Who Cares Who Pays? Funding of Long Term Care

Funding of Placement 

The cost of care, if you have a primary health need should be funded free by the NHS. In many cases this should be considered first and you should seek advice about it. 

There are other situations where you do not have to pay for your care including: 

Intermediate Care 

If your place in a care home has been arranged as part of a package of “intermediate care” where you are having short-term therapy or treatment, either following a period in hospital, or to avoid you having to go into hospital, it will be free. Such care is time limited and not normally longer than six weeks. 

Aftercare Services 

If you have previously been detained in hospital under Section 3 of the Mental Health Act 1983 (this would be for treatment), your care should be provided as aftercare under Section 117 of that Act. The Local Government Ombudsman has recommended that Local Authorities which had previously charged for such services, should have taken steps to identify residents who may have been improperly charged and taken steps to reimburse them or their estates. 

Some War Pensioners

The Veterans Agency, formerly the War Pensions Agency, can pay towards the cost of a care home providing nursing for War Pensions in very specific circumstances. This is for people with a Higher Rate of War Pension.

Self-Funding Your Care 

If your care needs are ancillary or incidental to the need for accommodation of the kind which Social Services should provide, you will need to fund the cost of your care, if your capital is over £23,250 (England) £23,750 (Wales) but you will have help towards this from: 

Attendance allowance/disability living allowance (Helpline 0845 3000336) 

The amount changes slightly each year but the higher rate is £79.15 and the lower rate is £53.00 (2013 -2014)

NHS funded nursing care

The NHS pays a contribution towards the nursing care provided by a registered nurse, where you receive care in a nursing home (FNCC) (£109.71 per week in England), for 2012/2013. In Wales - £120.56 paid by individual Local Health Boards. 

NB: Those in England in the former high band remain so under transitional provisions.  The high band was increased to £151.10 per week in April 2013

Social Services Supported Care

If you do not have sufficient resources and you are assessed as needing to be cared for in a care home, you will receive help from the social services department of your local authority 

Social services only pay up to a “standard” amount 
Often there is a shortfall and families are asked to pay. This is called the Third Party Top Up and should be resisted whilst legal advice is taken. Local Authorities have a duty to pay the full amount if the person is in the most appropriate place to meet ALL their care needs and there is nowhere else cheaper which could adequately meet all their needs.

Much of your income (including £1 per week “tariff” income) for every £250 between £14,250 to £23,250 (England) will go towards your fees. In Wales there is no tariff income. If your capital is below £23,250 in England or £23,750 in Wales the Local Authority take the relevant assessed income towards your fees and pay the rest. Above the capital levels you are self funding. Certain income is disregarded including 50% of your occupational or personal pension providing you pass the other 50% to your spouse or civil partner, if they are not living in the same care home. You must be left with £23.90 for your personal expenses in England and £24.50 in Wales for 2013/14.

Your Home

When the social services work out what you should pay towards your care, how will your property be treated? 

Your property will be disregarded if: - 

Your placement is temporary for up to 52 weeks.  In many cases your placement should be temporary to start with to see how the care home suits you.
Your home is occupied by your spouse, a partner, former partner or civil partner (except an estranged or divorced partner, former partner or civil partner unless they are a lone parent) 
A relative or family member (from a specified list) who is: - 
Aged 60 or over 
Under 16 and a child whom you are liable to maintain 
Incapacitated (someone in receipt of incapacity benefits or has needs which would qualify for such benefits) 

Social Services have discretion to disregard the value of the property if another person, not falling under the above (‘a third party’) continues to live there. It may be reasonable, for example, to disregard a dwelling’s value where it is the sole residence of someone who has given up their own home in order to care for the resident, or where it is the family home and still occupied by an adult “child” who grew up there.

Other assets disregarded include: - 

Capital of £14,250 or less (England) £23,750 (Wales) (2013/14) 
Personal possessions, unless purchased with intention of reducing one’s capital in the assessment. 
Capital value of a life interest in land or trust fund. 
Capital value on an interest in a personal injury trust including compensation for vaccine damage and criminal injuries. 
Skipton Fund payments to people who have been infected with hepatitis C as a result of NHS treatment with blood or blood products. 

How does all this work?

Example

Mr and Mrs Campling live in a manor house in Shropshire. It is worth £2,000,000. The manor house contains antiques and other valuables worth £100,000. Mr Campling is to move into a care home has savings of £10,000 in his sole name. His wife has £100,000 but in her sole name. Mr Campling has a State Pension. His wife has income from the Family Trust.
Mr Campling will be required to use his State Pension towards his care but will retain £23.90 of it for his personal expenses. 

What about co-owned property? 

Perhaps you own a property with your son or daughter. In this case the value of your share may be nil because it is unlikely that anyone will be prepared to purchase your share on the open market. 

Legal advice needs to be obtained and an argument put forward as this is a complex area. 

What about co-owned savings? 

Social services have no power to demand to see the finances of a spouse or partner of someone going into care however, if there is an account in joint names they can see what the spouse has and may be more inclined to ask for a Third Party Top Up.

Deliberate deprivation of capital or income 

If you give away assets or otherwise dispose of them in order to put yourself in a more favourable position to get social services financial assistance with your care home fees, they may be able to assess you as if you still have the assets. 

Example

Mr Jones had £18,000 in a building society. 
8 weeks before entering a residential home he bought his car for £10,500 which he gave to his son shortly before entering the home. 
Is this deliberate deprivation? 
When Mr Jones bought the car he was in good health and had no expectation of going into care. 
He had a serious stroke one week after making the gift. 

This is unlikely to be contested as being a deliberate deprivation in view of all the circumstances.  Great care needs to be exercised when considering gifting your family home.  Legal advice should be sought.

Possible action to consider to prepare for the time when you might need long term care:

Separate jointly owned savings. Did your spouse contribute more to the savings account than you? In those circumstances, it would be proper for you to put more into their account than yours. 

Are you much older than your spouse/partner? Or does one partner suffer ill health that may lead to a need for care? Should you gift some savings to your younger or fitter spouse now? 

Is the house in your sole name? Should it now be put into joint names? 

Review your Wills. If you go into a care home, is it sensible for the Will of your spouse/partner to leave everything to you? It may be appropriate for them to set up a Discretionary Trust so that you can receive capital and income as necessary, but ensure that this is not taken into account in any means test. 

You may need to hold a jointly owned property as Tenants in Common rather than Beneficial Joint Tenants. In the former case, the death of one co-owner does not automatically mean that his or her share passes to the survivor who may already be in a care home, but will pass according to his or her Will.

Have you signed a Power of Attorney in relation to your financial affairs? These documents put in place trusted people who can act for you in your lifetime in relation to your finances and property. If someone loses mental capacity to deal with their finance and property and they have NOT put into place an Enduring Power of Attorney before 30 September 2007 or a Finance and Property Lasting Power of Attorney since 1 October 2007, an application has to be made to the Court of Protection to appoint someone to act on behalf of that person. That person will be called a deputy, and is not necessarily a family member. This is a costly exercise in money, time and emotion and means that the Deputy appointed will act under the directions of the Court of Protection in everything he or she does for you with the consequent cost.

If you have one or more people you trust absolutely it is far better to deal with a Finance and Property LPA now while you have full mental capacity.  This will give you and your family peace of mind and avoid trouble later.  

What about health and welfare decisions?  Since October 2007 it has been possible to sign a Health and Welfare Lasting Power of Attorney appointing trusted people who can make decisions about medical and social care matters when you no longer can.  In the absence of such a document a medical or social care team will make these decisions for you.  The views of close members of your family will be taken into account but will not necessarily be followed. 

The decision of an Attorney under a registered Health and Welfare Lasting Power of Attorney (when you no longer can make these decisions) must be followed by medical or social care professionals unless there are extremely exceptional circumstances.  Powers under a Health and Welfare Lasting Power of Attorney can, if you choose, extend to end of life decisions to prevent you from receiving life sustaining treatment in circumstances that you and the Attorneys will have discussed.

Consider an Advance Medical Decision (‘living will’). In circumstances where you have lost mental capacity and can no longer make choices about treatment to keep you alive, a decision made in advance to the medical profession must be taken into account so long it was made when you understood what you were doing, had been offered sufficient and accurate information to make an informed decision and the circumstances and treatment that subsequently arose are those which were envisaged by you. You must not have been subjected to undue influence or have modified the advance decision either verbally or in writing since it was made. See the SFE leaflet on advance medical decisions.

Please note some medical professionals are reluctant to follow advance decisions because they are unsure:
(1) Whether you had full capacity when you signed it.
(2) Whether you have changed your mind.
(3) If the precise circumstances set out in the Advance Decision exactly matched the circumstances you find yourself in.

If you have both a Health and Welfare LPA extending to end of life decisions and an Advanced Medical Decision in place, the one which is signed last will be the valid one for the purpose of end of life decisions.

Disclaimer 
This Fact Sheet has been prepared to provide you with basic information about paying for care. It is not to be treated as a substitute for getting full and specific advice from a specialist lawyer. Updated September 2014. 

 
 

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Who can I talk to about Who Cares Who Pays? Funding of Long Term Care?

Chartered Legal Executive Nicola Pugh:

nicola.pugh@pcblaw.co.uk

tel: 01694 723818  

Solicitor Pauline Davies:

pauline.davies@pcblaw.co.uk

Tel: 01743 237124

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