Understanding Your Care Home Fee Planning Needs

Many people in the UK are understandably worried about having to put their family home up for sale in order to fund the cost of care home fees. It is important to understand the basic facts regarding care home fee planning before considering making any decisions.

Will I have to pay for my Care Home fees?

The Local Authority will carry out an assessment of your income and capital.

The principles regarding payment are:

a) If you do not have enough income to meet the cost of care and you have capital of less £14,250 the Local Authority will be required to pay for the cost of residential care. If you have sufficient weekly income and your capital is less than £14,250 then you will be required to make a contribution.

b) If you have capital of more than £23,250 (whatever your income), you will have to pay your care home fees in full.

c) If you have capital of more than £14,250 but less than £23,250 you will be required to make contributions from your capital. The Local Authority will be responsible for paying the rest of the care home fees.

Each resident is assessed as an individual. If your spouse or civil partner has sufficient income and capital the Local Authority may ask them to make a contribution. Any payment made by your spouse/civil partner towards the cost of residential care is made on a voluntary basis and can only be enforced by Court action.

Is my house at risk?

The Local Authority will usually take into account the value of your home when assessing your liability to care home fees. If you are unable to meet your fees from income or other capital the Local Authority may take legal action to obtain an order for sale of your property. You cannot be forced to sell your house unless an order for sale has been made by a Court.

The Local Authority will not assess the value of your house in the following circumstances:

a) If your spouse or civil partner is living in the property

b) If one of your relatives is living in the property and they are over the age of 60 years

c) If a dependent relative under the age of 60 years lives in the property

d) If your property is the main residence of children under the age of 16 years

If you enter residential care on a temporary basis the value of your property is disregarded for the first 52 weeks (subject to the Local Authority’s discretion). If you enter on a permanent basis the value of your property will be disregarded for the first 12 weeks.

The following assets are also disregarded:

a) Personal possessions

b) Compensation settlements administered by the Court or held in a trust

c) Social fund payments, for example winter fuel payments

d) Payments received from a charity

e) The proceeds of a life assurance policy or annuity

f) An interest in a trust where you have no immediate right to capital

What should I do?

Ultimately, it is vital that you take proper legal advice from a specialist solicitor. It is also important that you consider all of your options before deciding on the best course of action.