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Part 4: Contributing to the cost of your care
- How is my contribution worked out?
- What happens to my social security benefits?
- Will I have to sell my house?
- How do couples organise paying for care in a care home?
- What if I want to move into a more expensive care home?
- How much spending money will I have when I am living in a care home?
Who will pay the home's fees?
When the social work service arranges for you to move into a care home, it also has to ensure that the care home fees are paid. The social work service will assess how much you can afford to pay towards these costs.
I am only going into a home for a few weeks. Does that make any difference to the way I am charged?
If you are entering a care home for just a short period, the social work service may decide not to make a full assessment of your ability to contribute to the fees. The social work service does not have to make a full assessment of your finances for the first 8 weeks of temporary stay in a home. Instead, you will be asked to pay what the social work service thinks is a reasonable amount. If you are not happy with the amount charged, you can ask for it to be reviewed.
The following paragraphs describe the situation for people entering homes for long periods or permanently.
How much will I be expected to contribute; isn't all care now provided to older people free of charge?
Older people aged 65 and over, who have been assessed as in need of personal care by the social work service, will have the first £153 per week of their care home fees paid for them. The authority will also pay £69 per week towards the care costs of people under and over 65 years who have been assessed as in need of nursing care.
If you are aged 65 or over, and have been assessed as in need of personal and nursing care, you will have the first £222 per week of the care home's fees paid by the social work service. You will only be expected to contribute towards the remaining cost of the care. These remaining care costs, over and above any entitlement to free personal and nursing care, are called the 'hotel' or 'accommodation' costs of the care home.
How is my contribution worked out?
The financial assessment
The social work service will work out how much you can afford to contribute towards the 'hotel' or 'accommodation' costs of the care home by assessing your income, including pensions and social security benefits and any capital you have, including savings, investments or property. This is called the financial assessment of your income and capital.
Your contribution towards these costs will be worked out using nationally set rules. The full rules are too lengthy to be printed in this document, but the main points are covered. Your social work service can provide you with more information on these rules and will also be able to explain them to you. These rules make sure that you can keep some money to pay for your personal expenses.
If you can afford to fund your care home fees entirely from your own resources, you may choose not to request the social work service's assessment of your care needs and finances. However, you would not then be able to receive payments towards personal and nursing care as these benefits are only distributed to those who have been assessed as needing this care. ( See part 5.)
Income
Generally, most of your personal income will be taken into account in deciding how much you should pay. This may include your retirement pension, any occupational pensions you have, and most of any social security benefits you receive. Some types of income have to be ignored by the social work service when making a financial assessment. Other types of income can be ignored, as a whole or in part, at the social work service's discretion.
Where savings and other capital are held in joint names, the social work service will assess your contribution on the basis of your share alone. Arrangements for couples are described in more detail later on in this part.
What will happen to my social security benefits?
Most of the social security benefits that you continue to receive after moving into a care home will be included in the financial assessment for your care. Financial support available towards the cost of your care in the home may affect your entitlement to certain social security benefits.
If you are under 60 and have only a small income, and less than £16,000 in capital, you may be eligible for Income Support ( IS). If you are over 60, you may be eligible for Pension Credit ( PC). If the social work service arranges a place for you, it will normally help you make a claim for IS or PC. Leaflet GL 15, Help if you live in a care home, provides further information about the benefits available to people living in care homes. This leaflet is available from your local social security office or jobcentre plus office. Post offices and libraries may also have a copy.
Moving into a care home may also affect your Attendance Allowance ( AA) or the care component of your Disability Living Allowance ( DLA). It will not affect the mobility component of this benefit.
If you receive financial help from the social work service to pay the care home fees, including any assessed entitlement to free personal care, your AA/ DLA will stop after 4 weeks. (Those who receive free personal care in their own homes will continue to be entitled to these benefits.)
If you want any more information about Pension Credit, IS and any other social security benefits, your local social security office will be able to provide it. Advice on social security benefits is also available from a range of enquiry lines. Full details are available on the DWP website at: http://www.dwp.gov.uk/contact/index.asp
The local authority social work service and relevant voluntary organisations can also help you to claim all the benefits to which you are entitled.
Capital
Capital can include your share of savings, investments and property.
The social work service will ignore all capital up to the value of the lower capital limit. (This limit is £13,750 as of April 2009.) You are free to use these funds as you choose.
If you have capital over the upper capital limit, you may still be entitled to payments for personal and nursing care, but will be expected to pay the remaining charges in full. (The upper capital limit is set at £22,500 as of April 2009.) However, you should let the social work service know when your capital is about to reduce to the upper capital limit.
If you have capital between the lower and upper limits, the social work service will expect you to put some of it towards your care costs. You will be asked to contribute £1 a week for every £250 (or part of £250) that you have over the lower limit.
What if I dispose of my 'capital' before entering a home? (Notional Capital)
If you dispose of capital, for example, if you transfer the title to your property to someone else or make valuable gifts when you know that you will be entering a care home, the social work service may consider that you have done so to avoid contributing towards the cost of your care. It may then assess your finances as if you still possess that capital. Capital which is treated in this way within the financial assessment is known as 'notional capital'.
When deciding if a person who needs care has disposed of capital to avoid meeting the care costs, the social work service will consider when the capital was either given away or disposed of. It would not, however, be reasonable to assume that a person who had been fit and well and could not have foreseen the need to move into a care home at the time when an asset was given away or disposed of had done so to avoid paying for care.
An example of where a person has deprived himself of capital (although not necessarily for the purpose of avoiding paying for care) would include the title deeds of a property being transferred to someone else.
Ultimately, the social work service will decide whether a person has deliberately disposed of capital to avoid paying for care based on the care charging regulations and guidance. If you do not agree with the service's decision, you can complain through its formal complaints procedure. ( See part 6.)
What happens to my house? Will I have to sell it?
If you move permanently to a care home, that will be your new home.
If you own your own home, the social work service will generally consider its estimated value when working out how much capital you have.
The financial assessment must ignore the value of your house if you are entering a home for only a temporary period of care, or if you are intending to move permanently into a care home and any of the following people are living in your house:
- your husband or wife, your civil partner or your unmarried partner;
- a relative who is over 60;
- a relative under 16 (if you have to support him or her);
- a relative who is incapacitated or disabled; or
- a divorced or estranged partner, who is a lone parent with a dependent child.
The social work service can also ignore the value of your house if a person who used to provide care for you (your carer) still lives there having given up their own home to care for you.
If you think your home should be excluded from the financial assessment, you should let the social work service know the reasons.
Selling your home
If you are unable to fund your care from your income or other assets, you may have to sell your home.
The 12-week property disregard and deferred payment schemes can allow eligible residents to choose to delay selling their properties.
The 12-Week Property Disregard
If you have entered a care home and the social work service agrees that you need to stay there permanently, the value of your house will not be taken into account in the financial assessment for the first 12 weeks of your stay only. This is called the 12-week property disregard. This disregard is not relevant if your property is disregarded indefinitely for one of the reasons listed above.
The 12-week property disregard allows residents to decide if they want to continue living in the care home before they sell their own homes. If the majority of your capital is tied up in your property, the social work service will pay more of your care costs for the first 12 weeks of your care. However, after the 12 weeks is over, you will be treated within the financial assessment as having capital worth the value of your house and will be expected to pay your full assessed contribution towards your care costs.
You can benefit from the 12-week property disregard if you have up to the upper capital limit remaining after the value of your house has been disregarded. However, you will still have to contribute from your income during the first 12 weeks of your stay and from any other capital that you have above the lower capital limit. The contribution that you would make towards the care costs in these circumstances will be calculated in the financial assessment.
Deferred payments
It is possible for certain people to delay selling their homes by entering a 'deferred payment agreement'. This agreement enables the local authority to offer to pay part of the resident's assessed contribution to the care home's fees and recover that money later from the resident's estate following his or her death. The resident may also decide to end the agreement and make a full repayment of the amounts owed to the social work service during his or her lifetime.
Interest is not charged on deferred payments until the agreement is terminated by the resident, or 56 days after his or her death.
The social work service should be able to provide you with more details of deferred payment agreements.
How do couples organise paying for care in a care home?
If one partner enters a care home and the other stays in the marital home.
Capital
As noted above, if your spouse or partner continues to live in your home, the value of your share of the house is not included in the financial assessment. After excluding the value of the house, your share of any other capital that you hold jointly with your spouse or partner may be included in the financial assessment.
If your spouse or partner subsequently decides to sell the house and move to smaller accommodation, your 50% share of the proceeds might be taken into account in the financial assessment. However, guidance advises local authorities that it would not be reasonable to take full account of your share if part of these funds is required to enable your spouse or partner to purchase another, smaller home.
Income
Any income that you have in your own right will be assessed individually.
Disregarding 50% of occupational pensions for couples
If you and your spouse or civil partner are not living in the same care home, the social work service will disregard 50% of any occupational pension, personal pension or retirement annuity contract payment that you receive, provided you pass 50% of this income to your spouse.
If you pass less than half of these pensions to your spouse, for whatever reason, then the full amount of the pension will be taken into account within the financial assessment. You will also lose entitlement to the 50% disregard of these pensions if you and your spouse divorce or on the death of your spouse.
Unmarried couples are not entitled to the 50% disregard of a resident's occupational pension. Where the majority of an unmarried couple's income is in a resident's name, the social work service can use its discretion to increase the resident's Personal Expenses Allowance to enable the resident to pass some of this income to the partner remaining at home.
Liable relatives
When the social work service works out how much you can pay for your residential care, only your own resources are considered in the first instance. However, legislation requires that husbands and wives maintain one another. Therefore, if your spouse can afford it, the social work service might ask him or her to contribute towards your care home fees. If this happens, the exact amount of the contribution is for the social work service to decide following discussion with you and your spouse. The social work service can negotiate with your spouse on the level of the liable relative contribution even if your spouse does not wish to supply details of his or her resources. However, the local authority must consider your spouse's individual circumstances when seeking a contribution and must ensure that the liable relative does not experience hardship as a result. If agreement cannot be reached on the level of the contribution, the social work service can ask a court to decide instead.
Unmarried couples are not legally liable to maintain one another even though they live together as husband and wife. Nor do provisions apply to civil partners.
The Scottish Executive has announced its intention to repeal the liable relatives rule and legislation is planned. In the meantime, local authorities are strongly encouraged not to apply the liable relative rule.
If a couple move into a care home
Both you and your partner must have been assessed as needing residential care for you both to receive financial support from the social work service.
If you and your partner have to sell your house in order to pay your assessed contribution towards your care, the proceeds from the sale of the property will be divided equally between you both. Each partner's half share of the proceeds of the house sale will then be assessed as capital within the financial assessment. Again, married partners will have their income assessed individually.
Couples wishing to enter a home together should ask the social work service about any special arrangements that might be made for them.
Will other members of my family have to contribute towards the cost of my care?
Other members of your family are not obliged to pay anything. Sons or daughters are not liable for the costs of their parents' care. A relative may agree to help you fund a more expensive care home place than the social work service usually pays for someone with your care needs. However, these funds cannot be used by the social work service to reduce its own contribution to the fees.
What will the amount paid to the home cover?
The people running your care home should not ask you for any additional money on top of the amount that the social work service has asked you to pay, unless it is for extra services which are not covered by the basic fees. You will, however, continue to receive NHS care from your doctor and other staff, such as your physiotherapist, free of charge.
What if I want to move into a more expensive care home?
A third party can agree to make top-up payments to fund a more expensive care home place than the social work service is prepared to pay for your assessed needs.
The rules also allow some people to make top-up payments from their own resources. However, these should not include any capital or income the local authority has already assessed as being required to contribute towards meeting the care costs.
Top-up payments made after 1 July 2002
Since 1 July 2002, all new top-up arrangements have to be authorised by the social work service, to make sure that you can maintain the extra payments (in addition to your assessed contribution). Where a third party has agreed to make these additional payments on your behalf, the local authority needs to be sure that he or she is both willing and able to continue paying the top-up for as long as you stay in the home. The local authority may ask the third party for a letter to confirm this.
Top-up arrangements made before 1 July 2002
The rules above do not cover top-up arrangements that were in place before 1 July 2002. These additional payments remain private agreements between residents and/or the third parties acting on their behalf, care home providers and, occasionally, local authorities.
The difference between the home's fees and the amount the authority will pay may vary over time. However, the social work service cannot use contributions from you or a third party to reduce its own contribution for the fees.
How will my top-up arrangement be affected if the fees go up?
If the fees of the care home go up, the amount the social work service contributes may not rise. You or your third party will then have to pay more.
What if the third party stops paying the top-up?
If the social work service has arranged a place in the home for you on the understanding that someone will pay part of the costs and those extra contributions stop, unfortunately it may not be able to keep you in the same home. You should talk to your social work service straight away if you think this might happen.
Are there different rules for calculating how much I pay for care in a home run by a private or voluntary organisation or the social work service?
No. The rules for calculating your contribution are exactly the same.
The social work service will tell you how much you need to pay. It will also tell you if the amount changes. You should tell them if your financial circumstances change.
Will I pay the local authority or the care home?
You may be asked to pay the local authority social work service directly. Equally, the social work service may ask you to pay the same amount to the care home direct. This will only happen if you and your care home both agree. The amount you pay is the same either way.
How much spending money will I have when I am living in a home?
If you receive help with the costs of all aspects of your care, the social work service will leave you with a Personal Expenses Allowance to let you purchase small personal items. (This Allowance is £21.90 per week as of April 2009.) You should not be asked to contribute towards the cost of your care from your Personal Expenses Allowance. The social work service can decide to increase the amount of this allowance in special circumstances, for example, if you have a husband or wife who relies on your income. You should discuss this with your social work service.
In addition to the Personal Expenses Allowance, you will also have any income that has been ignored in the financial assessment. You can also use any capital that you have, up to the lower capital limit, as you choose.
Savings Disregard
The Savings Disregard allows eligible residents with income over state pension levels, who are aged 65 and over, to retain an assessed amount of their income on top of their Personal Expenses Allowance. The Savings Disregard is up to £5.65 per week for individuals and up to £8.45 per week for couples as of April 2009.
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