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Sunday, 30 October 2011

Your home, assets and care home fees

You don’t always have to sell your home or assets to pay for care home fees – find out what the alternatives are. Also, find out how the local council assesses what you should pay towards your care home fees.

How your contribution to your care home fees is assessed

If you live in England and have over £23,000, your local council will assess you as able to pay all your care home fees. The money you have is called 'capital' and could be savings, investments or property, which may include the value of your home. In Wales, the limit is £22,000.

Find out how the local council assesses whether you should pay all your care home fees by following the link below.

Assessing care home fees for home owners

If you move into a care home permanently, the local council may count your home as capital from 12 weeks after you arrive there. However, your home won't be counted as capital if any of the following people still live there:

  • your husband, wife, civil partner or someone you live with as a partner
  • a close relative who is 60 or over, or incapacitated
  • one of your children (including adopted children) who is under 18
  • your ex-husband, ex-wife, ex-civil partner or ex-partner if they are a single parent

Your local council may choose not to count your home as capital if your carer lives there.

Your home and temporary stays in care

If you go into a care home temporarily, you won't have a financial assessment for the first eight weeks of your stay. The local council will say what they think is a fair amount for you to pay for this time.

If your stay lasts longer than eight weeks, the local council will assess what you should pay from week nine onwards. Your home won't be counted as capital because your stay is temporary.

Find out about paying for a temporary stay in a care home by following the link below.

Keeping your home and assets

You may want to avoid selling your home to pay for care home fees so that you can move back if your condition improves.

Making a 'deferred payments agreement' with your local council

The local council may make a deferred payments agreement with you:

  • to try to avoid the sale of your home to pay care home fees during your lifetime
  • if you have to pay all your care home fees because your home is counted as capital
  • if you don’t have enough other capital or income to pay the fees

The agreement means your local council calculates what you should pay towards care home fees on the basis your home isn’t counted as capital.

The council keeps a record of the difference between this amount and what you would have to pay if your home was counted as capital. You’ll still owe this amount but it will only be collected at a date you choose or when you die. The council will collect what you owe from the amount received for selling your home or from whoever inherits your property.

Setting up a family trust

Setting up a family trust is one way of transferring the ownership of your home or other assets to someone else while you're still alive. You should get advice from a solicitor on this because the law on trusts is complicated.

Giving money or property to other people

You may choose to give money or assets to relatives. There is no limit on the value of these gifts, but your relatives may have to pay tax on any interest or income they receive.

If you give money or assets to someone within the seven years before you die, Inheritance Tax may be owed on your gift.

Trying to avoid care home fee payments

Sometimes people deliberately transfer ownership of their assets to someone else in order to reduce what they pay in care home fees. If the local council believes this has happened they may assess you differently than in the normal assessment procedure:

  • if assets were transferred within the six months before you moved into care, the council can recover the cost of your stay from whoever received the gift
  • if the transfer happened more than six months before you moved into care, they can assess you as if you still own the assets 

There's no time limit on how far back the council can look to find out if you gave away assets to avoid care costs.

Renting out your home

One alternative to selling your home may be to rent it out and use the money to pay your care home fees.

Making a will

Before you move into a care home permanently, you should make a will.

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