Very worried about care funding

[feffy123]

Hello everyone
I'm looking for more advice! It is to do with property and funding.
We have finally managed to find MIL a home and had a meeting about admitting her in the coming weeks. It was decided that it was OK for her to stay after her respite care as she was self funding. She currently has 31,000. We were told by the care home to let Social Services know as she will need to claim when her funds drop to 24,000. We rang SS as we had already had a meeting and thought this would be straight forward. However there is a property involved. My sister in law lives there with her two children under the age of 16. She is a widow and has lived there for 10 years. My MIL house that she lives in is divided in 3 ways. 50% is for herself and 1/3 each divided in to one for one son and the other 1/3 to the son who has died...hence his widow living there. My husband and another son are due to inherit a 1/3 each on her death. Anyway the SS are now saying that we need to be reassessed and the property has to be considered when we were formally told it didn't have to be as a family was living there. After 10 years we are desperate to put her into care as its such a strain on our marriage. Does anyone have experience of this? I should have known it would not be easy I'm worried SS will insist the house is sold therefore putting my SIL and her children out of a home! Thanks

 

[Jessbow]

See a solicitor- it all sounds really complicated!

( don't forget that her will doesn't come into it at this stage, that means nothing until she dies).

Children under 16 would be taken into consideration BUT I am not sure that dau in law and grandchildren count.

 

[Pickles53]

Could you clarify when you refer to how the property ownership is divided that reflects the current ownership? If your MIL is not the owner of 100% of the house now it might make a difference.

As Jessbow says, the way in which the property would be divided after her death under her will is not relevant as this has no impact on the financial assessment.

I agree that you need some specialist advice, but just to say that if the house is ultimately included it does not automatically mean that it needs to be sold now. You could have a 'deferred payment agreement' whereby the cost of the fees is charged against the house value and would not need to be repaid until after MIL's death. This would allow your SIL some breathing space to make other plans.

 

[Pete R]

feffy123,

Do you mind me asking how much the CH will cost per week?

I ask because the £7000 odd capital your MiL has left will not last long. If the house is not taken into account, and it will be unless you can successfully apply for a Discretionary Diregard, then the LA will only fund up to a certain amount. If the CH costs more than that then someone will have to pay a top up or she may well have to moved to somewhere cheaper.

 

[Gg2]

I think it depends on whether the dividing up of the property is viewed as deprivation of assets. They look to see whether people have deliberately given a proportion of their property to family to avoid it all being taken into consideration for care home fees. I think it used to be 7 years that the property had to be in another family members name but now I believe it can be longer. This is what we were told by a solicitor


Sent from my iPhone using Talking Point

 

[feffy123]

Thanks everyone. MIL put the house in two of her sons names as heritence tax reasons this was done years ago. As one son has died his wife now lives there and I believe has 1/3 and another son has 1/3 so she still owns 50% . The CH is 1,000 per week so yes we realised her savings will be gone. The CH said that was OK and that SS would take over when funds are depleted. We don't care that we do not inherit any money as we believe it should go towards her care BUT at the same time we do not want to see SIL and kids out of a home so we are worried that we will have to sell. Complicated isn't it. !

 

[Beate]

I don't know the ins and outs of discretionary or other disregards but if it isn't disregarded you'd either have to sell now or get a deferred payment, meaning it will have to be sold at her death.
Does your SIL pay any rent for living there? I bet SS won't be happy about a property belonging to her but being lived in rent-free by someone else.

 

[Kevinl]

There's a link below to the age UK factsheet about the new regulations, it's quite easy reading but starting at page 8 and 23 are where the interesting bits are. There would seem to be numerous reasons for asking for a disregard on the house.
It is a bit unclear (to me) does your MIL own 100% of the house at present and all these shares arise after her death, if so they're irrelevant as until then she owns 100% and that's how it will be treated, if on the other hand the shares in the house were made and documented with the land registry then that's a different matter.
K


http://www.ageuk.org.uk/Documents/E...rmanent_care_home_provision_fcs.pdf?dtrk=true

 

[Chemmy]

I think it's all the third shares that are confusing me!

What would make sense is that MIL now owns 50% and the other 50% has been split two ways (ie 25% share each) between brother A and brother B (maybe when FIL died?)

Brother A died and his widow and children now live there.

MIL's 50% share will be split between brother C and brother D (feffy's husband) when MIL dies.

So each of the four brothers was eventually due a 25% share. Odd way of doing it but sort of fair in the end, I suppose.

Of course, I could have interpreted it all wrong.....and it only involves three sons (ie. two surviving plus the DIL), hence a third share each.

 

[Saffie]

Gg2, the 7 years only applies to the government rules for Inheritance tax and has nothing to do with LA and deprivation of assets. The LA can go back as far as it likes but decisions involving DoA usually depend on the timing of diagnosis and its relevancy to the transfer.

If Feffer says that the
tenancy change was done to avoid IT then it must surely have already been done, or a Trust set up at least, otherwise it wouldn't affect IT

Feffy, I hope your MIL has a good pension as it will have to be used for the home fees and I can't see an LA paying £1,000 a week if a cheaper home is available which could fulfill your MIL's needs. This could involve paying a topup. I was advised on this possibility by a SW when searching for a home as most nursing homes hereabouts charge £1,000 or more and I knew my husband's capital would quickly be eroded. You can always try saying that a move would be detrimental to your MIL's health.

 

[Pete R]

feffy123,

Unfortunately the majority of this post may not be what you want to hear. I do believe the facts are correct though.

The CH is 1,000 per week so yes we realised her savings will be gone. The CH said that was OK and that SS would take over when funds are depleted.

Unless the CH are willing to accept a substantial drop in revenue that is not correct. The Local Authority (SS) will not fund the total amount of £1000/week when the savings run out.

They will only pay a certain amount, which includes any state pension/benefits. This varies greatly from LA to LA. In my region it is £410/week minus my Mom's state and private pension so the LA contribution is in fact less than £200/week.

The shortfall is made up by way of a "top up" by family or in certain circumstances can be deferred to a property.

If neither of those happen and the savings run out the LA will mostly likely move your MiL to another home that can meet her needs and is within their budget.

We don't care that we do not inherit any money as we believe it should go towards her care BUT at the same time we do not want to see SIL and kids out of a home so we are worried that we will have to sell.

In an earlier post I mentioned that a Discretionary Disregard may be possible. I now think it unlikely. Most Discretionary Disregards revolve around someone giving up their own home to move in and care for someone else but now having read some of your earlier posts you were doing the caring for your MiL in your own home.

There is still a possibility of a Discretionary Disregard read the examples in this guidance to The New Care Act, Annexe B, Sec 42. Page 358. The one example given of "Fred" does not mention his age (I am assuming your SiL is under 60) so is somewhat similar circumstances.
https://www.gov.uk/government/uploa.../file/366104/43380_23902777_Care_Act_Book.pdf

........I believe has 1/3 and another son has 1/3 so she still owns 50% .

I am sorry to pick you up on this but if the house is divided in thirds as you say your MiL is left with 33.3%. How it is split in the will is quite irrelevant. What matter now is that she still has a significant sum tied up in the property as you said previously that the house is valued around £350,000. You say the house was split for inheritance tax reasons. Do not be surprised if the LA see this differently but again with the sum involved they may not bother going to deep.

For what it is worth this is what I think may happen. You should contact the LA now because of the fact your MiL's capital will shortly run down to the £23,250 limit.

They should offer you a Deferred Payment Agreement. This is just "a loan" to pay the care costs, off set against the property. The LA will then pay the CH in full minus pensions as before. With the amount of capital your MiL has in the house I see no reason why they should not offer this.

However all joint owners of the property must agree for the duration. If not then as I said before it is back to family "top ups". There is a set up fee and interest charged although if like mine your LA is not up to speed and has not decided on the figures yet then it is free for the duration.

When your MiL's dies the money has to be repaid. That can come from any source so it can mean the house does not have to be sold.

Someone mentioned that the LA will not be happy if your SiL was not paying rent. This should be irrelevant to the LA but if she does pay rent then this can go towards lowering the amount of the DPA and therefore the cost in the end.

The LA must be satisfied that the house will be maintained during the agreement and have the power to agree to your MiL having an increase in her weekly allowance (spending money) to pay towards insurance and up keep. This does have the affect of increasing the amount of the DPA though.

I hope that helps in some way.

 

[Pete R]

I don't know the ins and outs of discretionary or other disregards but if it isn't disregarded you'd either have to sell now.......

You would not have to sell now. Third party tops up are still allowed.

..........or get a deferred payment, meaning it will have to be sold at her death.

The DPA can be repaid from any source. This means the house may not have to be sold.

 

[canary]

This is a very interseting topic.
One aspect concerns me. What happens if a deferred payment is organised and then they live far longer than expected so that the value of the house does not cover the payment due? Will the relatives have to face a large bill on his/her death?

 

[Spamar]

I have another aspect. OHs money will be down to the upper margin shortly, but he will get something, a considerable something, from a trust fund in the future. How will LA look at that? Do I have to declare the trust!
I must add that money from the trust depends on someone dying. They are now over 100, but healthy, could outlive OH yet!

 

[Pete R]

This is a very interseting topic.
One aspect concerns me. What happens if a deferred payment is organised and then they live far longer than expected so that the value of the house does not cover the payment due? Will the relatives have to face a large bill on his/her death?

Sec 9.29 of The Care Act Guidance......

"Local authorities should, when someone is approaching or hits the maximum loan-to-value ratio use this as a point at which the local authority and the person review the cost of care, any means tested support they are now receiving and whether a deferred payment agreement continues to be the best way for someone to meet these costs."

Relatives cannot be held responsible for someone else's care costs. Even if they stop paying any agreed top ups.

 

[Pete R]

I have another aspect. OHs money will be down to the upper margin shortly, but he will get something, a considerable something, from a trust fund in the future. How will LA look at that? Do I have to declare the trust!
I must add that money from the trust depends on someone dying. They are now over 100, but healthy, could outlive OH yet!

If you are asking if this can be used for a deferred payment agreement then I think not. May be best starting another thread on it.

 

[Saffie]

Spamar, as far as I know the LA will only look at the assets a person now holds.
A legacy in the future could affect things when it happens but, as the person might not live to receive it, I can't see how it would affect the initial assessment.

I would assume that any large sum of money, from whatever source, will have to be declared to the LA, if and when it arrives!

As a spouse, your house should be disregarded anyway.

 

[feffy123]

Thank you everyone. Sorry for the delayed response! I have been told by my OH not to worry or speculate at this time as there are so many factors that need to be looked at. We are all individual I suppose we can't second guess! Anyway I made an error the house is divided by 50% MIL 25% one son and 25% widow who lives there. So as you can see a complicated situation. SIL does help with her care on occasion .