Your long-term care questions answered

By Joanna Robinson

PUBLISHED: 07:44, 10 August 2012 | UPDATED: 07:44, 10 August 2012

After the recent White Paper on social care failed to address the all-important question of how long term care will be funded in the future, This is Money received a flurry of questions from concerned readers about how this might affect their circumstances.

Most revolve around what will happen to people’s home and savings if they need long-term care.

We’ve put a selection of your questions to Alex Edmans, SAGA’s care funding expert. 

Paying for care: your questions answered

Will my autistic son be hit if I need care?

My home is in joint names with my son. As I get older (I am 68) if I need care how would he be affected? He is a 29 year old high level autistic and is deemed by government as not suitable for employment. SB.

The rules governing the treatment of property in the financial assessment to pay for long-term residential care include a number of instances when the value of a property should be disregarded.

One of which states that if a relative who is incapacitated occupies the property, the property value should be excluded from the financial assessment, allowing the relative to remain in their home. 

There is no official definition of ‘incapacitated’ included in the guidelines but they suggest that if the relative receives certain social security benefits such as incapacity benefit or if they don’t claim the benefits but the degree of incapacity is equivalent to that required to qualify, they should conclude incapacity and disregard the property.

If your son is deemed not suitable for employment it seems likely that your property should be excluded from the financial assessment under these rules, assuming he remains living there of course.

Mum’s home is in our name, will we have to pay?

My mother has dementia and is nearing the point of going into a care home, she currently receives help from our local authority in the form of carers twice a day, she has approximately £9,000 savings and lives in a property worth £130,000 which my sister and I bought with her money, but it is in our names. Will the care home take all the money from the sale of her property and is there a way we can avoid this? I have heard that there is a 7yr time when the money becomes ours. I know this sound heartless but I have gone part time to care for her and have put so much time and effort into her care that it seems such a shame that we have to hand the money over. SW. 

Unfortunately the seven year timescales for assets which have been gifted applies to the treatment of gifts for inheritance tax purposes. With regards to the financial assessment for long-term care funding there are no set timescales and the local authority could look back as far as they wished to question the removal of any assets from an individual’s ownership.

If they believe that a transfer of ownership has been made so an individual qualifies for financial assistance sooner than otherwise they can treat the transfer as a deliberate deprivation of assets and notionally include the value of the assets in the financial assessment. 

Whether or not your mother has to fund her own care will depend on how the local authority treat the ownership of the property seeing as it is in your names but was bought using funds from the sale of your mother’s own property.

If they disregard the house, based on her savings your mother should receive the maximum financial support available from the local authority. However, if they treat her as still owning the house, your mother will have to use the value of the property to cover her care costs.

Given the level of her savings, she should qualify for funding for the first twelve weeks, and could also apply for an interest-free loan from the local authority to be set against the property to help cover costs from week 13 onwards.

Will there be anything left in my aunt’s estate?

Four years ago I had to arrange for my aunt to enter a residential care home. My aunt paid part of the fees based on her State Pension and Attendance Allowance whilst the local authority agreed to pay part which they would recoup from the eventual sale of her retirement home. My aunt unfortunately died last year and the property was originally up for sale at £116,000 but was eventually sold for £50,000 earlier this month. Fortunately my uncle had arranged a ‘Tenants in Common’ agreement which ring-fenced 50 per cent of the assets as this was bequeathed to me in his will. The Local Authority are claiming £43,000 which can only be partly repaid due to the Tenants in Common arrangement and that my aunt’s estate is likely to be, after fees, in the region of £22,000. Does the threshold of £23,250 still apply even though my aunt died last year, thereby preventing the local authority from claiming anything? Or if the assets total, say £24,000, will all of this be taken by the local authority or just the excess over the threshold of £750 as in this example? Lesley

My understanding of the deferred payment scheme has always been that the loan can only accrue to the limit based on the current means test levels i.e. In England, those with over £23,250 are responsible for funding in full, those with between £23,250 and £14,250 receive part local authority funding and make some contribution from their capital and income, those with under £14,250 do not have to contribute from capital.

Therefore the monies due under the deferred payment scheme should be calculated based on these amounts. 

Only the market value of your aunt’s half of the property should have been taken into account in the financial assessment and as the market value equated to just £25,000 once sold, the amounts due to be repaid under the deferred payment scheme should be based on the market value.

However, this will be dependent on the local authority being comfortable with the sale of the property at a much lower price than it was originally valued for.

I would expect your aunt’s estate to be left with at least the £14,250 as the minimum amount an individual can retain from their capital when paying for their care costs.