Paying fees from proceeds of selling Dad’s house

Discussion in 'Legal and financial issues' started by Tubs1957, Apr 24, 2018.

  1. Tubs1957

    Tubs1957 New member

    Jan 17, 2018
    6
    My Dad has been in a nursing home since last July. He is self funding and has no mental capacity. I’m getting so confused and muddled. Basically he receives a state pension, a private pension and receives AA. I have EPoA which is all in place properly. The house sale completes Friday. Presumably the monies less fees go into his bank and I pay the care ho evdirect for his fees. Do I pay his fees from the sale proceeds or from his benefits? I believe once money left falls below around £23000, I can apply to the LA for assistance with fees? But then all the time he’s alive he’s still receiving his benefits, so how do we reach the lower threshold all the time money is coming in? I’m confusing myself even more now. For some reason I’d got it into my head that I’d also retain 10% of the house value. But I don’t think that’s the case but I’m not sure why I thought that! Can I use any of the money myself? Any advice would be appreciated. Tia.
     
  2. Beate

    Beate Registered User

    May 21, 2014
    11,696
    Female
    London
    No you can't use any of the money yourself, it's your Dad's.

    You pay his care home fees from his money, whether they are sale proceeds or benefits - presumably they all go into the same account?

    With regards to what happens when he reaches the upper limit of £23,250 - Social Services will have to do a financial assessment to figure out how much they'd pay and how much your Dad. Only the lower limit of £14,250 would mean they'd completely take over but a) Attendance Allowance would have stopped already and b) his pension and half of his private pension would be taken as payment for care home fees, so those benefits are not going to accumulate like crazy. He is allowed to keep a weekly personal expense allowance of £24, that's it. Care is never completely free, unless he qualifies for CHC funding, which is very hard to get.
     
  3. Kevinl

    Kevinl Registered User

    Aug 24, 2013
    4,760
    Salford
    As the house is being sold that implies there's no partner living in it, the LA let the partner keep half of the private pensions but as there is no partner then they take it all don't they (less the £23 PEA)?
    I don't know why you think they let you keep 10% of the value of the house, the only 10% figure I've seen is that if you enter a DPA then the LA will only advance a maximum of 90% of the value of the house so the last 10% would be his, but could still go to pay for his care.
    It doesn't matter which part of his money you use to pay the fees but a simple calculation would be if the benefits and pensions pay (let's say for example) one third of a months fees then the money from the house sale will go down at the rate of the other 2/3 of the fees each month.
    If the fees are £1.000 pw and the benefits and pensions are £300pw then his capital will reduce at the rate of £700pw, divide that into the capital and you'll see how many weeks the money will last but allow for an annual increase in the fees of 10-15% on average.
    K.
     
  4. Tubs1957

    Tubs1957 New member

    Jan 17, 2018
    6
    Thank you. Do I have to inform anyone how much the house sold for or just commence repayments?
    thsnk you
     
  5. Tubs1957

    Tubs1957 New member

    Jan 17, 2018
    6
    I don’t know where I got the 10% notion from either. So basically the minimum amount I’ll be left with one day is the £23000? Does anyone monitor what money there is or not until funds have depleted near to the £23000?
     
  6. Beate

    Beate Registered User

    May 21, 2014
    11,696
    Female
    London
    No you just continue payments.

    YOU monitor. The council couldn't care less how low your Dad's money gets unless you tell them.

    No, the minimum amount or lower threshold is £14,250. The upper threshold of £23,250 is when SS should start financial assessments and contributing partly.
     
  7. Tubs1957

    Tubs1957 New member

    Jan 17, 2018
    6
    Thanks Beate
    Is there any allowance for his money to be used for gifting, sure I’ve read something about that, £3000 a year...
     
  8. Beate

    Beate Registered User

    May 21, 2014
    11,696
    Female
    London
    No, you are confusing this with a tax allowance. But if he has dementia you cannot simply give away £3,000 of his money a year, that could be seen as deliberate deprivation of his assets. He can continue giving small gifts of money for Christmas or birthdays in line with previous years, but not more.
     
  9. Beate

    Beate Registered User

    May 21, 2014
    11,696
    Female
    London
    They have the power to go back as far as they want. Whether they always do it I couldn't say, but if they conclude you've deliberately depleted his assets, they will calculate as if he still had the money.
     
  10. Yellowduck

    Yellowduck Account Closed

    Dec 11, 2016
    112
    Essex
    This is often said, and I am sure it is the case. However, I am not sure how practical it would be. If they discovered the funds were 'spent' 8 years earlier, and even if they still consider that the PWD still has the money...... If the relatives no longer have any funds / property etc, do they just put the PWD out on the streets?
     
  11. nicoise

    nicoise Registered User

    Jun 29, 2010
    1,807
    The LA would look to the receivers of the ‘missing’ funds to pay the care fees - there are paper trails through bank records etc that would point to a receiver of financial ‘gifts’, or the activities of an Attorney moving funds to accounts not in the donor’s name. Money laundering controls track the movement of surprisingly small sums of money.

    Quite simply, it is theft from a vulnerable person.
     
  12. jugglingmum

    jugglingmum Registered User

    Jan 5, 2014
    5,065
    Female
    Chester

    I have heard at work of LAs going back 20 years where they suspect impropriety. As Nicoise said if the person doesn't have capacity it is theft and the modern money laundering rules are very strict.. And whilst they wouldn't put someone out on the streets there is no reason not to recover the monies from those that benefited from it.
     
  13. jenniferpa

    jenniferpa Volunteer Moderator

    Jun 27, 2006
    39,432
    Someone recently posted about a situation where they hadn't stolen any money from the person in care, but had placed them in a home that was more expensive that the la thought reasonable, and thus the funds were spent more quickly than the la thought reasonable. I'm not sure the poster came back with an update but the poster was not in a good place emotionally.
     
  14. jenniferpa

    jenniferpa Volunteer Moderator

    Jun 27, 2006
    39,432
    Actually no. Because from that upper limit to the lower £14k one that amount is subject to tarrif income ( you pay £1 per £250 of savings over the lower limit per week).
     
  15. Yellowduck

    Yellowduck Account Closed

    Dec 11, 2016
    112
    Essex
    This brings into question the whole principle of PoA.

    My understanding is that a PoA has to do what is in the best interest of the PWD. However, that is open to a degree interpretation.

    I could have admitted my Mother to a home costing £500 PW, but I decided it was in her best interest to enter a home with her en suite own room, with a nice view, at £800 PW.
    We choose to spend £200 per month on Mum having a regular hairdresser, flowers for her room, and regular 'treats' (as well as pull up pants we have to supply!).

    Mum has also been very generous all her life and regularly gave the grandchildren money for various events. She would be upset if she thought this did not continue.

    It could be said that these are luxuries and we should be saving mums money so it lasts longer.

    In our situation, the above is fairly hypothetical, and the value of her property will cover her costs for many years, and I very much doubt she will survive more than the 15+ years it would cover, however, for someone with a much lower savings figure it may be more relevant.

    I would be interested to know, out of curiosity, what charges a solicitor would deduct for actively 'managing a PoA' and dealing with all finances for PWD. I expect it would be far more than we are spending each month!
     
  16. Yellowduck

    Yellowduck Account Closed

    Dec 11, 2016
    112
    Essex
    My point being is that where would they go if those who benefited have no assets remaining.....
     
  17. jenniferpa

    jenniferpa Volunteer Moderator

    Jun 27, 2006
    39,432
    I think it's quite clear that the person in care would still be housed in a care home even if at LA expense. The separate legal proceedings the LA might take against the person who had benefited are just that, separate.
     
  18. Joyceydaughter

    Joyceydaughter Registered User

    Jan 2, 2013
    7
    Joyceydaughter said:

    I thought I was allowed to give £3,000 away each year; I have 3 children and they have had £1,000 each, I think, each year up to last year. I had not gone round to this year yet. I sold my Mum's bungalow, and because of real necessity, I spent some money on my house, eg double glazing, heating and gutter work. I can't quite remember what these total, but all the money from the sale of the bungalow, and all money in the bank & building society has gone in care fees. I would be too upset to work it out but reckon at least £200,000 has gone to pay care fees in 4.5 years. I have had to arrange now to dip into her savings, another £20,000 has gone and I now need to sell some more assets. I have only recently discovered about the £14,100, thinking that at least I would be left with £23,250 so hence I will say if any problem, that I had need of that now. They will have to put a Charge on my house and wait until I die if it transpires I have to pay it back.

    "Mum" can give gifts of £250. Don't know if there is a limit on how many payments, or whether it has to be to different individuals. I had also thought that out of the allowance there would be the funeral money but as that might be the only amount left, then I will ensure that there is enough money to pay for the funeral eg with a funeral plan out of current savings, so at least there will be some small crumb of inheritance for my children. I will check out about the £3,000 payments.
     
  19. Joyceydaughter

    Joyceydaughter Registered User

    Jan 2, 2013
    7
    From Joyceydaughter:

    Some of you might be annoyed that I have spent some of Mum's money, and I know it is her money that she worked hard for all her life, but the repairs are not a luxury. I have taken photographs to prove that my house was in a poor state of repair and I have only had done what was essential.

    Mum had a fall at the same time I was undergoing treatment for breast cancer. In retrospect I wish I had put in her the Home for respite while waiting to know if I had to have chemotherapy. I have no siblings by the way. Maybe I could have kept her at home a little longer, though the physios said her dementia was preventing her from being able to walk again. She broke her femur. I didn't expect her to be in the Home for this long, 4.5 years, as she has had dementia since 2008. She has vascular dementia and some Alzheimer's. She will be 90 in December.

    The people who pay subsidise the people who don't. In Mum's Home, there are only 10 residents who self-fund, in a Home with 40 rooms, some for married couples.
     
  20. nitram

    nitram Registered User

    Apr 6, 2011
    18,905
    Male
    North Manchester
    This limit and the £250 one relate to IHT (inheritance tax), they are nothing to do with deliberate derivation of assets and LA financial assessments.
     

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