Financial Support

[Margaret W]

Hi all,

I read earlier of an idea to categorise some of these threads, and a Finance thread would be a good idea.

I got some good news this week.

Mum is self-funded, I always knew she would be as we decided to sell her house rather than go through the option of keeping it, getting local authority funding and a "loan charge" against the property, as we decided it would be hassle we could do without, even though it might have been a financial benefit in the end.

I knew she would be entitled to Attendance Allowance, though it took three months from application to approval, but was backdated to June. Until they withdrew it with no notice, and no reason, and I only spotted it cos I have online access to her accounts.

Anyway, reinstated.

It is a real problem funding long-term care, not least cos none of us have any idea how "long-term" it might be, and we don't want to be in a position of having to move our loved ones somewhere else because we can't afford to pay for the home they have known and hopefully enjoyed for several years. I can't think of anything more cruel.

Then we went through the difficult that her "Assessed Income Period" had ended (for the purposes of Pension Credit - she only got the savings credit, no guarantee credit).

If you are reading this and haven't a clue what I am talking about - ask!

The reason as to why the AIP had ended was unclear. I read that it was because she had gone into a care home, and indeed that seems to be true, but I was also told it was because she had sold her home. The young official on the phone said "selling your home is a life-changing event, I mean it's not like winning £4m on the lottery is it?". I agreed, it isn't, but I would have thought that winning £4m on the lottery was rather more life-changing than selling a terraced cottage for £130,000 that you had bought, paid for and maintained for 50 years. The former is unexpected and uncommon, the latter is expected and common.

Anyway, several months ago I applied for mum to be allocated the additional allowance in her pension credit calculation for "severe disability". I received a swift letter telling me she was not eligible for that, so when I spent the next month organising a Care Home Insurance plan for her, I assumed a certain amount of income as I was then aware of (basic state pension plus a small addition cos of my dad's NI contributions), and made decisions accordingly.

The house was sold, and the money invested in various ways. If anyone wants any ideas on how it can be invested (I am not a financial adviser, can only tell you SOME of the options and what we went for, but it might make a start to know what questions to ask, you make your own decision), please let me know.

As far as I was aware, everything was settled. State pension plus little extra, Attendance Allowance, and income from investments.

The letter this week tells me that mum is entitled to an extra £48 a week. Made up of £29 allowance for severe disablement and £19 Savings credit. First query, why the £29 for severe disablement when I had already been told she wasn't entitled to it. Answer, because she gets Attendance Allowance. Oh. No-one had told me that one opened the door to the other.

Then, why £19 Savings credit when previously she had been awarded the same amount, but it was reduced by 40p in the pound for any income she had above some upper limit. Oh, that reduction doesn't apply if you get he Severe Disablement premium. Right. No-one told me that either.

I am learning all the time.

So the financial decisions I made a month ago are now inappropriate because mum now has £48 a month extra income - for the next 5 years, cost she now has an Assessed Income Period running from 6th August 2007 (the day she entered a care home on a permanent basis) and 5th August 2012. And any changes in income or capital (including the sale of her house which was after 6th August 2007) are disregarded.

Fortunately, the financial decisions I made are not affected detreimetally by this, only to the extent that over the next 5 years we will have more income to fund mum's care than we thought we would have. Can't be bad, we can invest the excess.

So I am a happy bunny.

But cross with the DWP for taking so long, giving us one decision and then reversing it (actually two different decisions, both reversed), and giving no explanation at all that was comprehensible. When you ring them up, you might get a knowledgeable member of the call centre staff (cos that's who you get, you don't get a DWP person), or you might get one who started last week and has only just learnt how to use the computer, let alone have any idea about the benefits to which you might be entitled. This week I was fortunate to get the former.

What it all means for me is that mum will be financial secure in her home until she is 94 (13 years) without dipping into her capital apart from the next 3 years which can be reasonable planned for. When she is 94 we might need a re-think, but will still have some reasonable capital left. And all from a little terraced cottage.

I am feeling comfortable.

Thanks for listening, and hope some of you have understood me, and if not, get in touch.

Regards and love to all

Margaret

 

[germain]

Hello Margaret

Our Mum too keeps having her AIP reviewed - we were told that this was because she moved from home to an assisted living complex and then to a CH.

Sorry to contradict but I used to work for DWP and when you ring you get a DWP person every time - its just that some are more efficient than others - as in all walks of life. The call takers are mostly on a different team ( at least in the centre I used to work but may be slightly different organisational model used in other parts of the country now) and really only get basic training. They have to "hand-off" more difficult calls to the processing teams for expert advice but when its really busy the whole of the centre will answer calls so of course, on pot luck days you may be lucky enough to get the absolute office expert - just by chance.

Good news tho' on the financial side - I'll never forget the "win" we had after following your advice earlier this year.

Best regards
Germain

 

[117katie]

Dear Margaret

I agree that a finance thread should be there. You have given a lot of information there, some of which exactly matches the phone calls I have had over the last few days. When my 83-year old was allocated the attendance allowance, the severe disability bit came automatically. I don't remember having to ask for it. All I did was the usual phone call to Pensions Office as her Appointee by then, followed by the basic form filling bit, and it just appeared out of the blue.

So if I were you, I would go back to them and ask them to backdate that severe disability allowance to whenever you first approached them.

Good to read your message, contained a lot of useful info.

Take care

Katie

 

[Margaret W]

Germain

Did I give you some advice that helped? Good to know that, but what was it?

Best wishes

Margaret

 

[germain]

Advice that helped

Margaret - you are so busy trying to help others that you forget to pat yourself on the back when you make a big difference (ref previous posts re family)

You pointed out the way to the Council Tax disregard which saved us over £70.00 a month.

regards
germain

 

[Natashalou]

Very interested to read about the extra £48 per week. My mother gets AA (again, took months to assess but we finally got there) , the £87 per week nursing care contribution from the NHS, her state pension, her own private pension, plus half my deceased fathers private pension.
Despite all this her capital (mainly from sale of her home although she had some savings too) is still eroded at the rate of around £1800 per month.
Still enough to keep her where she is for a few years yet but the way the fees are going up certainly not indefinitly!
wondering if I ought to be looking for somewhere cheaper already as I presume it will be less disruptive to move her now than in a couple of years or so.

 

[jenniferpa]

Well you could I suppose, but I wouldn't necessarily assume that she will have to move if push comes to shove. 1) 2 years can be quite a long time at this age. Not to be depressing but it's quite possible that by the time her own funds are expended other things may have happened. 2) the LA won't pay more than they normally pay UNLESS you can show that moving her will not only be detrimental to her health, but that this is the only suitable placement for her. I have read online (so don't know how reliable it is ) that by forcing a full (and I mean full) evaluation of all a persons needs (not just physical but psychological and social) can force the LA into an acceptance of the status quo.

Incidently - I thought that £87 per week was supposed to have gone up in October? I mean for everyone.

 

[Natashalou]

It might have, it went from £83 to £87 in april. The billing at the home is not the best, took months for them to stop billing me at the full amount! In the end i deducted the £87 myself as Id be blaming the PCT and it was the homes fault all along. So maybe it has been increased and nobody has told me?

 

[jenniferpa]

Have a look at this

www.careaware.co.uk/PDFs/Free Nurisng Care Bulletin - WWW.doc

or this
http://www.dh.gov.uk/en/Publication...tions/PublicationsPolicyAndGuidance/DH_079515

Essentially if you were in low or medium band (I assume your mother was medium band) you should now be getting £101

 

[Natashalou]

Yes, I see. Many thanks for that as Im certainly still being billed as if the PCT are only paying £87 per week! Every little helps!

 

[Louise.D]

I applied for the higher rate of attendance allowance for my mother and was told she had to wait for three months. When questioned I was told that she must of been in this condition for over three months to qualify.

 

[Margaret W]

I've never heard of the three-month rule for attendance allowance, only that the person needs to have needed care for six months before it kicks in, which required a careful thought of exactly when my mum started to need "watching" at night. We were pretty happy with the decision regarding the date, it seemed fair.

Re financing long term, we used part of mum's house sale proceeds to purchase a "care fees plan", arranged via Help the Aged. It entails making a lump sum payment (which is not refundable), but does guarantee a fixed amount of income each month for the rest of her life, ours rises at 5% per annum. The amount you have to pay is based on what fees you think you will need to cover, when you want it to start paying out, and then medical evidence regarding the life expectancy. I don't know if there are different criteria if the person is in a nursing home, but I think not, just that the fees will be higher.

We decided that we would rather "lose" the lump sum (in our case £55,000), i.e. we will never inherit it, in order to provide the security of a monthly income after 3 years, and for life. We could have taken out a plan which paid immediately, but that cost virtually double, and we thought we would manage to pay for the first three years out of the rest of her capital and income, and now we have the extra £48 a week, that is a welcome bonus.

As the chap from Help the Aged said, you will never know if you have made the right choice about financing, until your relative dies. If mum dies within 3 years, we have "wasted" £55,000, but if she lives till she is a hundred (not impossible, she has no life-threatening illnesses, she will receive a monthly income of £1,200 (rising at 5% pa) for 17 years, for a payout of £55,000. £1,200 a month for 17 years amounts to about £250,000. There is no way her capital and income would support that, so the Care Fees Plan would be a godsend.

I am no financial expert, but I would suggest those who think their relatives could live for longer than their capital will support them do consider a Care Fees Plan. Beware of pressure from the representative to take out other forms of investment as well - we did do that, but only with careful consideration, and after querying various things with him, he gave us different alternatives, so don't accept the first thing you are given, or even accept anything at all. But the Care Fees plan I think is worth serious consideration.

The amount paid out of the Care Fees plan, if it is paid direct to the Care Home, is totally free of tax, which income from most investments is not.

I did agree with the suggestion on here that we should have a separate and permanent link to information regarding finances.

This was the plan I set up for my mum, aged 81, no known life-threatening illnesses.

After the sale of her house, she had capital of about £150,000. I spent £55,000 on the Care Fees Plan. I left £10,000 in a high interest current account (internet) to pay for the next 6 months fees and give a bit spare in case anything else was needed. I put £10,000 into a six-month fixed interest account which will mature in April 2008 to pay for fees till October 2008, I put another £15,000 into a fixed interest account which will mature in October 2008 to pay the fees till October 2009, and £35,000 into another fixed interest account to mature in October 2009 to pay the fees till October 2010, at which time the Care Fees plan will kick in. Any other spare capital has gone into a Cash ISA (also Fixed Rate and tax free, cos I guessed that Interest Rates would come done, but that was purely a guess, they have, so I am pleased, but it really is a guess), and I even invested £5,000 in premium bonds as the income is tax free.

Tax is an issue if your loved one has income from the state of say, £160 a week (it varied according to their age), and investment income as well, so it is important to recognise investments which are tax-free. As well as ISAa, there are National Savings Certificates you could consider (information available from the Post Office).

All the investments were paying more than 6% per annum when I took them out, interest rates have dropped since then, so you might not find such good deals available.

We also put £25,000 into an investment bond, which is also tax free, but I am not entirely sure we knew what we were doing with this, so I can't say it was the right thing to do, but most financial advisers would advise having a spread of different investments as some may go up and some down. I have to say, we did not want to take much risk with mum's investments cos at the end of the day the Care Home fees have to be paid, and with some investments you need to cash them in when they are not at their best, and I didn't want to risk that happening. Okay, there are sometimes big profits to be gained on some investments, but they can also be a disappointment, and if you need the money, you need it then. You can't tell the Care Home, Oh will you hang on for a couple of years till my investments are performing better. I wanted some certainty as to what mum would have available.

I present the above only to show MY idea of dealing with mum's £150,000. As time goes on, her investments will fall, and tax will be less of an issue. So you have to keep a watch on things. Some people cope better with that than others. If you feel this is out of your depth, and you have a sizeable sum to manage, please get professional help. Advisers don't all cost the earth, and some are well worth the fees you might pay. I am not qualified or registered to give financial advice, and any advice here is just my own approach to dealing with my mum's money.

Hope this helps someone to think about organising their loved one's finances to the best effect.

Love

Margaret

 

[Margaret W]

Katie, it has been backdated, with no notification, it just appeared in the bank and I didn't know what it was.

Germain, I had totally forgotten the council tax thing, glad it helped.

Now, can anyone tell me, now that mum has "Guarantee Pension Credit" which entitles her to free dental treatment - is that likely to cover dentures? Cos her top set of three teeth were lost in hospital 6 months ago, cos about £300.

And Vouchers towards glasses - she also lost a pair in hospital, can I get another pair free or cheaper? She is currently wearing the previous prescription pair.

Thanks all

Margaret