You’ve brought up children, put them through university and now
you’re approaching retirement. It’s time to think about relaxing….
but can you, if you have elderly parents?
One in five British adults have elderly parents who require care and
assistance and one in four of those aged over 65 will require some
form of Long Term Care. In, fact almost everyone in the UK will
either need care or become a carer – according to health think-tank,
The King’s Fund and others, including Age Concern and Help the Aged.
Denial and ill preparation
Despite this, however, most adult children are in denial about their
parents ever needing care. Care homes are a subject that’s just too
taboo for them and/or their parents to even think about. So, when
mum does suddenly have a fall or stroke, or her dementia has reached
the stage where she can’t safely live at home, where do they turn?
The present system of paying for care is governed by a labyrinth of
legislation guidance and rulings dating back to 1948 – and is rife
with inconsistencies when determining who pays for what. People are
simply ill prepared for what to expect – many missing out on funding
or support they could get if they were in the know.
For both adult children and their parents, moving into a care home
can be an incredibly emotional and stressful time. On the one hand,
there will be the wanting of the best care possible for mum, on the
other hand may be the feeling of guilt for not being able to provide
it themselves. And then there’s the money. Mum wanted to leave her
house to her children, but it looks like it’s going to be swept away
in care fees!
Top Ten Tips
The specialist adviser, NHFA Care Fees Advice unravels who pays, or
who is responsible for what. It’s Top Ten Tips will take a lot of
the worry out of paying for care:
1. Attendance Allowance is a non-means tested, non-taxable DWP
benefit paid weekly at the lower rate of ВЈ43.15 if care is needed by
day or night – or at the higher rate of ВЈ64.50 if needed by day and
night. Saving up to ВЈ3,354 pa.
2. Twelve Week Property Disregard and Deferred Loan Agreements The
local authority must disregard the value of your home for the first
12 weeks of residential care and contribute towards your care fees if
your other capital is below ВЈ21,500. Saving approx ВЈ3,500
3. Council Tax Exemption – If you move into a care home and nobody is
living in your previous home, the property should receive full
exemption from Council Tax until it’s sold. Saving your Council Tax
4. Pension Credit – Subject to other income and capital, Pension
Credit (including severe disability addition) with Attendance
Allowance can be claimed whilst your property is on the market.
Saving ВЈ167.50 pw
5. NHS Funding in Nursing Homes – The NHS will pay a Registered
Nursing Care Contribution (RNCC) towards nursing home fees, even if
in a nursing home for short respite periods or, you could get full
NHS funding for nursing home fees if you meet the health authority’s
eligibility criteria for continuing care. Saving up to ВЈ139 pw for
RNCC or the full cost of care for NHS Continuing Care.
6. Couple’s Savings – The local authority only has the right to
financially assess the member of a couple that requires the care.
Individuals, who are paying for their accommodation from joint
savings with a partner at home, should split joint accounts into
separate single accounts drawing the care home fees from the account
of the person in care only. Thus ensuring State assistance arrives
earlier than if depleting joint capital. Saving your partner’s savings.
7. Enduring Power Of Attorney – Drawing up an enduring power of
attorney when fit and well, for the sake of paying a solicitor a
small fee, could save a lot of expense and complications if in the
future you were unable to cope with your own affairs and had to
involve the Court of Protection. Saving the cost and complications
of dealing with the Court of Protection
8. Section 117 After Care – Older people with mental illness who are
admitted to hospital under Sections 3 of the Mental Health Act 1983
for assessment and treatment are, on discharge, entitled to Section
117 aftercare under the same Act. This can include full funding for
a care home place. Saving the full cost of care.
9. Immediate Need Care Fee Payment Plans – Designed for older people
with an immediate need for care, can deliver a regular guaranteed tax-
free monthly income higher than can normally be achieved from
traditional investments or annuities. Paid tax-free if direct to the
care provider, they are a way of meeting and capping and meeting the
initial cost of care to the cost of the plan for as long as care is
needed. Normally requiring only part of the proceeds from selling a
home , they enable older people to fulfill their wish of leaving an
inheritance for the family. Saving an inheritance and capping the
cost of care
10. Investment Bonds – that contain an element of life insurance,
usually 1% of the value of the fund, as a death benefit are currently
disregarded in the means tests for both care and pension credit.
Protecting your savings
And finally. Families should be encouraged to seek advice. Funding
long-term care is a complex area and, as the OFT and others have
reported, advice and information at this difficult time is not
readily available. Even when you might think all is sorted out,
circumstances can change and so does the funding. A specialist care
fees adviser such as NHFA Care Fees Advice can give expert guidance
on all these issues – making the whole process for the whole family
that much easier and successful.
Be prepared. Don’t let care costs leave a legacy of decimated family
assets. For further information and NHFA contact details go to a
feature article on the Care Directions website:
caredirections/frame_comment_60.htm
caredirections