Finding money for care home fees is a worry for many as they, or their loved ones, get older and become less independent. We all accept that social care comes at a cost, but at the same time the prospect of selling your home to pay for care – particularly if another family member or someone close to you lives in it – can be daunting. In this blog, Melinda Giles offers her expertise to families in this very situation.
Selling Your Home to Pay for Care – The Rules
The rules for how a Local Authority can charge for care – and when they can take the value of your property into account – are set out in The Care Act 2014.
If someone needs to be looked after in a care home, the first step is to ensure that a full needs-based assessment is carried out to establish if they’re entitled to funded care. This would be on the basis of their medical requirements. It is not means tested, so their ability to pay is not analysed at this stage.
If, however, their needs don’t qualify for funded medical care (and in some cases this can be challenged – do not always accept an assessment if you’re unsatisfied with the result), then a financial assessment will look at income and capital. This includes looking at any property owned by the person in care.
However, this doesn’t automatically mean that the property must be sold to fund care in these cases. There are specific circumstances in which the value of the property is not considered – when there’s a relative living in the property, for example. On the whole, the law is clear as to where there are exceptions, but there are grey areas where it’s worth exploring the Local Authority’s original assessment.
What Are These Grey Areas?
If a property is jointly owned, there are provisions that ensure that the whole property is not considered in its entirety. Another point of contention can be the valuation – particularly where a charge has been placed on the property. There may even be a dispute with the joint owner.
A charge will only be placed on a property for deferred payment, and with your co-operation and agreement. In instances such as these I would recommend seeking full legal advice. However, it may be worth exploring alternative options beyond the Local Authority placing a charge on your property – particularly now that interest is chargeable from the date of the charge.
Another consideration is the practicalities of selling or charging a property when the owner is the person in care and may not have the capacity to manage the transaction themselves. As the process of obtaining valid Power of Attorney or Deputyship can take considerable time, it’s important to plan ahead before finances have depleted to a level where it becomes necessary.
Very often, families consider whether the property can be kept as an investment and maybe let out to help fund the care. This is possible, but there are various aspects to consider:
- Is the property up to the standard required for lettings?
- What will happen if the tenant moves out?
- The rental income will be subject to tax.
In the event you pursue this route these are essential scenarios to plan for.
Are You Considering Selling Your Home to Pay for Care?
If you are considering selling your home to pay for care home fees, then Giles Wilson’s solicitors will be able to advise you on the best course of action.
Alternatively, view our related services on our website.