Care Home Fees – paying for your golden years

It is something that many of us have to face up to as we grow older. Will I be going to live in a Care Home and how will I pay for it? We would all like to remain independent for our entire lives, but there may be a point where additional care is needed.

Some people do have to pay their care home fees, but this does not always mean having to sell your own home or liquidate assets that you would prefer to keep for an inheritance gift for your loved ones.

The amount you pay towards your care home fees will depend to some degree on your local authority. prior to moving into a care home, they will make a financial assessment to determine how much you have pay towards the cost of your care. It may be you do not have to pay anything at all.

The financial assessment

The financial assessment will find out your about your means and make a decision based on these figures how much you will have to pay. This can include:

Your savings and the interest on your savings.
State and/or private pension.
Benefits such as Attendance Allowance or the care component of any Disability Living Allowance you may receive or Pension Credit.
Investments you may have such as stocks and shares
Any property that you own

Before your financial assessment, it is a good idea to check that you are receiving all the benefits you are entitled to claim. That is beacuse any contribution you may have to make towards your care home fees is worked out as if you are receiving all relevant benefits.

No matter how much you have to pay towards care home fees, you must be left with £21.90 a week to spend as you wish. If you get the mobility component of the Disability Living Allowance, you will continue to receive this even after you have taken up residential care.

If you live in England and have over £23,000 in capital, the financial assessment will conclude that you are able to meet the full cost of your care home fees. If you have below £14,000 in capital, it will be disregarded in the final calculations.

Will I have to sell my house to pay my Care Home fees?

The answer is no to begin with but that can change. If you become a permanent resident in a care home, the local authority may include your house as capital after 12 weeks. However, But if certain categories of people still live in your house, it will be excluded as capital. The people who can continue to live in your home include:

Your wife, husband, civil partner or partner
A close relative who is both incapacitated and over the age of 60 or
Your ex-wife, husband, civil partner or ex-partner if they are a single parent
Your carer

If you go into a care home on a temporary basis, you will have a financial assessment after the first eight weeks of your stay. If you stay for nine weeks or longer, the local council will then carry out a financial assessment, but as your stay is only temporary, your house will not be counted as capital.

Deferred payment to keep your home

If you would like to retain your home because you believe you will be fit enough to return to it and lead an independent life again, you can ask your local authority to make deferred payments. The local authority may agree to such an arrangement if you are:

Trying to retain your house
If you have to pay all your care home fees because your home is counted as capital
If you do not have enough income or other capital to pay the fees

Avoiding the full impact of paying for care home fees can be made easier if your house is owned as tenants in common. As long as there is no indication that you are deliberately trying to avoid paying for your care home costs by transferring your property rights with the intention of avoiding paying for care home costs, splitting the ownership of a property as tenants in common can protect half the value of the property from care home fee assessment. This cannot be done purely to avoid paying care home fees, but should be done for another, valid reason such as ensuring that your children can inherit if your spouse remarries.

Lifetime Trusts

You could transfer ownership of your home to another family member while still alive. You can also make gifts to family members, but be aware that the council may assess you differently if they believe that this is done to reduce your capital before an assessment and to try and avoid paying care home fees. this is called deliberate deprivation.

For some people the alternative to selling your home or transferring it to another family member may be to rent iit out and then to use the rent to pay your care home fees.

Making your Will and checking it is suitable

For anyone who is going to take up care home residence, it is strongly advised that you make sure that have a valid will and that it is up to date.