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How to
Finance Care
We understand it can be difficult planning how to pay for care, at a time when you are dealing with decisions concerning the needs of a loved one.
Funding Partners
At Ashbrook Court we have worked with Eldercare Group for a number of years. Their advisers are accredited through the Society of Later Life Advisers (SOLLA). They work across the whole care home market, and provide free, impartial advice on what the options are for funding long-term care.
Nicky Cave, Managing Director of Eldercare Group answers some frequently asked questions below.
With careful planning, you can arrange finances to cover care fees for your loved one’s lifetime, giving you peace of mind that everything is taken care of.
How will my loved one Fund their Care?
Currently, if the person needing care has capital (in England) in excess of £23,250, they will generally be responsible for funding their own care. Their local authority will conduct a financial assessment that looks at their income and capital, such as the value of their house. If their savings or income later fall below the threshold, their local authority can reassess them.
Keen to speak to someone?
How does
Paying for Care Work?
If your loved one requires nursing care, a contribution or even all of their medical care could be funded by the NHS. This is non-means-tested and paid directly to the care home. More information is available here.
If your relative is eligible for support, their local council will conduct a financial assessment to decide how much they will pay towards their care costs. They must ensure that the help given is enough to cover the cost of a suitable care home. Your loved one can choose to find their own care home, but they will need to top up any additional fees.
If your loved one has less than £23, 250 in savings (in England), they can ask their local authority for a deferred payment agreement after a 12-week grace period. This means the council will cover the difference between their income (including any rental income) and care home fees.
The loan is repaid from their estate after they pass away. However, if they stay in care for several years, the debt could use up most of the home’s equity.
Income tax applies to any rental income, and capital gains tax might be due if they’ve lived in care for over three years. The local authority will also charge a set-up fee and interest on the loan.
Benefits for
Self-Funders
If your loved one is of state pension age, they will still be able to claim their pension whilst living in a care home. If they own a property, but there is no one living in it, they will not have to pay council tax.
All these questions and more can be answered by the team at Eldercare Group on 0800 082 1155.
NHS Continuing Healthcare funds care for adults with long-term, complex health needs. It can be used in a variety of settings outside hospital, including in a care home. Your loved one’s eligibility depends on their assessed needs, and not on any particular diagnosis or condition. More information can be found on the NHS England website here.
Your loved one is still able to receive, or make a claim for Attendance Allowance. This is a non-means-tested, tax-free state benefit. Details can be found here.
Understanding
Care Annuities
A care fees annuity is a type of insurance that pays for care costs for life. It can give families peace of mind ensuring costs are covered, no matter how long care is needed.
The cost depends on the age, health and care needs of the person requiring care. It is purchased with a one-off fee and is non-refundable if death occurs six months or more after purchase, unless ‘capital protection’ is taken out.
Income from the plan is paid, tax-free directly to the care provider for the rest of your loved one’s life. Any money spent on the plan will immediately reduce their estate for the purpose of Inheritance Tax.
If you share your relative’s age and required income (usually their care home fees minus any guaranteed income) we can estimate the likely plan cost. This will help you decide if further research is worthwhile. Estimates are free and carry no obligation.
When purchasing a care fees annuity, you can choose a fixed income or a plan that increases annually by a set percentage. If your relative moves care homes, the plan moves with them. Advisers can help structure the plan to account for fee increases. For those paying fees from savings or investments, it’s wise to forecast cash flow and discuss potential fee increases with the care home to ensure affordability.
If you have taken out a care fees annuity and made provision for future fee increases then this is a scenario that should never happen.
If you are funding the fees on a ‘pay as you go basis’ then, of course, it is possible that your funds might run out. You should speak with the care home about the options available if this were to happen.
Make a Care Enquiry
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