There is a large amount of confusion and controversy at the moment around the subject of fees for care homes. As fees for residential care continue to rise, more and more people are concerned that they may have to pay these from their capital, leaving little left for children and others to inherit. There are a number of factors that will affect whether your capital will need to be used to pay for your care.
Means Testing
The first step after you have been assessed by a local authority as needing residential or nursing care is for the local authority to means test you. This is compulsory. The first stage will be to look at whether your income is enough for you to pay for your care. In this amount they will always leave a personal expenses allowance of £25.45 per week so that you are not left with no income.
If the fees cannot be met from your income, the next stage will be to look at your capital. Those with capital of less than £14,250 will not be expected to pay care fees from it and costs should be covered by benefits.
If your capital is between £14,250 and £23,250 you will be subjected to a tariff whereby the local authority will work out a rate for you to pay from your capital. The tariff assumes that for every £250 of capital between these amounts you have an additional £1 of income per week. Lastly, if you have capital of over £23,250 you will be expected to pay for care fees yourself.
What counts as capital?
There are a number of things that will be ‘dis-regarded’ as capital. For the first 12 weeks after you move into permanent care your own home will not be counted as capital in case your stay is only temporary. In addition, if a spouse or dependent is still living in your house, it will be disregarded. Personal possessions such as cars, furniture and valuable jewellery will also not be included in your capital.
Many people are often tempted to put their capital into as many of the above ‘dis-regarded’ items as possible so that they reduce their capital. However, this will be targeted by the Local Authority as Deliberate Deprivation.
Capital will include the following:
- Assets such as savings and premium bonds
- Half of any joint savings accounts
- Large gifts you have given in the last 6 months
- Property after 12 weeks of being in residential care
Finally, it is worth noting that if you are relying on local authority to support your residential care, you may have little or no choice about the specific accommodation you are moved into. If you would prefer to enter a different home from that chosen by the Local Authority and it costs more than they have agreed to contribute, unless you have a third party who can make up the difference, you will not be able to go to that home.
If you’re confused about any matter relating to capital and care fees, it is best to contact a firm of solicitors who will be able to help you.
