Many famlies will have experienced or heard of the enormous cost of any protracted stay in a residential care home.

What you need to know about care fees

More than a third of Britons aged over 55 say they would be forced to sell their homes if they required long term care in retirement. See Age UK -  https://www.ageuk.org.uk/

The annual cost of a room in a nursing home estimated to be some £50,000 to £75,000 – see:-

https://www.carehome.co.uk/advice/care-home-fees-and-costs-how-much-do-you-pay .

Firstly it is important to be aware that the NHS is responsible for meeting the full cost of care in a care home for a resident whose ‘primary need’ for being in care is health based.

This is known as NHS continuing healthcare – or ‘fully funded care’. This is a controversial area, as government policy is clearly to oblige a Local Authority to ensure that those who can afford to pay, do pay. Hence – whether your stay in a home is temporary or permanent, your local authority must carry out an assessment of your needs to establish firstly that you require care in a care home before it can consider whether or not to assist you with the cost.

Care fees are then payable, after assessment, based on a person’s assets. This is usually referred to as the Means Test. Means Testing is alternatively known as a Financial Assessment.

See gov.UK for the basic rules, summarised below.

From October 2023, the government introduced a new £86,000 cap on the amount anyone in England will need to spend on their personal care over their lifetime.

In addition, the upper capital limit (UCL), the point at which people become eligible to receive some financial support from their local authority, will rise to £100,000 from the current £23,250. As a result, people with less than £100,000 of chargeable assets will never contribute more than 20% of these assets per year. The UCL of £100,000 will apply universally, irrespective of the circumstances or setting in which an individual receives care, making it a much more generous offer than a previous proposal in 2015. The lower capital limit (LCL), the threshold below which people will not have to pay anything for their care from their assets will increase to £20,000 from £14,250.

Anyone who has capital of their own above £23,250 (2022-2023) will be assessed as being able to pay the ‘standard rate’. If you live in a care home that provides nursing care the NHS is responsible for meeting the cost of care provided by a registered nurse.

Residents with capital between £14,250 and £23,250 are expected to make some contribution from their capital as well as income. You should not have to make any contribution from your capital below £14,250, but you will still be expected to contribute from your income.

It follows that if you own a house and/or other assets amounting to more than £23,250 you will be expected to pay the full fee for reidential care until your capital is reduced to £23,250.

If you have Capital between £14,250 and £23,250, then both income and capital are taken into account in the local authority means test. Capital of between £14,250 and £23,250 will be assessed to show an assumed (or ‘tariff’) income. For every £250 or part of £250 of capital between £14,250 and £23,250 you will be assessed as though you have an extra £1 per week income.

Capital below £14,250 is fully disregarded for local authority charging purposes.

Is it possible to avoid paying Care Fees?

No – not if you have been assessed as being required to pay, as above.

If a person has recently disposed of assets (perhaps as a result of a downturn in health) by making gifts of property and/or cash assets then the means test may lead to a conclusion that the gifts amount to a deliberate deprivation of assets (deliberate deprivation of capital). If this is the case then you are assessed as if you do still actually hold the assets as your own.

Department of Health guidance to local authorities suggests that the timing and motive behind the transfer (the gift) should be taken into account.

This is where the use of trusts for asset protection can help. Providing a gift is made whilst there is no contemplation of going into care, in other words when a person is in good health, then property gifted to a trust will not be available to the Local Authority.

A comprehensive factsheet can be found on the website of the respected charity Age UK

See also – Care Fees Advice Bureau  and of course Gov.UK.

https://www.gov.uk/government/publications/social-care-charging-for-local-authorities-2022-to-2023/social-care-charging-for-care-and-support-local-authority-circular-lacdhsc20231

If you require further information about Asset Protection, please contact DRA Legal, DRA Conveyancing Ltd, for a no-obligation consultation in our offices, or in your own home. Fill out the message form on the contact page to provide a brief outline of your enquiry and we will contact you at the very latest within 24 hours.