Care Cost Planning
Residential Care - thinking ahead
Speak to our For Life team
It is never too early to start planning for the future.
Our team can help guide you through the current residential care regime and provide you with advice and options as to how best to protect your future and your assets.
Taking the decision for yourself or for loved ones to go into residential care is something that increasing numbers of us are having to come to terms with, and it can be a stressful and emotional time. However, having an understanding early on of what is involved gives a degree of certainty that can prove comforting.
What financial help is there?
Many people are concerned in particular about how residential care will be financed. You may either be assessed as being “self-funded” or “Local Authority funded” depending on your assets. Every person in Scotland who is assessed by their local Council as needing personal and/or nursing care in a care home is entitled to an allowance from the Government. Over and above these allowances, most people in Scotland will have to contribute to the cost of their care in some way and Local Authorities follow the Charging for Residential Accommodation Guide (CRAG) produced by the Scottish Government to help them assess what level of contribution an individual will have to make. Our team can provide you with up-to-date information in this regard.
As regards to your income, most types of income will be taken into account in any financial assessment of a person’s liability to pay for their care. This could include State Pension and Pension Credit, as well as any income from investments, annuities, or from the lease of the person’s home. An occupational pension is also included but the person requiring care is entitled to give half of this to a spouse remaining at home and that half will be ignored.
Your capital and the family home
In many cases a person’s income will not be sufficient to cover the cost and, depending on the amount of capital they have, they will be expected to use some of this to pay for their care. As with income, most types of capital will be included in the financial assessment, including bank accounts, stocks and shares, and property. The contribution that the person must make will depend on how much capital they have and, again, the levels change from year to year.
Some capital is completely ignored (disregarded) in the Council’s financial assessment and this includes life policies – but only if these were not set up to avoid having to pay for care. The value of the family home is also disregarded if it continues to be occupied by, for example, a spouse, or a relative over 60 or under 16. The Council has the power to disregard the value of the property even if it is occupied by someone else if they think that is appropriate. It is only the share of the property belonging to the person needing care that is taken into account. For example, if they own half of the property and the other half is owned by their child, it is only their own half that forms part of the assessment.
It should be noted that the Local Authority can decide that somebody has given away their money or property in order that they can get more Government help to pay for their care and this is called “deliberate deprivation”. The Council looks at the circumstances surrounding the gift, including when the gift was made, to help them decide whether this was the most significant reason for the transfer. If they believe that deliberate deprivation has occurred then, although the Council is still under an obligation to provide care, they may seek to recover the cost of this from the care home resident.
There is legislation in place which entitles Local Authorities to recover these funds if the person made the gift less than 6 months before they went into care. However, even if the transfer happened more than 6 months before, the Council can still say that deliberate deprivation has taken place and attempt to recover the cost of providing the care as there are no statutory time limits.
There is no doubt that this is a complex area and early planning is essential. If you would like to find out more, please contact a Solicitor from our Private Client Team who will be more than happy to meet with you at any of our Offices.