Assets and 12 Week Disregard Care Home Fees

[Salli]

County council financial assessment took place this morning for permanent care for mum. She lived in mobile home until last month which I understand is counted as an asset, not a property. It is not in the best condition, but when sold will take her over the limit and she will become self-funding for a while. The assessor was adamant that once the mobile home is sold she will have to repay the fees right back from day one and there is no twelve week disregard. They will make no allowance either for the fact that she has to pay ground rent and standing charge for electricity and water, totalling £136 per month (at present covered by HB) until the unit is sold. Local council are looking into whether HB can continue, but think not as she no longer lives there. When I queried the twelve weeks, I was told by county council that her home is being treated in the same way as they do property abroad. I think this is a bit skewed as if someone owns property abroad, they generally have a permanent home elsewhere. This has been mum's home for 20 odd years, yet she misses out on the 12 weeks and continues to have to pay ground rent out of her savings. I've read through so much online - all the Age Uk, NHS links and other council sites and help pages etc yet cannot find anything to confirm whether this is the norm. Anyone any experience of this?

Her attendance allowance and pension credit will stop from tomorrow (one month up).

 

[Jakkles]

I am a little confused as to why the home is not treated like it was, a home and not an asset!
I would try to appeal the 12 week disregard, it is totally unfair! As for the fees, the debts are your mother's, not yours so no-one can force you to pay her debts.
I know the Citizen's Advice are probably snowed under, but some kind of impartial advice on your unique situation will be needed. My MiL & UiL both get attendance allowance (they did not get it before they went into care, SW suggested we apply for them) and they are in a care home now, along with their pensions (they are self-funding). Dept of Pensions were contacted by hubby and their pensions get put into an account with his name on so he can pay fees etc, they were very helpful.
I am sure someone will be along with more advice, but hope this helps,
Jakkles

 

[nitram]

Have a read through this old thread, it might help somewhat in understanding the situation.

http://forum.alzheimers.org.uk/show...es-and-funding-problems&highlight=mobile home

 

[Salli]

Have a read through this old thread, it might help somewhat in understanding the situation.

http://forum.alzheimers.org.uk/show...es-and-funding-problems&highlight=mobile home

Thanks nitram - I had read that before the assessment and I tried the 'car' comparison, but she was quite adamant that the fees would need repaying from the proceeds whenever it was sold.

 

[hollycat]

http://www.housingcare.org/downloads/kbase/3091.pdf

Just found this information in the link above.

Do not know how factual the sheet/info is but hope it helps.

Bottom of page 5 and top of page 6 talks about park homes.

 

[loveahug]

Hi Salli

All 'things' owned are assets; property, cars, caravans, 'mobile' homes, works of art, premium bonds, savings etc. The mobile home's value is counted as part of the asset valuation, but the LA cannot put a charge on it, the way they could with a house, because that can only happen on something entered on the Land Registry. I've never understood why, you pay ground rent on an apartment, but it's still on the Land registry.

Basically you have to sell everything to pay the fees until the total assets (including savings) drop below the limit (£23,250 now I think?).

As for the 12 week disregards, I understood that the total value of all 'other' assets have to be below the limit in order for the 12 week ruling to apply. So it looks like 'they' are counting the park home as part of the 'other' assets valuation.

You need to go to the CAB, AgeUK or your local Alzheimer's society office for help with fighting this decision.

I hope this helps

Hugs

 

[Mo_N]

Her attendance allowance and pension credit will stop from tomorrow (one month up).

If the LA are stating that your mum is Self Funding her residential care the Attendance Allowance should continue.
It only stops if the LA are part or fully funding care.

There was a previous thread about AA which you might want to look at.

http://forum.alzheimers.org.uk/showthread.php?51528

There was also a previous thread about Pension Credit

http://forum.alzheimers.org.uk/showthread.php?33288

I would suggest you contact DWP to check. I found them very helpful when my mum transferred to a care home after being in hospital & I was getting conflicting advice about her allowances.

Hope you get it sorted out soon.

Mo
x

 

[jenniferpa]

That's an interesting link

This bit in particular seems to relate to this specific situation

Although the value of a park home is taken into account in the financial assessment the owner of such property does not qualify for a deferred payments agreement because park homes are not registered with the Land Registry therefore a charge cannot be placed on them in the same way.

So this explains why the owner of such a property is not entitled to a deferred payment scheme. I suspect that they are therefore extrapolating from that to refuse the 12 week deferred payment agreement. However, this does rather seem to be an attempt to have their cake and eat it to: if it's a home then it's eligible for the 12 week disregard and if it's not it's an asset that does not need to be realised.

To be honest, since you don't want to have to continue paying the ground rent etc, for any longer than necessary, my inclination would be to put it up for sale at a price that would produce a very fast sale. Provided you didn't sell it to a family member or anything the LA would have to accept that that was its value (something is only worth what someone is prepared to pay for it).

I think if you were prepared to dig your heels in they would have to accept the premise that this is like any other chattel and would not need to be sold. However, since it's incurring costs just sitting there you may not want to take this approach.

However, the 12 week disregard I would continue to contest as that's something you can fight about even while disposing of this property.

CRAG talks about "a house or land" but then refers to a dwelling. I imagine there is a legal definition of what constitutes a dwelling so you might want to try to find that. You might look at your local authorities website: if this home was subject to council tax and council tax is only payable on a dwelling, then they can hardly claim now that it isn't.

 

[jenniferpa]

Hi Salli

All 'things' owned are assets; property, cars, caravans, 'mobile' homes, works of art, premium bonds, savings etc. The mobile home's value is counted as part of the asset valuation, but the LA cannot put a charge on it, the way they could with a house, because that can only happen on something entered on the Land Registry. I've never understood why, you pay ground rent on an apartment, but it's still on the Land registry.

Basically you have to sell everything to pay the fees until the total assets (including savings) drop below the limit (£23,250 now I think?).

I just wanted to respond to this: I'm afraid you are incorrect. CRAG specifically states that you do NOT have to sell assets such as cars, jewelry, antiques as they are personal possessions and disregarded indefinitely. The only time when they wouldn't be disregarded is if they were purchased specifically to reduce liquid assets.

 

[Salli]

Thanks hollycat - I do understand that her mobile home isn't classed as property but it's the fact that they are saying she will have to repay all the care home costs from day one. It would make sense if it was from when it was sold as she will then be self funding for a while, but they are basically saying that she has an asset (in her case a mobile home but could be a car, boat or a valuable painting) and she will owe all the back fees because she has this unsold 'chattel'. I suppose me mentioning the 12 week disregard was a bit of a red herring, but it's like they are considering it a dwelling on one hand, but not the other. Are people now having to sell their possessions to pay for care? I don't think so! It's not like it's an investment either because it is going down in value the older it becomes - a wasting asset according to HMRC.

I don't suppose it will make much difference in the long term as either way mum will be passing the money over, but it just seems a bit illogical to do it this way. Maybe it would be best if I try and sell it very quickly (for peanuts) and she be self-funding for a while, rather than hang on, it depreciating in value and costing her money in ground rent, insurance and standing charges.

 

[Salli]

Oops - so long in writing this, that I missed the above replies.....great minds and all that!

 

[hollycat]

Am trying to put myself in your shoes and I would feel like selling the

"""""""""""home""""""""""""

for £1 !

If you wanted to minimise the value of the home, how about an auction ?

Or how about selling it to, we buy any house (if there is such a thing) ?

Then buy the LA a cake and let them eat it ! LOL

On balance, I personally wouldn't wait around for the slow wheels to turn in the LA and would do something myself.

I start the bidding at 0.99p !

I joke with you and in no way at you; what a really difficult position.

 

[Salli]

CRAG talks about "a house or land" but then refers to a dwelling. I imagine there is a legal definition of what constitutes a dwelling so you might want to try to find that. You might look at your local authorities website: if this home was subject to council tax and council tax is only payable on a dwelling, then they can hardly claim now that it isn't.

So many variations of what constitutes a dwelling. For planning purposes it suits councils to say it is not, for council tax it always is and this below from HMRC who seem in conflict with themselves. As the council refuses to call her home a 'park home' or 'mobile home' and refer to it as a caravan, I shall sell it as such for a speedy sale. I do have an eBay account!

 

[nitram]

"...I imagine there is a legal definition of what constitutes a dwelling so you might want to try to find that..."

According to Shelter

"...What is the legal definition of a 'dwelling house'?

Your mobile home may be classed as a 'dwelling house' rather than a mobile home if it is:

static and cannot be moved, or
so large that it cannot be moved in one piece...."

http://england.shelter.org.uk/get_a...rom_mobile_homes/mobile_homes_-_definitions#1

 

[FifiMo]

This is an interesting situation I think. From what I have read on CRAG it would appear that the LA may have shot themselves in the foot. If, for the purposes of CRAG the mobile home is not a Property then obviously deferred payments and 12 week disregard don't then apply, for all the reasons listed about how such items are classed for legal and land registry and also tax purposes too.

So, then you have to look at CRAG and decide well where does it deal with the mobile home then. Only reference would appear to be that it might be a capital asset BUT then such things are not only the list of those items defined as capital assets. You then have to look at what is disregarded and at paragraph 6.030 Which lists items which are disregarded indefinitely, Bullet 5 states "any personal possession such as paintings or antiques unless they were purchased with the intention of reducing capital for the purpose of reducing the LA charge (see paragraph 6.071) Schedule 4 paragraph 8.

Another interesting paragraph about such property is at 6.064 which is about it constituting a deprivation of asset if the property has been given away (not the bit about if it had not been given away it would still be a possession) in this example.

From this alone, it would therefore appear that the mobile home is disregarded. Only at the point of sale (eg when a recognisable asset does come into play - eg a savings account) does the LA then have an interest.

Only questionable area that I can see therefore is whether the LA has the ability to claim that a disregarded asset has been sold at an unreasonable price in order to avoid paying care home fees. It does not indicate that this is necessarily the case and this is backed up by references to such things as Market Value - eg the value of an item is only as high as someone is prepared to pay for it. Don't forget also that you could argue that a low price was accepted because of the ongoing liability to pay ground rent etc at the mobile home's present location - something which is obviously not in the person's best interests as it would impact upon the retained element of their savings.

Anyway, just my input for you to consider and take further advice outside of TP about please...

Fiona

Copy of CRAG 2012 is here for reference: http://www.dh.gov.uk/prod_consum_dh.../@dh/@en/documents/digitalasset/dh_133069.pdf

 

[Salli]

Thank you Fiona - I have spent a lot of time today reading CRAG and found it surprising there is no mention specifically of mobile home if it is considered an asset, especially as it involves other ongoing costs such as ground rent and standing charges. I did in fact enquire today about selling the unit and would LA go down the deprivation of assets route if I sold it to the site owner who would possibly be keen to purchase quickly (and remove) in order to update his park. I know others have sold for 'silly' price to him when they have moved on. The answer was rather vague and I'm not sure if it was deliberately so. I felt a bit cornered by the whole scenario today, especially as I was asked to sign legal document (and have witnessed) a guarantee for payment of fees. I refused as it is nothing to do with my personal finances and as I have POA, really not necessary at all. She backed off when I declined and didn't push it, so I'm wondering how much of everything is exactly as it should be. I will get estate agent valuation before I approach site owner and also wait till I have something confirmed in writing from LA about funding. I think I might fight mum's corner about her being self-funding from day one.

 

[FifiMo]

Hiya Salli,

If it was me, I wouldn't waste my energy fighting the self funding from day one argument, unless of course the LA change their definition of "property" to include mobile homes! The reason I say this is that they will get their money anyway. All that 12 weeks in this scenario would do is defer the point at which you pay full whack. If you were talking about tens of thousands of pounds then it might be worth pursuing but in the circumstances the reality is probably going to be that she will only be self funding for a few weeks anyway before she reaches the upper threshold.

We went through the same arguments with regards to my mother and when she should start paying etc and in the end up I think she was self funding for only 6 weeks! LOL

Only time it might be worth having the fight is if someone is not likely to, say, live for a long period of time and therefore the LA is perhaps setting things up so that they never have to make a contribution but this doesn't seem to be the point in your case does it? It is a sad thing to say but the LA get their pound of flesh eventually, but equally they also have to end up funding the care eventually too.

We don't need to know the specifics of finances on here, but before you go into battle and expend all that energy, work out arithmetically what this would actually mean, given that care home fees are running on average at £3000 a month!

As always, just my own views,

Fiona
x

 

[Salli]

Of course you're right Fiona and I've already told myself not to bother, but then I start thinking about it again and round and round in circles I go. Yes, I will heed your sensible advice - I should pick my battles wisely. Trouble is, I've always fought for what's 'right' and tend to take things to the limit. Time to stop, me thinks!

Only time it might be worth having the fight is if someone is not likely to, say, live for a long period of time and therefore the LA is perhaps setting things up so that they never have to make a contribution but this doesn't seem to be the point in your case does it? It is a sad thing to say but the LA get their pound of flesh eventually, but equally they also have to end up funding the care eventually too.

If the LA are thinking on these lines (mum's 93 this year) they'll likely have a bit of wait as all the women in my family live to 100, dementia or not!