Self funding to state funding... confused!!!

[KIM62]

My SIL has been in a nursing home now for nearly three years. She has been self funding from day one. However, her savings are now beginning to reduce drastically, and I estimate that they will be finally used by January 2012 (or as close to).
She claims her state pension, also a private works pension and the low rate AA.
She does own a house that was the family home, that currently my husband (her brother) and I reside in, as we have done for over 2 years. We decided to maintain the upkeep of the property until the housing market was beginning to improve, and also pay for any personal expenses she required (days out, toiletries, plus paid towards £100 a quarter costs for money to cover personal expenses at the N.H. hairdressing chiropody etc) to help so that her savings didn't depreciate too quick.
We know the house will have to eventually go on the market to help fund her costs
(£400 a week), this leaving us in a position to look for somewhere to rent.

So, we know there is a possibility that the state will have to come to her aid.
What we need to know is...
(1)..How much is the maximum limit they will allow her to have in the bank before they will help. (2) Do we have any rights to stay in the family home until we can find suitable property for ourselves to rent. The family home belonged to my husbands parents, but as his mother survived his dad, she left the house to my SIL as she resided in it having never married.
My husband is his sisters only next of kin and therefore is also her deputyship, upon her request
I apologize for this being such a lengthy topic of questions, but if anyone can provide information, I welcome it.
Thank you for your time reading this thread.

 

[jenniferpa]

Hi Kim

When a person is going from self-funding to totally LA funded there is a calculation that come's into play called "tariff income".

What this means is that capital over £14250 up to and including £23250 is used to calculate nominal or tariff weekly income at the rate of £1 per £250. That amout is counted as income (together with any pensions).

This is the example given in CRAG

A resident has £18,100 capital. The £3,850 above £14,250 is counted and a tariff income of £16 is taken into account as income.

As to the house. That's not so straightforward. I don't suppose your husband is over 60? If he was the house might be considered to be a a disregarded asset. I say "might" because CRAG doesn't make clear what the situation is if the family member moved into the house after the person went into care (which I assume happened here). I suspect that it will need to be considered.

Having said that - have you considered paying a market rent for the house? If a house is rented to a tenant then the LA cannot force the sale. This is well outside my comfort zone but I would image that you "might" have a constructive tenancy. I think you should consult CAB at the first instance since even if it's owned by your SIL it doesn't mean you don't, possibly, have rights.

The other thing to consider is that once she does become LA funded and if the house has to be sold, there is a 12 week disregard period that starts at the point they become LA funded to allow time for the house to be sold.

 

[jenniferpa]

Just to clarify as it may not be clear: once she reaches that upper level, she will be expected to pay any pensions etc (but not AA as that will stop) plus this tariff income less her personal expense allowance (currently £22.60 per week), with the LA picking up the rest.

 

[KIM62]

Just a little more information...

Thank you Jennifer for your information. I should have included amounts, to help make it more clear,
My SIL has available cash of £8,500. And the monthly income of pensions of just under £1,200.
My husband is 66, and registered disabled. In reality a bungalow would be more beneficial to us to reside in, so we don't see ourselves long term in this house.
We moved into the house 16 months after SIL went into full time care, reason was the house was standing empty because of the decline of the housing market, and planned to move out within 3 years. Her Will stipulates house to be sold anyway, so no reason to feel settled anyway (sounds harsh I suppose but its the reality of it).

Many thanks for your assistance.
Kim

 

[jenniferpa]

All right - so you're well past the tariff income stage. Have you had any contact with the LA about this? In a sense it would have been to your advantage to have contacted them at the point she reached the upper limit, even though that might have have started the clock ticking on the house sale. It's probably unwise to wait to the point her money runs out though since that could leave you in a difficult situation with the care home. And she's entitled to receive that 12 week disregard (which does not need to be paid back). You're going to have to explain all this very carefully to the LA - it is unusual to allow assets to drop this low without requesting assistance from them so it might be difficult to make them understand.

 

[KIM62]

My husband has contacted Social Services, on Monday, hes suppose to be getting a return call in two week.
He said he will phone again tomorrow, to see if he can get a response.
I will post on here the progress, and hopefully all information will help others too that are dealing with this situation.

Best wishes
Kim