Care fees do concern a great many people and it is easy to understand why. Many people are concerned about the possibility that they will go into care and that their family’s inheritance will be eaten up. The cap being placed on care fees has been delayed until 2020 and could, of course, be put back still further. The real problem about the proposed cap is that is will not provide the protection that many believe it will. This is because the cost of care is divided into the cost of providing the actual care and what are called the ‘hotel costs’ – this means the cost of providing accommodation, meals, laundry services, heating, etc., etc. There is no cap being placed on the ‘hotel costs’ only on the cost of providing the actual care.
Many fear that part of the cost of the actual care will be hidden in the ‘hotel costs’ and so the cap will be ‘got around’ by local authorities who are hard pressed to find the funds needed. This is obviously an important topic for many people. If care fees concern you please use the READ MORE link and call the helpline with any questions you have.
As mentioned above, it is becoming clear that the legislation does not place a cap on the total cost of long term care even though many people are not yet aware of that. If, as suggested above, local authorities whose budgets are already stretched keep care fees artificially low while ‘padding’ the costs allocated to all the other services for which they can continue to charge over and above the ‘cap’ then it becomes impossible to agree that the proposed cap is really meaningful. It is certainly not possible to say that it will prevent an estate being ruined by care costs.
It may be tempting for some people to give away money or their home if they feel they might need long term care but this is classed as ‘Deprivation Of Assets’ (depriving yourself of money or assets in a deliberate attempt to avoid paying care fees). It is seen as a form of fraud. Not only that, it will deprive people of funds which may be needed in other ways.
There are asset protection schemes which can work but they are usually very expensive to set up. However, if this topic is something that concerns you then the following may be of interest.
Often no care is needed while both spouses/partners are alive; it is often the survivor who needs care. While both are still alive and retain capacity they can write Wills in which they each leave their share of their property to their chosen beneficiaries but give the survivor the right to live in the property. The gift of that share of the property to the eventual beneficiaries only takes place upon second death, just as it would normally. This legally protects the right of the survivor to live in the home as long as they are able. In the meantime, however, it is not part of their personal estate as an asset. That means that only the survivor’s share of the property can be used to pay care fees (plus any other money they have of course). Half of the property is saved as a guaranteed inheritance for the beneficiaries. It is not deprivation of assets because the person going into care has not deprived themselves of any assets they personally own.
If one of them goes into care while both are still alive then the property should not, at that stage, be part of the assessment for payment of care fees because the other one of them is still living there. In fact, if there is any person who is considered a vulnerable adult living in the property, whether or not they are a spouse and whether or not they are one of the owners, then the property is a ‘disregard’. Anyone over the age of 60 years, regardless of their health, is considered a vulnerable adult according to current regulations.
The arrangements mentioned here are easy to set up, are not expensive at all and will make it much more difficult for the local authority to take the property pay for care. However, it is something that requires more detailed discussion before any decision is made and it may not be suitable for you. We welcome the opportunity to talk to you about it and to explain it more fully. If you would like to do so please call our helpline.