An older person, standing in a kitchen, holding a mug of drink and smiling at the camera; our Solicitors for the Elderly accredited Solicitor, Naomi Pinder, discusses care fees and future planning.

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Care Fees, Home Ownership, and Funding Care for your Loved One

Posted on 2nd March 2024

When it comes to funding long-term care in England and Wales, the question of whether one needs to sell their home to fund their care is complex and depends on various factors, including the value of the person’s assets and whether a spouse or partner can remain living in the home. Our Solicitors for the Elderly accredited solicitor, Naomi Pinder, discusses the intricacies of this issue, aiming to provide clarity on a topic that can cause considerable anxiety for families.

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Understanding Care Fees

In England and Wales, the cost of long-term care, whether in a nursing home or through home care services, can be significant, often in excess of thousands of pounds a month. The local authorities assess an individual’s finances to determine if they will need to contribute to their care costs. This assessment considers income, savings, and assets, including property, and can take into account factors such as the reason the person is in care.

The Role of the House in Care Fees

The value of one’s home is a crucial factor in a care fees assessment. However, it’s not automatically assumed that the home must be sold to pay for care. The local authority’s assessment will consider whether certain exemptions apply, which may mean the property is disregarded from the financial assessment.

One of the primary exemptions is the ‘property disregard’. This applies in situations where a spouse or partner is still living in the home. Other scenarios can also trigger a property disregard, such as if a relative over 60 or under 18, or someone who is disabled, continues to live in the property.

In these cases, the person can be treated as having no property ownership, and therefore the value of the home is not factored into paying for care fees.

Protection for Spouses

The rules offer significant protection for spouses or partners living in the family home. If one partner requires care, the value of the home is usually not considered in the financial assessment as long as the other partner is still living there. This means that spouses cannot be forced to sell their home to fund the other’s care fees. This safeguard is vital for ensuring that the partner not requiring care can continue to live in their home without the fear of being uprooted.

Alternative Funding Options

For individuals without such exemptions, other options may be available to fund care without immediately selling the property. These can include:

Deferred Payment Agreements (DPAs):

Local authorities may offer a DPA, which allows individuals to ‘defer’ paying the care fees until a later date, often until the home is sold, usually after the individual has passed away.

Renting Out the Property:

Another option could be renting out the property to generate income to help cover care costs, although advice should be sought in this respect as to potential income tax and other implications.

Equity Release Schemes:

Some may consider releasing equity from their home as a way to fund care, though this option requires careful consideration and professional financial and legal advice.

The decision to sell one’s home to fund care fees is not straightforward and depends on individual circumstances, particularly the presence of a spouse or partner living in the home. The protections and alternatives available mean that in many cases, selling the home is not a necessity. However, understanding the rules and options can be difficult, and seeking advice from a financial advisor or legal professional is highly recommended to ensure that decisions are made in the best interest of all parties involved.

For advice, contact our Solicitors for the Elderly accredited Naomi Pinder, with over 35 years’ experience being a solicitor and advising clients on the complexities of care fees, estate planning, and ensuring you are prepared for your future. Call Naomi on 01772 783314 or email wills@mglegal.co.uk.