The prospect of paying for care home fees often strikes fear into clients, but this is often because of misconceptions and horror stories in the media. A clearer understanding of some of the key features can assist families to plan for a time when care might be needed or to assist a loved one already in care.

When does the Local Authority become involved?

Your local authority is under a duty to assess your level of care and support needs, regardless of how much money you have. Usually, it is at this stage that a local authority will ask for details of your finances i.e. do you own a property and have you got any savings. This information is important to the local authority so that they can work out whether you will be required to contribute to the costs of your care, or whether they will part to fund the placement (in part or in full).

When will the Local Authority help pay for my care?

An individual with savings over £23,250 will be expected to self-fund the costs of their care i.e. pay the full cost. Some financial assistance will be available from the local authority where savings are between £14,250 and £23,250 and where an individual has less than £14,250 the local authority will generally fund the full cost of the care (although they may require a contribution from that person’s income).

Of course, if your needs require it, there may be financial assistance from the NHS, but this is extremely hard to secure and retain.

Top up fees

If you need to move into a care home and the local authority are going to be paying towards some or all of the costs of your care, the choice of home may be limited. The local authority is only obliged to find you a home that is suitable, available and within their budget. The care home itself also has to be willing to enter into a contract with the local authority to fund part of all of your placement. At least one home within the local authority’s budget must be offered.

If you would like to receive care at a home that is more expensive than the local authority’s budget then your home can be used as collateral or a third party may be asked to pay the ‘top-up’.

If a third party is to pay the top-up then they must be willing and able to do so for the duration of your stay. Failure to continue funding your placement could result in you having to be moved or the third party could be pursued for payment.

Deprivation of Assets

Local authorities will look back through your finances to the date that you were first considered to have care and support needs. If during this period you have disposed of capital or income that should have been used to finance your care and there was a reasonable expectation that you would need care the local authority may consider that you have deliberately deprived yourself of an asset. For example, if you have put your home into your children’s names or made significant cash gifts.

If you are considered to have deprived yourself of an asset the local authority will treat you as still possessing the asset that you gave away and assess your finances as though it still forms part of your estate. If you don’t have enough resources to fund the contribution you need to make towards your care for the period the local authority have assessed that you should be able to, then this will lead to debts which will need to be paid on your death.

Can I protect my property?

Yes. This can be done by including a Life Interest Trust in your Will.

Whilst you and your spouse/civil partner are both alive and one of you is living in the property whilst the other is in care, then the value of the property cannot be taken into account for calculating care home fees. However, the problems arise when one of you dies and the other needs to move into a care home.

A Life Interest Trust can be used to protect half the value of any jointly owned property should the survivor of you need to move into care. It is important that you prepare these Wills whilst you both have the capacity to make a Will and whilst you are both alive.

If there are sufficient cash assets to do so, it is also possible to create a Life Interest Trust over cash assets, to protect some of their value.

If you would like further advice on Life Interest Trust Wills, please do not hesitate to contact me on 01530 564 498 or c.day@timms-law.com