By Faye Evans, TEP, Partner at Churchers Solicitors.
Paying for care in later life is an emotive issue. Stories appear in the press on a weekly basis, often written in terrifying terms, so it is not surprising that more and more people are looking for advice on this very complex area of law. So, what is the truth behind the tabloid myths?
Myth 1: We Will All Need Residential Care In Later Life
The short answer to this is, no, we won’t. According to the most recent census (2011) only 3.2% of the total population of over-65s were living in care homes and, despite the increase in the overall population in the UK, the number of people living in care homes who are aged 65 and over has remained almost static since 2001 (291,000 individuals in 2011 compared to 290,000 in 2001). There are others who will receive some element of care in later life, whilst remaining in their own homes. Care at home ranges from someone delivering a hot lunch each day, to having live-in carers working round the clock. Care and support is often provided by unpaid family members, friends and neighbours.
Myth 2: If I Have A Medical Condition, My Care Will Be Paid For In Full By The NHS
Again, this is not necessarily true; some care may be paid for by the NHS, some by the Local Authority and some you may have to pay for yourself. Non-means-tested funding awards that can be made include:
- Continuing Healthcare (‘CHC’) (only for those with a ‘Primary Health Need’);
- NHS Funded Nursing Care (‘FNC’) (for nursing care provided by registered nurses);
- Intermediate Care Package (‘IPC’) (most commonly applicable upon discharge from hospital to reduce the likelihood of readmission);
- Fast Track Pathway (for those with immediate and urgent healthcare needs due to a rapidly deteriorating condition).
Funding is subject to regular review and, where funding has been agreed, it should not be assumed that this will apply for life. What does or does not qualify as a Primary Health Need is the subject of much argument. If you believe funding has been wrongly refused, you may wish to seek advice from a specialist solicitor who will review the facts and advise whether an appeal may be appropriate. Funding (whether by the NHS or the Local Authority), is not limited to residential care and can be awarded for those receiving care at home.
Myth 3: I Will Have To Sell My House To Pay For My Care
For some people, this will unfortunately be the case. However, there are numerous circumstances when this will not be necessary. If you do not qualify for the types of funding discussed under ‘Myth 2’ above, you may be assessed for Local Authority funding for social care. Social care funding is means-tested. The local authority will review your capital assets, as well as your income, during a financial assessment. The local authority must disregard the value of your house if any of the following individuals are living in it:
- Your spouse/civil partner;
- A relative over 60 or your child (under 18);
- A disabled or incapacitated relative irrespective of age.
There are other circumstances in which social services can be asked to ignore the value of the house so, if in doubt, please seek professional advice on your position. Even if the value of your house is not excluded, you may have other means by which to pay for your care. Alternatively, you may be able to rent out your house to provide additional income, or the Local Authority may agree to a deferred payment agreement in exchange for a legal charge over your house. When considering your options, it would be wise to consult a reputable Independent Financial Advisor.
Myth 4: If I Transfer The House Into My Children’s Names, It Can’t Be Used For Funding My Care
This is the most common misconception that I encounter in practice. There are many reasons why transferring your house to someone else may not be a great idea and if you are thinking about doing this, you should definitely speak to a specialist solicitor before you do anything.
Failure to get proper advice may result in the house being available to the Local Authority when it otherwise would not have been, alternatively, you may find yourself in a position where you have no legal right to stay in your own house.
The Local Authority has the power to bring assets back into consideration after they have been given away, if they find that the primary reason for the gift was to avoid paying care home fees. This leads us on to the next myth:
Myth 5: The Local Authority Can’t Touch Anything I Gave Away More Than Two Years Ago
This is not true. In my opinion there is no limit on the length of time that the Local Authority can look back over, with a view to bringing assets back into consideration as a means of funding care.
The key issue is whether, at the time of the gift, there was a foreseeable need for care. If so, what was the primary motivation for making the gift?
Myth 6: There Are Companies Out There Who Can Guarantee You Won’t Have To Pay Care Fees
Clients tell me of seminars they have attended where they are promised a guaranteed way of avoiding paying for care. The fees charged by the companies running such seminars are often wildly inflated and can run to thousands of pounds.
If you are told by anybody that a transaction you are entering into or a Trust you are putting in place will guarantee that you won’t have to pay for your care in later life, please get a second opinion before signing anything. The fact is that there are very few ways in which assets can be put out of the reach of the Local Authority financial assessment, and those that exist will only apply to specific people in specific circumstances. Any loopholes that currently exist in the law are likely to be closed in the future as the government seeks to stop people avoiding paying care fees.
A reputable advisor should point out the unpredictability of this field and make sure that you are aware of all the potential outcomes of your proposed transaction. Remember, an intention to avoid care fees is prime justification for the Local Authority to bring an asset back into consideration. By signing up to something with a company whose promotional material advertises ways in which to avoid paying care fees, you are flagging up your intention to the Local Authority.
Myth 7: Paying For Care Is Always A Bad Thing
Take a look at the variety of care homes there are in your area. Some are lovely, but there are others where you would never be able to imagine yourself living. Planning how to pay for the type of care that you would want in later life may be a more sensible option than trying to avoid paying for anything at all.
What Should I Do?
Firstly, keep things in perspective, it is not a certainty that you will be required to pay for care in later life. Secondly, if you are concerned (either about a current finding against eligibility for funding, or about potential fees in the future), speak to a specialist solicitor sooner rather than later to discuss all your options.
If you have any questions or wish to seek advice on any issue concerning care home fees, the writing of a will, management of an estate or lasting powers of attorney, please call Faye or someone from her team on 023 9282 0747.