pay from their income what the Local Authority calculate as being affordable.

The Local Authority must ignore the value of the family home for the first 12 weeks of the stay in a care home. After 12 weeks, the value of the home is ignored if it is occupied by certain people, which includes a spouse, civil partner or former partner, a relative aged over 60, the person in care’s child under 18 or incapacitated.

The Local Authority has the discretion to ignore the value of the property dependant on the circumstances of those living in the property. 

It is also possible to agree to a ‘Deferred Payment Plan’ with the Local Authority. The care fees are paid by the Local Authority and repaid to the Local Authority when the property is sold (possibly after the death of the owner). This option is only open to those with capital below the upper limit (not including the
property). 

Interest and administration fees may apply.

After twelve weeks, it will not be included if you are living at your home:

• A partner
• A close relative over the age of 60
• A child under the age of 18
• An ex-partner living there who is also a single parent

The Local Authority can choose to exclude the property if the person's carer is living at the property.

It is also possible to enter into a 'Deferred Payment Agreement'. This generally means the fees are calculated, records will be kept, but payment is put off until a later agreed date, such as the death of the person in care.

For a consultation with a specialist Wills, Probate, Tax or Trusts Lawyer, please call Holdens on 01524 32484 or contact us online.