Common Legal Questions: How will my Care be funded?
Posted on 4th February 2020
Medical advances mean that, now-a-days, people are living longer and longer, which is great. However, one downside, is that more and more people now require assistance as they get older, to help with their care or day-to-day activities. Therefore, the financial implications of requiring care are now at the forefront of more people’s minds when planning for their future.
First things first, a big worry that many of our local Wills clients come to us with, is that they will be liable to inheritance tax, which is currently 40% of anything over the inheritance tax threshold (which, depending on your martial status, could be either £325,000.00 or £650,000.00 under current rules). However, our Wills solicitors in Lancaster would explain that, sadly, a greater concern which many are not aware of, is that the Local Authority can take 100% of your assets over the limit, which is currently £23,250.00.
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How will my need for care be assessed?
Your Local Authority, such as Preston City Council or Lancaster City Council for our local clients, all have their own requirements for assessing care needs, so you can talk to them directly if you have any questions for your own care needs, or those of a relative.
How will my care be funded?
The need for care can be broken down into different types of care required, and they all have different funding options, as follows.
1) Care at Home
If you are still able to live in your own property, but you require some assistance, your financial means for contributing to the costs of your care will be calculated as follows:-
Your Local Authority will carry out a means test, to decide how much you should contribute towards the costs of your care. They will usually assess the value of your assets, such as savings, money in the bank, stocks, shares, pensions and any benefits that you are entitled to, regardless of whether or not you are claiming them (although it’s important to note that this does not include Disability Living Allowance or Personal Independence Payments).
In most cases, the value of your property will not be taken into account, any you will just have to pay for your care, or contribute to the costs, in line with the criteria.
The value of your capital vs What you will have to pay
Over £23,250.00 - You will be self-funding (expected to pay your own care costs).
Between £14,250.00 and £23,250.00 - You will partially fund your care, and the local council will fund the rest.
Less than £14,250.00 - Your capital will be ignored, and your local council will fund you care, although your eligible income will be taken into account.
When the means test accounts for your eligible income, you will be left with a Minimum Income Guarantee of £189.00 per week (if you are a single person, above the age of Pension Credit qualification).
How will I receive the care?
Well, if you’re eligible for financial support, you can either arrange your homecare yourself, receiving direct payments from the council, or the local council can arrange the services for you and make payment directly to the service provider, which many people would find easier.
How much does homecare cost if I pay it directly?
Generally, homecare costs vary across the country, although the average, according to Age UK, is around £15.00 per hour.
I want my family member to be my Carer, can they get paid?
In the year of April 2019 to 2020, the Carer’s Allowance is £66.15, usually paid four-weekly. To qualify for this, you would normally need to meet the following criteria:
• You speak 35 hours or more weekly caring for a disabled person – you do not have to live with the person, or be related to them.
• The person that you care for meets certain benefit entitlement levels, including:
i. The middle or higher-rate care component of Disability Living Allowance
ii. Either rate of Personal Independence Payment daily living component
iii. Any rate of Attendance Allowance.
• You must earn no more than £123.00 weekly, after tax and NI deductions.
• You are not a full-time student.
Additionally, unlike some benefits, your savings or previous National Insurance contributions record won’t make any difference to your claim!
If you are in receipt of other certain benefits or a state pension, you may be able to make a claim in other ways, such as by additional Universal Credit (the carer element) or Pension Credit.
My capital is getting below the £23,250.00 limit, what do I do?
You may be eligible for help, if your capital falls below the threshold. Contact your local Council a few months before this happens, and they will be able to tell you whether you can be re-assessed for help.
2) Health Care
If you require a nursing element to your care, the NHS is usually responsible for payment of this. This could be anything from a part-time or full-time nurse, to disability aids and equipment. The local authority and NHS will work together to assess the level of care that you need, and usually payment will be made directly to your nursing or care home.
If your loved one or you are sectioned under Section 3 of the Mental Health Act 1983, so you are a danger to yourself or others, and your discharge under section 117, so your requirement for continued care or sponsorship of your care of your mental condition in the community, will mean that all social services including residential and nursing care will be free.
3) Accommodation and/or Personal Support
If your health care needs are “incidental or ancillary” to your accommodation needs, the Local Authority will test your eligibility for financial help based on the means test, and they are responsible for the residential aspect of your care if your capital assets are worth less than £14,250.00, as outlined above.
Also, regardless of your capital value, you will only keep £23.50 of your weekly income, to cover your personal expenses, and the remainder of any income will be paid towards care costs. If your capital assets are more than £14,250.00, the way that your contribution is calculated is different – you can ask your Local Authority about this for more information.
Any joint assets will be calculated based on your half of the total value, so if your assets are held jointly, in some cases, the joint holder can end up contributing to your care fees. The best thing to do, in these circumstances, can quite often be to separate your joint assets.
Does my home have to be included in the means test?
Well, in some cases, your property may not be included in the means test. For example, for the first 12 weeks of your care, providing that it’s permanent care, the local council should not include the value of your property, to give you time to decide what to do about your property and paying the care home fees, for example whether you may wish to enter into a deferred payment agreement (whereby the council places a charge over your property, so when it’s sold, they are reimbursed) with the council.
If your care is not permanent, the council should extend the 12-week period to 53 weeks, before including your property value in any calculations, although you would need to prove to the council that this is the case.
If your care home needs are going to be permanent, and any of the following apply, your home would be included in the means test:
• Your partner, or former partner, still occupy the property.
• Your current, estranged or divorced spouse still occupy the property, if they are a single parent.
• A relative resides in your property, providing that they are over the age of 60.
• If you are a single parent, with children or other dependants under the age of 16.
• At the local council’s discretion (i.e. if a child of yours has been living with you for years, perhaps as your carer).
Our Wills Solicitors in Lancaster would warn you that the above figures are always subject to change, so it’s important not to start giving away your assets if you think you may require care – this won’t prevent the local council from overturning any gifts made, if they think that you are deliberately depriving yourself of your assets.
For advice on how to deal with care home fees, you can read our team’s blog about care home fees, here, or contact our team at your local office, or via email to wills@mglegal.co.uk.
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