Before you move into a care home, an assessment is carried out to help determine how much you will have to contribute to your care home fees. This is called a “care home assessment” or a “means test”.
Your annual income, assets, the value of your property and benefits are all considered when this assessment is carried out. Personal possessions and life insurance policies are excluded from this assessment.
Long-term care funding is often underestimated and not anticipated until the care is needed. Preparation for a care home fee assessment is minimal. This sometimes leads to an inaccurate fee assessment that will ultimately have knock-on effects on your fee calculations and the financial responsibilities of you and your loved ones.
The threshold whereby you will be solely responsible for your care home fees for England is if you have £23,250 or more in assets. The regulations surrounding what has to be listed as an asset are complicated and any attempts to mislead the number of assets you have will be classed as the “deprivation” of assets.
Seeking the guidance of a legal professional can eliminate this and is advised to stop the consequences that come with the deprivation of assets.
Below we discuss the factors that are assessed.
How your capital is assessed
As previously stated, your capital is the deciding factor as to how much you can afford to pay towards long term care home fees.
In England, there is an upper threshold of £23,250 and a lower threshold of £14,250. If the care home resident had £22,00 in savings/assets, then the lower threshold of £14,250 would be deducted from that amount, leaving £7,750. This would be the capital of the resident.
Your property
If you are a homeowner, then the value of your home/equity in the property will contribute to how much you are expected to pay for your fees.
Your house will be excluded from the care home fee assessment if:
- Your spouse or partner lives there
- You have a child under the age of 16 that you are responsible for
- A close relative over the age of 60 lives at the property
- If a former partner who you are separated/ divorced from lives at the property as a single parent
- A younger relative who is disabled lives at the residence.
If your house is owned jointly, then only the share of the individual who is moving into the care home residence will be evaluated in the means test.
It is also important to note that there is an automatic 12-week property disregard, where the first 12 weeks of your stay will be valued without the inclusion of your property.
The 12-week property disregard is only valid for permanent care homestays. This is to help care home residents decide what they want to do with their properties when they choose to stay in a care home full time.
Suppose you are moving into a home temporarily. In that case, you will not be eligible for the 12-week property disregard, and the value of your house will be incorporated when your fees are calculated.
If a permanent care home resident chooses to sell their property before the 12 weeks is up, the property disregard will continue until it is sold.
A “Deferred payment agreement” can also be applied for when looking into funding long-term care home fees. This is the process where you apply for a loan from your local council to use the value of your home to cover your care home fees.
If an individual is approved for a Deferred payment agreement, then the loan will not need to be paid back until the property has been sold or the resident has passed away.
Other Incomes and Finances
As ongoing care fees can be steep, especially if they have not been predicted, attempts to manipulate capital are often made by intentionally giving away expensive items and large sums of money.
Attempts to fall into the lower threshold to avoid care home fees are also made by putting large assets and property into loved ones or family members names. This is all classed as deprivation of assets.
If the local council detects the deprivation of assets, then you might not be eligible for any government assistance, even if you do not have the means to support your care.
Why the help of a legal expert is necessary
As previously mentioned, the fees for permanent care homestays can be incredibly high, and your capital must be accurately assessed so that your expected contributions are correct.
Seeking the help of the right solicitor can ensure that you have not misrepresented your income and net worth.
Knowing what you are eligible for and having your financial affairs in order can help put your mind at ease during a time that can prove stressful and challenging.
A solicitor can also help ensure that there are no unexpected financial penalties that your family or loved ones are faced with. Gaining advice from a solicitor can help you break down the legal jargon that comes with these applications providing you with full transparency of your care home agreement and fees.
To find out more about Care home fee assessments, contact us and speak to our specialist private client team who will be able to discuss and explain this complex area of law with you.
Please give us a call on 023 9244 8100 or make an online enquiry