Funding care fees, fully or even partially, can be an expensive business. Understanding, therefore, what the state provides plus being clear about costs and affordability is essential. This article seeks to outline information which any self-funders should know.
About the 12-week property disregard
Where, excluding your property, your capital is below the threshold – in England and Northern Ireland, £23,250; in Wales, £24,000; and in Scotland, £26,000 (2014/15) – and your income is insufficient to meet the care fees, the local authority can assist with the costs for the first 12 weeks of permanent care. Any financial help beyond that period, however, will be a loan against the value of your property and recovered from the eventual proceeds of its sale.
About deferred payments agreements
If social services has assessed you as needing care and your capital is below the threshold, they can lend you the funds to pay for care, to be repaid from the proceeds of your property when it is ultimately sold. There is, however, a limit to the amount they will lend you. Plus it could also adversely affect your means-tested benefit entitlements.
About Council Tax exemption
Should you move into care and leave your property unoccupied, you should be entitled to a full exemption from Council Tax until it’s sold.
About Pension Credit and Severe Disability Addition
If you are entitled to Attendance Allowance, then subject to your savings and income, you may be entitled to claim Pension Credit with a Severe Disability Addition, but only where your property is on the market. If it is not on the market, it will almost certainly be treated as capital and affect your entitlement to this benefit.
About Attendance Allowance
Attendance Allowance is a non-means-tested, non-taxable allowance paid at the lower rate of £54.45 per week to those needing care by day or night, and at a higher rate of £81.30 per week for those needing care both by day and night.
About Registered Nursing Care Contributions
Irrespective of whether your stay in care is temporary or permanent, if the care home provides nursing care, the NHS makes a Registered Nursing Care Contribution. This currently amounts to weekly contributions of £110.89 in England, £120.55 in Wales, £100.00 in Northern Ireland and £75.00 (plus £166.00 for personal care) in Scotland and is paid directly to the care home.
About the National Framework for NHS Continuing Healthcare
Where your needs are primarily healthcare-related, you may be entitled to full care fees funding from your local Primary Care Trust following an assessment under the National Framework for NHS Continuing Healthcare. You can request a review of eligibility at any time.
About local authority funding if your money runs out
Once your capital reduces to the threshold, you can seek local authority assistance. If there is any possibility that you will not be able to meet the full cost of your care in the long term, arrange an assessment of your care needs to ensure they will step in to help with the funding when required.
About financial products to meet care costs
It is perhaps surprising that there exists only one dedicated financial product that has been specifically designed to meet care costs: the immediate needs annuity. This can provide a regular increasing income for as long as you need care, which should cap the cost of care from the outset. It is important, however, to seek advice and not to try to do it alone, as such annuities do not suit all circumstances.
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Lewis Wealth Management Ltd represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the Group’s wealth management products and services, more details of which are set out on the Group’s website www.sjp.co.uk/products. The title ‘Partner Practice’ is the marketing term used to describe St. James’s Place representatives.