Care Act 2014 vs CRAG regarding Tenants in Common and bully-boy LA tactics

[paulh]

Hi,

It's been a while since I posted here regarding social services strongly pushing for my mum to be admitted into a care home (Paranoia or do LAs really try to push people into full time care to save costs?).

Well, my mum has now been admitted into full-time care, the means test has been completed and she has been assessed as being a self-funder (what a surprise). This was the meaning of my previous thread, since my mum was only paying a fraction of her care costs when she was living at home. She will now need to pay the full cost of her care, now that she is living in a care home.

Over five years ago, my parents severed the joint tenancy of their house to that of tenants in common, with me named as the beneficiary. My dad died in 2012 and his half share was then held in trust for me according to his Will. My mum continued to live in the house until the middle of last year whereby she was admitted into full-time care, after the matter being pushed through by one particularly enthusiastic social worker.

The house has now been valued and the LA now considers that my mum has 50% of this valuation at her disposal for use as care fees, even though the house is not for sale as I would like to move back there at some stage, after it has been renovated.

Under the Charging for Residential Accomodation Guide (CRAG), clauses 7.017 - 7.019 indicate that the value of a half share of a house could be nil, since it would be unlikely that any outsider would be willing to buy into the property. However, since April 2015, the new statutory guidance under the Care Act 2014 (CA2014) replaced CRAG.

The questions are:

- is it really true that under CA2014, the LA has the right to assume that a straight 50% of this valuation is possible to use, even though the house is not for sale therefore this value will not be realised? Is it nowadays possible to agree a much lower percentage with the LA, to limit the care costs, even if it can't generally be argued nowadays that my mum's half share value is nil as under CRAG?

- the LA are now pressuring me to make a deferred payment agreement, whereby they can make a charge on the property, subject to it being sold, to recoup their costs on my mum's death. In the previous email exchange with them, I was given 14 days to arrange this with them, or they will give 4 weeks notice to the care home, from which time we will have to contract directly with the care home (What would happen then, would the care home throw my mum on the streets if we don't make a contract with them directly?) If we do make a contract with them, this will effectively almost double the costs of my mum's care, since the LA pays far less for care than a private individual would, who liases directly with the home. The question is, is this even legal to effectively wash their hands of my mum's case or are these just scare tactics designed to make us agree to the deferred payment scheme? It was after all, their social worker who effectively forced my mum to go into full-time care in the first place.

- is it true that the LA can force the sale of the property after a deferred agreement has been set up, to recoup their costs after my mum's death, even though I have no plans to sell it?

Any advice, views and opinions would be most welcome.

 

[nitram]

As I see it they are saying that if you don't agree to sell the house (within a certain timescale?) so that they can put a charge on it they will stop funding your mum's care.

I don't see how they can set up a deferred payment agreement until the house has been sold.

You say that a trust is involved in your ownership of your share of the house, the exact wording of this trust could be important.

What part of the LA are making the statement that they would stop funding, financial, legal, or social services? If it's social services I would contact financial or legal and ask for full details of the proposal.

You are going to need specialist legal help.

 

[Pete R]

Hi Paul,

There have been quite a few posts on this lately. Have a look at the Finance and Legal Forum to get some more insight.

On this forum before April 2015 the tenants in common route was widely discussed and offered as a way of getting a property disregarded. I would imagine that it was also discussed by those that drew up The New Care Act and was probably decided that some people were using it as a way of avoiding care home costs and the system should change. However the actual reason has not been stated in any guidance notes and until someone challenges it in a court, and wins, I believe the change is a deliberate one. Others on here are not so certain.

Over five years ago, my parents severed the joint tenancy of their house to that of tenants in common, with me named as the beneficiary.

The house has now been valued and the LA now considers that my mum has 50% of this valuation at her disposal for use as care fees, even though the house is not for sale as I would like to move back there at some stage, after it has been renovated.

I am no fan of LA's but I do believe they are correct. I am surprised that they haven't gone further and challenged the change of tenancy especially if it could have been anticipated that your Mum would have needed care at that time.

- is it really true that under CA2014, the LA has the right to assume that a straight 50% of this valuation is possible to use, even though the house is not for sale therefore this value will not be realised? Is it nowadays possible to agree a much lower percentage with the LA, to limit the care costs,

I do believe that is now the case although your Mum/PoA has to agree to the valuation. The guidance does allow for discussion. If no agreement then LA can take the matter to court or (this is actually in the guidance) decide that they have fulfilled their obligations and leave you to it.

- the LA are now pressuring me to make a deferred payment agreement, whereby they can make a charge on the property, subject to it being sold, to recoup their costs on my mum's death.

The LA cannot pressure you into a DPA. It really is of no benefit to them even though they can make charges and pay interest. All owners have to agree to a DPA as there is a legal charge placed on the house so either you or your Mum/PoA can refuse.

If you went for the DPA then there is no requirement to sell the house on death. The debt to the LA can be repaid from any means so if you wanted to keep the house you can find other funding. The guidance states 90 days to repay although again this is open to discussion but again the LA can resort to the courts to force a sale.

In the previous email exchange with them, I was given 14 days to arrange this with them, or they will give 4 weeks notice to the care home, from which time we will have to contract directly with the care home (What would happen then, would the care home throw my mum on the streets if we don't make a contract with them directly?) If we do make a contract with them, this will effectively almost double the costs of my mum's care, since the LA pays far less for care than a private individual would, who liases directly with the home. The question is, is this even legal to effectively wash their hands of my mum's case or are these just scare tactics designed to make us agree to the deferred payment scheme?

As I said above the LA cannot force you into a DPA so if they feel they have legally done all they can to facilitate an agreement they can leave you to it. That appears to be what they are saying in those emails. Again you would have to challenge their decision through the normal complaints process and then court.

It was after all, their social worker who effectively forced my mum to go into full-time care in the first place..

I agree that it is cheaper for the LA to move someone with property into a CH and it definitely goes against the principles of The New Care Act. However someone with assets can effectively do whatever they/PoA want. They did not have to agree.




Whatever way I phrase this it will not read good to you and I make no apologies.....I see no reason why your Mum would be "thrown on the streets" even if the LA do back away. Do not forget that until her death she still owns 50% of her former home. Why should those assets not be used to fund her care?


I do hope this helps.

 

[Pete R]

I don't see how they can set up a deferred payment agreement until the house has been sold.

The idea of a DPA is that the house does not have to be sold. You cannot set up a DPA without an asset to guarantee its repayment. If the house had already been sold the 50% value would already make the Mother a self funder.

 

[garnuft]

urrgghhh!!!

These posts always make me thoroughly miserable.

Your Mum owns half a house, liquidise her assets and she has enough money to pay for her own care...everybody pays for their own care.

Even poor folk with no assets have to hand over their total income and they are allowed the grand sum of £24.90 each week...pocket money that's meant to buy all their toiletries, clothes, haircuts, chiropodist fees...outings if they're lucky enough to need or want them.

If you don't want to sell the house...buy your Mum out and release funds to her that will mean she feels the benefit of her 'rainy day' money.

 

[LYN T]

Gwen, I do agree with you.

Terrible to think of someone not being allowed to have the benefit of their hard work in owning a home. Apart from the moral issue who would want to be concerned with finding a Solicitor to fight their corner-better to use their energy in making sure their parent is comfortable.

My Daughter (who denies having left wing leanings) always says to me that my money and property is to give me comfort in my old age (I'm not 'old' at the moment but will be one day) She says that she and hubs will make their own fortune. She's also mighty glad that I've told her that if I get like Pete she should find me a nice care home She saw too much when Pete was still with me.

I love my daughter so I don't want her having stress in looking after me if I become ill. She wouldn't cope anyway-and why should she. All she needs to do is make sure any animals I have are looked after and my eyebrows are kept in control

The love I feel for her has a trade off; if that means spending her inheritance to make her life more comfortable-well so be it,

Love

Lyn T XX

 

[Beate]

I kind of have to agree. What you want to do with a house that currently is only half yours, is irrelevant. The other half belongs to your Mum, and while I understand that you'd like to preserve your inheritance, care has to be paid for if the means are there. Sell it or enter into a DPA and upon your mother's death, repay the care costs with other money, then you get to keep the house. Aren't you living abroad anyway? To be honest, I don't subscribe to your conspiracy theory - social services usually try to keep people at home but must have found a care home the best solution here. If you were so keen to keep her at home, what would have stopped you from paying for additional care? Isn't what's best for your Mum absolutely paramount, at whatever cost? Or are you just annoyed because a care home is more expensive?

 

[paulh]

urrgghhh!!!

These posts always make me thoroughly miserable.

Your Mum owns half a house, liquidise her assets and she has enough money to pay for her own care...everybody pays for their own care.

Hi,

This is one thing on which I completely disagree. I don't believe that people, who have paid into the system all their lives should pay for their own care.

This might seem an old fashioned point of view although my mum and dad worked all their lives and diligently paid their taxes like model citizens (about 90 years worth of tax paid between them!). My dad conveniently died before he had any care needs, although my mum would now need a little bit of that tax back in the form of care funding without having to use her one and only asset.

 

[garnuft]

urrgghhh!!!

These posts always make me thoroughly miserable.

Your Mum owns half a house, liquidise her assets and she has enough money to pay for her own care...everybody pays for their own care.

Hi,

This is one thing on which I completely disagree. I don't believe that people, who have paid into the system all their lives should pay for their own care.

This might seem an old fashioned point of view although my mum and dad worked all their lives and diligently paid their taxes like model citizens (about 90 years worth of tax paid between them!). My dad conveniently died before he had any care needs, although my mum would now need a little bit of that tax back in the form of care funding without having to use her one and only asset.

But taxes aren't just personal payment schemes...even if they were...education, health care, defence, infrastructure...all paid for by the taxpayer.

My Mother diligently paid her taxes...worked all her life...until she was 76, in fact.
My father paid taxes from 15 years old until he died at 66.

How much does ONE hospital visit cost the State?

How much does ONE year of schooling cost the State?

How much does one pregnancy, ante natal, birth, post natal care, health visitor...cost the State?

Pensions...free bus passes, winter fuel allowance, free TV licence.

Paid taxes????

We've NONE of us paid enough.

 

[Pete R]

Hi,

This is one thing on which I completely disagree. I don't believe that people, who have paid into the system all their lives should pay for their own care.

This might seem an old fashioned point of view although my mum and dad worked all their lives and diligently paid their taxes like model citizens (about 90 years worth of tax paid between them!). My dad conveniently died before he had any care needs, although my mum would now need a little bit of that tax back in the form of care funding without having to use her one and only asset.

I do not think the system is anywhere near good enough. The "state" are imposing a tax on people (without having told them they would) that saved, bought a house or invested in a private pension

It is deemed that a person can live on a state pension/benefits therefore a CH should not cost the individual any more than that amount. Any savings/asset should go towards enhancing that care not subsidising tax. I am all for paying more tax for this purpose.

Unfortunately Paul your post comes across as you want to protect an inheritance. Now I have no problem with this, people should be free to spend their hard earned money as they see fit. If that is what your Mum wanted and would be happy in a LA basic (no disrespect to those that do) home then fine.

However the current rules do not allow it. This I believe is wrong.

 

[Pickles53]

Gwen, I do agree with you.

Terrible to think of someone not being allowed to have the benefit of their hard work in owning a home. Apart from the moral issue who would want to be concerned with finding a Solicitor to fight their corner-better to use their energy in making sure their parent is comfortable.

My Daughter (who denies having left wing leanings) always says to me that my money and property is to give me comfort in my old age (I'm not 'old' at the moment but will be one day) She says that she and hubs will make their own fortune. She's also mighty glad that I've told her that if I get like Pete she should find me a nice care home She saw too much when Pete was still with me.

I love my daughter so I don't want her having stress in looking after me if I become ill. She wouldn't cope anyway-and why should she. All she needs to do is make sure any animals I have are looked after and my eyebrows are kept in control

The love I feel for her has a trade off; if that means spending her inheritance to make her life more comfortable-well so be it,

Love

Lyn T XX

LynT you put this so well and I totally identify with what you say (and with Garnuft). Most of us have absolutely no idea of the cost of providing the services we take for granted every day. My 2-year old grandson has probably already cost the NHS more than his parents have contributed in tax/NI and his problems are minor compared to many.

Why save for a rainy day if when the monsoon of dementia arrives you don't then take advantage of it? As a self-funder you have far more choice about care and that's worth a lot. You can spend your energy and time with your mum instead of arguing with the LA.

 

[LYN T]

Pickles, my 6 year old grandson also has health issues (they will be lifelong) so he is going to be expensive too!!!!

To be honest when I read of the struggles of Carers who are desperate to keep their parents safe BUT they have to struggle with LA's to get the residential help they need -well my blood runs cold. I'm talking about people with no assets/property. So when I read about people trying to keep hold of their PARENTS money I think it's all a bit hardhearted.

I know there is the argument that their parents have made them Tenants in Common to protect the inheritance but really what is more important? I would go for a clear conscience in knowing that my parent was receiving the best care that was delivered in a timely fashion. Choice is a great thing. Doing your best for your parent is even greater.

Thinking that getting Tax back to fund a CH is slightly unusual (post #8)-and where would that stop?. My late Husband had a full state pension but as he died at the age of 68 he only received three years. Should I receive a windfall for say up to when the average age of death occurs? Oh! the thought of nearly 20 odd years of state pension coming my way if I ever need a CH.

Love

Lyn T XX

 

[Pickles53]

Exactly Lyn T. TBH, I think that the issue of inheritance is very much linked to the current generation whose parents (like mine) were the first beneficiaries of the post-war welfare state, were able to buy houses (often the first generation in their families) and whose children were able to benefit from things like free university education.

I never expected to inherit anything from my parents or indeed any subsidy from them while they were alive. They both had secure but ordinary jobs and I wanted them to spend their money on themselves; they went without a lot when we were children and deserved the best, even if that meant an expensive care home.

Today's families are in a very different world, as owning a home becomes a financial impossibility for many, people work for longer thus not being able to care for older relatives, and final-salary pensions become a thing of the past. So perhaps we'll all have to get used again to the idea that inheritance should not feature in anyone's financial planning or expectations.

Paying tax/NI is like any form of insurance. We pay it to guard against the risk of something catastrophic happening. If it doesn't we should count ourselves lucky, not demand our money back.

 

[paulh]

Hi Paul,

There have been quite a few posts on this lately. Have a look at the Finance and Legal Forum to get some more insight.

On this forum before April 2015 the tenants in common route was widely discussed and offered as a way of getting a property disregarded. I would imagine that it was also discussed by those that drew up The New Care Act and was probably decided that some people were using it as a way of avoiding care home costs and the system should change. However the actual reason has not been stated in any guidance notes and until someone challenges it in a court, and wins, I believe the change is a deliberate one. Others on here are not so certain.



I am no fan of LA's but I do believe they are correct. I am surprised that they haven't gone further and challenged the change of tenancy especially if it could have been anticipated that your Mum would have needed care at that time.





I do believe that is now the case although your Mum/PoA has to agree to the valuation. The guidance does allow for discussion. If no agreement then LA can take the matter to court or (this is actually in the guidance) decide that they have fulfilled their obligations and leave you to it.





The LA cannot pressure you into a DPA. It really is of no benefit to them even though they can make charges and pay interest. All owners have to agree to a DPA as there is a legal charge placed on the house so either you or your Mum/PoA can refuse.

If you went for the DPA then there is no requirement to sell the house on death. The debt to the LA can be repaid from any means so if you wanted to keep the house you can find other funding. The guidance states 90 days to repay although again this is open to discussion but again the LA can resort to the courts to force a sale.






As I said above the LA cannot force you into a DPA so if they feel they have legally done all they can to facilitate an agreement they can leave you to it. That appears to be what they are saying in those emails. Again you would have to challenge their decision through the normal complaints process and then court.






I agree that it is cheaper for the LA to move someone with property into a CH and it definitely goes against the principles of The New Care Act. However someone with assets can effectively do whatever they/PoA want. They did not have to agree.




Whatever way I phrase this it will not read good to you and I make no apologies.....I see no reason why your Mum would be "thrown on the streets" even if the LA do back away. Do not forget that until her death she still owns 50% of her former home. Why should those assets not be used to fund her care?


I do hope this helps.

Hi Pete,

Thanks for your comprehensive and thorough reply; it does help a lot.

 

[paulh]

But taxes aren't just personal payment schemes...even if they were...education, health care, defence, infrastructure...all paid for by the taxpayer.

My Mother diligently paid her taxes...worked all her life...until she was 76, in fact.
My father paid taxes from 15 years old until he died at 66.

How much does ONE hospital visit cost the State?

How much does ONE year of schooling cost the State?

How much does one pregnancy, ante natal, birth, post natal care, health visitor...cost the State?

Pensions...free bus passes, winter fuel allowance, free TV licence.

Paid taxes????

We've NONE of us paid enough.

Hello again,

I do appreciate and understand your point.

However, it does grate a little when we hear about the likes of Google, Yahoo, Starbucks, etc., shirking their responsibilities by paying obscenely miniscule amounts of tax. Another example would even be the company who lease the very buildings that the Inland Revenue use, who haven't paid any tax for 10 years, due to their "creative accounting".

This may sound like we're going off topic, although maybe if these huge, unbelievably wealthy multinationals were held to account by our government and forced to pay a fair amount of tax, there would be enough in the pot for those that most need it.

Instead, it would seem a better strategy to target the little people of this country by forcing them to sell their hard earned property and thus possibly denying their children any kind of foothold on the property ladder.