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At Swansea Legal Solutions, our customers often ask how they can protect their home from care fees and whether a property counts towards the means test carried out by the local authority. So to help you understand the options, our specialist team has come up with these guidelines to help you make considered decisions about the future of your property.
Financial Assessment for Care Fees
When someone goes into care, the local authority will carry out a financial assessment which will include calculating the cost of the care and how much the individual can contribute from their own resources. When carrying out this assessment, in other words a means test, the local authority may consider the value of the property as well as any income, savings or pension you may have.
It’s important to note that the Care and Support (Charging and Assessment of Resources) Regulations 2014, Schedule 2, Regulation 4 states that “A local authority may disregard the value of any premises which is occupied in whole or in part by a qualifying relative of the adult as their main or only home where the qualifying relative occupied the premises after the date on which the adult was first provided with accommodation in a care home under the Act.”
In this context, a qualifying relative is defined as a spouse/civil partner, partner, former partner, the person’s minor child, or a relative who is over 60 or incapacitated.
When it comes to savings, according to the Welsh Government website, If you have capital over £50,000 you may have to pay the full cost of your residential care. If your capital is at or below this limit, the local authority will help pay for your residential care. How much you pay towards this care will be calculated from your eligible income, such as pensions or welfare benefits.
Protecting Your Home from Care Fees
Our advice to couples who own their own property is often to include protection against care home fees in their wills of both parties through a life interest trust’
If, after the death of one of the couple, the survivor has to go into residential or nursing care, the half share of the house belonging to the first to die will not be taken into account for the purposes of assessment for state support for the survivor. However long is spent in nursing or residential care by the survivor, the half share of the proceeds of sale of the house belonging to the first to die will still be preserved and will not be lost to care home fees.
This arrangement does not amount to a deliberate deprivation of assets because the person receiving care has not given anything away.
However, giving away assets (including placing them into trust) with any intention of avoiding care home fees is referred to as a ‘deliberate deprivation of assets’. This means that the local authority will assess your assets as if they still included the assets given away. Unlike gifts taken into account for inheritance tax, there is no time limit as to how far back your local authority can enquire when assessing financial eligibility for care funding.
Swansea Legal Solutions
At Swansea Legal Solutions, we offer a comprehensive service to our customers which includes will writing, setting up trusts and, importantly, setting up Lasting Powers of Attorney too. To find out more about these services and to book an appointment, click here or call us today on 01792 402844.
