Q: My neighbour went into a care home last year. His daughter told me yesterday that she now has to sell her dad’s home to pay for his care fees. Surely this can’t be right? My neighbour worked all his life and has paid taxes and National Insurance since he was 16.
A: Your neighbour’s daughter is probably right. When someone goes into a care home, the Local Authority work out how much they have to pay towards their fees. This depends on how much money they have coming in from pensions etc and also how much capital or savings they have. If they have capital worth more than £23,250 in total (and this includes a house) they have to pay the full rate of care fees which are currently between £2-3,000 every month. From what you say, it looks as if your neighbour’s savings have been used up and the house will have to be sold to meet the continuing fees.
Q: That doesn’t seem very fair to me. My parents are getting on a bit and own their own home. Could the same happen to them?
A: If either or both of your parents go into a home, the Local Authority will work out how much they have to pay towards their fees. If only one of your parents goes into a home, the Local Authority won’t take account of the value of the house while the other is still living in it (although they will take savings into account), but if the other then dies or needs care themselves, the value of the house will be taken into account and it may need to be sold to meet fees.
Q: Can’t my parents just sign the house over to me and my brother and get round the problem that way?
A: No. If someone gives their house away with the intention of avoiding care fees, the Local Authority can treat this as ‘deprivation of capital’ and the fees of the person who has signed the house over are calculated as if they still own the house.
Q: But surely there is something that can be done? My parents scrimped and saved when they were younger to get a house that they could leave to their children, and now it looks as if it could be taken off them?
A: It is possible to protect assets, but this needs to be done in good time. By planning early, it is possible for your parents to make provision for whatever the future holds without being forced to sell their home.
If your parents are interested in protecting their assets they need to make an appointment to see someone with specialist knowledge of what to do. At Poole Townsend we have a team of experts who deal with the above situation. Telephone Kelly Wilson on 402241 for a free appointment without obligation to discuss the options.
