If you, or your relative, have reached the point where it becomes preferable or necessary to move to a setting where support can be provided in a care home, it’s critical to know all your options, as well as the likely level of care home fees, before making any major decisions.
What level of support is needed?
A home registered simply as a “care home” will provide personal care that covers help with washing, dressing and giving medication. Should you require medical or nursing care you will need to be in an establishment registered as a “care home with nursing”, also known as a “nursing home”.
How far should you plan ahead?
Obviously, it is essential to choose a home where the level of care required is readily available, and where you will not be spending money on services you will not need. Equally, if your health is declining rapidly, that approach may need to be balanced with looking ahead and anticipating a higher level of care in the near future in order to avoid having to move from one home to another.
Your GP will be able to advise on whether nursing care is appropriate (short or long term); but it will certainly be needed if, for instance, you require:
- Dressing of an open or closed wound
- Artificial feeding
- Medicine through injections
- Intensive rehabilitation resulting from a debilitating disease or surgery
Planning your nursing home care
Often the choice of a care home or nursing home has to be made in a hurry – in the aftermath of an illness, hospital stay or fall – giving you limited time to make a decision on where to go, or to plan how you meet the fees. Choices may also be limited because some homes can have waiting lists. But the more time you can spend choosing the right home, the better.
Choosing the right nursing home
The first important consideration is location – ideally it should be convenient for friends and relatives to visit. And while it might seem natural for someone to move to a home close to where they have always lived, the support network for that person may have changed, making it advisable to move close to immediate family or those in the best position to make regular visits.
Paying for care
- Transferring your home to family
Often families believe that by gifting their property to loved ones it will protect their home. This is not the case and can leave you open to big risks for example, the people you gift the property to may:
- Get divorced
- Become bankrupt
- Die before you decide to sell the property
- Have their own care issues
In any of these cases by giving your property to one or more people, they become the owners and that may cause a whole host of other problems.
It could be tempting to give away or sell your house to relatives to avoid the fees to avoid paying the full cost of care. There have even been cases of people ‘selling’ houses to a relative for a nominal fee in order to transfer legal ownership.
The local authority will ask about any previously owned assets, and take into account any reasons you had to hand over assets or property to other people together with the timing of the transfer, motive and the sums paid.
In the worst case scenario, the transfer could however be seen as ‘deliberate deprivation’ and the sale reversed, with the power to claim care costs from the person the assets were transferred to.
- Creating a trust
Many financial advisors will tell you that it possible to avoid paying care home fees, as long as the necessary protection plan has been implemented prior to care being required. The argument is that putting your property into a Trust means that it will become a protected asset and therefore cannot be used to cover care home costs.
They also argue that the major advantage of transferring property into Trust as opposed to transferring it to say, a family member, is that the Settlor (person placing property into Trust i.e. you) is able to retain control as to how that asset is used. As the property is placed into Trust instead of transferred to an individual, it means that there is no Capital Gains Tax (CGT) liability for the beneficiaries. A long term benefit is that Trustees will not need to go through the expensive and time consuming process of Probate in order to sell the property or transfer it.
Be wary of any company or scheme that claims to protect your home or assets from being sold if you go into care by placing them in trust. Local authorities are increasingly wise to these type of schemes, with teams in place to ensure residents are not using them to get out of paying rising care costs.
Crucially, seek expert advice and make sure you know the rules around care costs to avoid falling into any traps and losing more than necessary.
- Assistance from the local authority
You may hope for help with these from your local authority, but this is means-tested and thresholds are very low.
If you have more than £23,250, you will have to pay for care. Below this, you will contribute with the amount based on means-testing.
This includes savings, income, and your property may be counted as capital after 12 weeks if you move into a care home on a long-term basis. However, it will not be counted if, for example, your spouse or civil partner still lives there. Once savings fall below £14,250, only income is considered for a means assessment.
According to healthcare analysts LaingBuisson, the average cost of nursing care is £750 a week.
Reforms are underway to reduce the likelihood of anyone with ongoing care needs losing their home and all savings. The government is introducing a £72,000 cap on costs in April 2016 before the state will step in, but this doesn’t cover accommodation or food bills. A flat rate of £230 is currently proposed for these, which for many won’t meet the cost.
So what can you do to reduce or extinguish costs?
Unfortunately, there is no safe easy obvious way to circumvent paying for nursing home fees apart from financial planning many years ahead which most of our elderly parents never considered and we have not planned for as their older offspring.
This information provided in this article is not intended to constitute legal or financial advice and each relationship breakdown requires careful consideration in our view by a fully qualified Solicitor and qualified Independent Financial Advisor before decisions are made and before you embark on a certain course of action.
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