Car Home fees
We have just embarked on this, and despite me being an accountant (not in practice I hasted to add), I have learnt a lot. So if I have learnt a lot, people without an accounting background are going to learn a lot more.
Your Social Worker will explain it all to you. Alternatively, I have a chap coming from Help the Aged next week who is going to explain it all to me again.
Brucie will go mad at me if I say too much, but basically, unless your relative has little savings and has no property to sell (or keep), they will probably end up paying for most of their care themselves, until the money reaches about £21,500.
So you need advice on how to invest any monies to enable them to last as long as possible.
If your relative has little savings and no house, the SS scheme will enable them to live in a home costing around £350 a week (varies with area), by taking their pension etc. and topping it up. But if you want your relative to live in a home which costs more, you, or someone else, will have to pay the difference. That could be £100 a week or more, depending on your choice of care home.
If your relative has a house, but savings of below £21,500, the SS will also top up care home fees to about £350 a week. Whatever they top up will be free for the first 12 weeks, then any further weeks will be listed as a "charge" against the property when it is sold. It is interest free, so worth considering, but an empty house still costs money to upkeep. You will still have to pay the difference if your relative is in a home which costs more than the £350 a week.
The really annoying things are that if a relative has saving, they may well be paying tax on them, and using the net figure to pay for the care home. This seems wrong, and I urge you to write to Alastair Darling, the Chancellor of the Exchequer to complain about this. The other niggle is that if your own estate is likely to be subject to Inheritance Tax when you die, any payment you make towards your relative's upkeep which is taken out of your capital, could result in an Inheritance tax charge when you did. Another point to take up with Alastair Darling.
And yes, in answer to someone's question, if you can't afford to pay for the extra for a care home, and the SS is only prepared to top up to £350, you will have to move your relative to a cheaper home.
Re Attendance Allowance, your relative won't get it for any period when the SS are paying part of the care home fees, so the loan against the house will be that much bigger.
In short, if your relative is poor they will have to go into whatever home the SS will pay for, whether you like it or not (but there is a get out if the home does not provide the appropriate care - and you can ask for an assessment of that), but if your relative is partially well off, or has a house, you will end up paying for the majority of the care out of their income and capital until it all falls below £21,500.
Don't think I have misled anyone there, Brucie. Leave it to you!
Regards
Margaret