Long Term Care
If you have savings or capital of more than £23,250 and require care in your home, you are normally expected to cover the full cost. Between £14,250 and £23,250 you will be expected to contribute towards the cost of your care.
Although your home should not be included in the assessment while you are living in it, your income will be taken into consideration.
The same defined thresholds are used if you require residential care. However, if you live alone and go into care the value of your home will also normally be taken into consideration and this will count towards the upper limit threshold of £23,250. Only when your total assets are lower than this figure will the local authority contribute towards your care costs.
It is not surprising that few of us have considered what the effect might be on our savings and investments, or even our home, if we ever needed residential care later in life.
Most people assume that we will pass on our assets to our children or other relatives in due course, yet this may not always be the case unless careful arrangements have been made to protect our assets from being taken to pay care home fees.
Thanks to advances in medical science and a general improvement in health and fitness, everybody is living longer. Even with this in mind, it is highly probable that one or even both partners in a household will require long-term residential care at some point in their lives. This is particularly so given that it is becoming much less common for elderly parents to move in with their children these days.
THE CURRENT SITUATION - In recent years, it has become increasingly apparent that the State will only provide for those with little or no savings or assets. Everyone else will be expected to pay at least part, if not all, of his or her own costs. Currently, anyone with assets in excess of £23,000 (this includes the family home) would not be eligible for any state help with their residential care fees. If you have more than £14,250 but less than £23,250 you would only be entitled to partial assistance.
The net result is that anyone who owns their own home is unlikely to receive any assistance even though they do not have large amounts of cash assets.
Even if you don’t have the cash readily available, the Department of Social Security can still place a charge against the family home, which allows them to recover the moneys owing when the property is eventually sold.
Average residential care fees start in the region of £500 per week so it is clear how quickly assets can be eroded. The DSS has often become the sole outright owner of the family home after the death of an elderly parent who had been living in a nursing home. But there is a solution.
Lasting Power of Attorney (LPA) - Property and Financial Affairs
These are considered as important if not even more so, as having an up to date will. This LPA allows someone to be appointed as an
attorney to manage their financial affairs when they are unable to do so this could be in the event of illness or accident so an LPA
is not just for the elderly to consider- anyone can be involved in an accident at any time.
Without LPA in place the court will decide who to appoint as a deputy as this process takes a long time, and in that time all the assets are frozen this could cause major issues in a family, arguable even more so for younger families, if the main income earner was involved in an accident, there is a mortgage in place, income and savings In their own bank accounts and these assets get frozen how would the spouse/ children cope?
Lasting Power of Attorney (LPA) - Health and Welfare
This type of LPA is required is the donor wishes the attorneys(s) to make decisions with regards to:
- Consenting or refusing to medical treatment.
- Deciding on the level of care the donor may require.
- Arranging what the donor will wear, eat, social activities, and, holidays.