Care home fees tend to become a concern as people age. The cost of care – delivered at home or in care and nursing homes – can be extensive and can quickly diminish an individual’s savings before they are left with limited means to continue funding the costs. Thoughts then turn to whether their home will have to be sold to continue funding the care home. Further concerns also arise as to what will happen if the house sale proceeds then run out and there are no other options to funding the care costs.
Fortunately, there are several funding mechanisms in place which allow access to care homes to those that need it and would otherwise be unable to fund a placement. These mechanisms are means-tested and are calculated in accordance with an individual’s capital.
An individual with over £23,250 will be expected to pay in full for their care home costs. For this assessment, an individual’s home will be considered to form part of their capital if their residence in a care home is due to be permanent. The exemption to this is if the property remains occupied by either their partner (or former partner), a relative over the age of 60, a disabled relative or a child of theirs under the age of 18. The value of the home for the assessment shall be reduced by any outstanding mortgage on the property and then further reduced by 10% to reflect the associated costs with selling the property.
Will I have to sell my property to pay for my care fees?
It is apparent that unless exempt, owning a property will most likely take you over the capital threshold which means you are responsible for funding your care until your capital falls below £23,250. As a result, you may be forced to sell your property to fund your care home fees.
To avoid this, many individuals do consider transferring the property over to a relative to remove the asset from that person’s assessed capital. This, however, would be considered as a deliberate deprivation of assets and for the purpose of assessing the value of the home will remain to be considered to form part of that individual’s capital, with recovery proceedings potentially issued against the recipients of the asset(s) in question.
If it becomes clear that an individual is being placed into a care home permanently, their home will have to be sold to cover care home fees where there are no other means of funding these. The only exceptions to this are in limited cases, where individuals can qualify for Continuing Healthcare Funding, depending on their needs and state of health or, as set out above when the property remains occupied by someone else who has an interest in the equity.
How Nelsons can help
If you are acting as an attorney or deputy and have concerns over the funding of a protected person’s care, help and advice is available. Please contact Stuart or another member of the team in Derby, Leicester or Nottingham who will be able to assist. Please call 0800 024 1976 or contact us via our online form.