Assets

[6FNAUTICLUB]

Hi

I've discussed this before but we are still getting mixed reports as to what happens when assets are down to £23250.00.

We were under the impression that this figure was just cash in the bank but have now been told that the local authority include your property in that figure so that if you have cash plus a property, which will be our situation, the local authority will not help. I know each local authority is different and I have tried speaking to the LA but they won't even discuss/assess until we are at the £23250.00 cash level.

Who can we speak to as to what is the best option going forward - we are now thinking that even though we never wanted to sell the family home, it's looking like we will have no choice but to do that and if that is the case, then we may aswell do. It sooner rather than later, to have money in the Bsnk to pay for Mums care for as long as we can.

Mum is 87 this year, has Alzheimer's and vascular dementia and went into Care voluntarily and has been in for 12 months, is very happy there and self funding at £800 per week.

Thsnks

 

[Shedrech]

hi 6FNAUTICLUB
the catch is whether or not the PWD or their spouse is still living in the marital home
you say your mum has moved into a care home, and don't mention a spouse still living in their house, therefore the house is counted as one of her assets as she owns it
it can be sold, or rented out or the LA may agree to put a charge on it (can't remember the official jargon); whatever is chosen, it is now an asset she no longer lives in so is 'available' to her to fund her care, making her a self-funder
I've made some assumptions here, and that's my understanding of how the financial assessment works
have a look here, esp at the key points
https://www.alzheimers.org.uk/info/20032/legal_and_financial/96/paying_for_care/6

Capital refers to any other assets the person has. This includes savings, investments and, in some cases (for residential care), may include the value of their home.

 

[Kevinl]

Assets are cash in the bank, stocks, shares, premium bonds anything with a cash value other than some personal possessions so yes a house is an asset provided it's not mandatory disregarded. If a partner, child, certain relatives live there it is disregarded otherwise it is an asset.
LA's don't vary in this respect a house is an asset, it's national law as per the 2014 care act and prior to that the CRAC regulations, I don't know how your getting "mixed reports" it's been that way for a long time under current and previous legislation.
K

 

[HillyBilly]

I think you rented your Mum's house out last year? As no spouse or other dependant relative is living there, the house counts as your Mum's asset (I assume it's in her name) so has to be sold and the proceeds go in to her pot, to top it up again. Then once her cash assets are back down to the upper limit, the LA will step in to help.
You will need POA in order to sell it on her behalf if your Mum doesn't have capacity.

 

[6FNAUTICLUB]

Assets are cash in the bank, stocks, shares, premium bonds anything with a cash value other than some personal possessions so yes a house is an asset provided it's not mandatory disregarded. If a partner, child, certain relatives live there it is disregarded otherwise it is an asset.
LA's don't vary in this respect a house is an asset, it's national law as per the 2014 care act and prior to that the CRAC regulations, I don't know how your getting "mixed reports" it's been that way for a long time under current and previous legislation.
K

Mixed reports in so much - some are saying LA will register a charge on property once Mums funds are down so we don't have to sell until Mum passes - some say LA will force us to sell to put money in her pot and once all that is gone then we can ask for help

 

[6FNAUTICLUB]

I think you rented your Mum's house out last year? As no spouse or other dependant relative is living there, the house counts as your Mum's asset (I assume it's in her name) so has to be sold and the proceeds go in to her pot, to top it up again. Then once her cash assets are back down to the upper limit, the LA will step in to help.
You will need POA in order to sell it on her behalf if your Mum doesn't have capacity.

Hi, yes we have rented it out, had a few problems with tenants which has made us think, ultimately house has to be sold to pay for care so may aswell sell it sooner rather than later. We have an active POA.

 

[Kevinl]

Mixed reports in so much - some are saying LA will register a charge on property once Mums funds are down so we don't have to sell until Mum passes - some say LA will force us to sell to put money in her pot and once all that is gone then we can ask for help

The LA can offer you a Deferred Payment Scheme where (for a fee plus interest) they will pay the fees and recover the money after your mum passes, however, where properties are rented out particularly if it's a long lease then they may be reluctant to do so as they could end up waiting until the end of the lease and the house is sold before they get their money back.
K

 

[Chemmy]

From the government website

Since April 2015, deferred payment agreements have been available from all councils across England.
A deferred payment agreement is an arrangement with the council that enables people to use the value of their homes to help pay care home costs. If you are eligible, the council will help to pay your care home bills on your behalf. You can delay repaying the council until you choose to sell your home, or until after your death.

Deferred payment agreements will suit some people’s circumstances better than others’ and not everyone will be eligible. You should be eligible for a deferred payment agreement if:

you are receiving care in a care home (or you are going to move into one soon)

you own your own home (unless your partner or certain others live there)

you have savings and investments of less than £23,250 (not including the value of your home or your pension pot)

https://www.gov.uk/government/publi...hats-changing/care-and-support-whats-changing

More info available there.

 

[6FNAUTICLUB]

From the government website





https://www.gov.uk/government/publi...hats-changing/care-and-support-whats-changing

More info available there.

Thank you x

 

[Pete R]

...........ultimately house has to be sold to pay for care so may aswell sell it sooner rather than later. We have an active POA.

Not necessarily, it all depends what you/other family members want from your Mums house.

If it is just a capital asset to you then maybe to sell is a good option but if it is more of a home that maybe you or someone else wants to eventually live in then a DPA could be a good idea.

The DPA has to be repaid on death but the debt can be paid from any means so does not mean the house has to be sold.

 

[canary]

The DPA has to be repaid on death but the debt can be paid from any means so does not mean the house has to be sold.

I know that this is true, but i always wondered how else the debt could be paid if the house isnt sold.

 

[nitram]

"I know that this is true, but i always wondered how else the debt could be paid if the house isnt sold."

Somebody inherits the house and has sufficient capital to pay off the debt accrued from residential care. Alternatively they may be able to pay the debt by getting a loan secured on the house.

 

[Kevinl]

How would a DPA work in this scenario?
Three siblings know they're going to inherit a house equally, one moves in and so has to pay the market rate in rent to the parent in care. They then take out a DPA to cover the difference between the rent and the cost of care which could easily be many hundreds of pounds.
The parent lives for years and the DPA swallows nearly all the value of the house.
The one doing the renting could end up having to sell the house anyway as they can no longer afford to pay off the DPA.
Let's say me and my 2 brothers are going to inherit a £300k house equally. I move in with a view to buying when the parent passes, however, the DPA swallows up £200k of the value of the house so my inheritance is only £33k leaving my to pay off £266k for the DPA and my siblings share of the house.
It seems like a very uncertain position to put myself in to me.
K

 

[sue38]

How would a DPA work in this scenario?
Three siblings know they're going to inherit a house equally, one moves in and so has to pay the market rate in rent to the parent in care. They then take out a DPA to cover the difference between the rent and the cost of care which could easily be many hundreds of pounds.
The parent lives for years and the DPA swallows nearly all the value of the house.
The one doing the renting could end up having to sell the house anyway as they can no longer afford to pay off the DPA.
Let's say me and my 2 brothers are going to inherit a £300k house equally. I move in with a view to buying when the parent passes, however, the DPA swallows up £200k of the value of the house so my inheritance is only £33k leaving my to pay off £266k for the DPA and my siblings share of the house.
It seems like a very uncertain position to put myself in to me.
K

I don't see that you're necessarily in any worse a position. If you decide not to rent and sell the property then the capital will possibly be swallowed up at a faster rate. The rent on a £300k house would be a better yield than investing the net proceeds I would have thought, giving the parent more income and therefore less need to top up from capital. It may depend on what rate of interest, if any, the council charge on the DPA as to whether it makes financial sense. If you're left with £33k in either situation you still have to find £266k to buy a £300k house.

 

[Pete R]

I know that this is true, but i always wondered how else the debt could be paid if the house isnt sold.

If the person in care lives for a long time then obviously it is going to be more difficult as the amount rises. However with the average time in care being around 2-3 years it does become more viable.

A couple of examples that I know of….

Parent in NH. Always been the family intention that daughter & her family on inheritance would sell their own home and move in. As their current home is smaller and of less value they do not wish to move immediately as parent may need all/majority of the capital for care. On death they sell and are able to pay off the DPA.

Sibling sells own home and moves in with parent who needs help at home. Eventually parent has to go into NH and the sibling does not qualify for a Property Disregard. DPA is arranged and then again depends on how long parent lives if sibling has enough capital to repay the DPA on death.

 

[Witzend]

If the person in care lives for a long time then obviously it is going to be more difficult as the amount rises. However with the average time in care being around 2-3 years it does become more viable.

The trouble is that it's impossible to tell.
My mother was 89 when she finally went into residential care.
Her family had generally been pretty long lived, but even so, none of them had made it past the very late 80s.
My mother was in her care home for very nearly 8 years.
I know she was unusual, though. During her time in the CH I saw so many other residents arrive, decline, and go.

 

[Pete R]

The trouble is that it's impossible to tell.

I agree but that is why a DPA may be a good idea for some as it gives you the time, which could be years, to make a final decision rather than selling the house on day one, PWD dying fairly soon afterwards and there being no means to go back.