Will a council take our home to pay for care?

Confusion continues to reign over the financial rules with regard to residential homes.

Personal Finance Editor

A Parliamentary bill due to reach its report stage next Monday aims in part to clear up confusion over who will be forced to pay if someone needs to go into a care home.

The Care Bill, which will have its third reading by next Wednesday, aims to put a cap on the cost of long-term care, so that even after contributing to fees, a patient may still leave something to their family.

However, confusion still reigns over the new rules and several concerned readers have contacted i about future care costs. Fears continue about the financial burden they could put on families.

Typical is the question asked by Eric Evans. “The definitions, used  by care businesses and councils of the various levels of care are very inconsistent,” he writes.

“The information one gets from such organisations is very patchy.” In particular he’s concerned about the council “confiscating my home or taking the proceeds of selling one’s house. Does that apply to all sales, even where one goes into a non-council home, or apply only to going into a council run home?” he asks.

We put Eric’s question to Janet Davies, managing director of long-term care specialists Symponia. “I agree that the world of care can seem daunting,” she said, “and while the terminology might appear  clear to those working within it, to those people investigating it for themselves it can be anything but!”

She explained that old-style  residential homes – often called rest homes – are now often referred to as care homes without nursing. Without a “nursing” classification the home doesn’t need to have  qualified nurses on duty.

Meanwhile, Nursing Homes are now sometimes called care homes with nursing. They have to have at least one registered general nurse on duty 24 hours of the day.  Residents of these homes tend to more poorly and dependant.

Then there are EMI Homes, which stands for Elderly Mentally Impaired. “This rather unflattering name mainly refers to homes that give dementia care, either solely or within dedicated units inside the home,” Janet explains.

That’s helpful, but what about finance fears and losing a family home? “No-one actually ‘confiscates’ a property, not even a local authority,” is Janet’s reassurance. She says that the monetary value is take into account if a person goes into a care home.

If the Local Authority concur that residential care is the best option then it will see if that person is classed as a self-funder. That means they have assets over the upper threshold of £23,250 (in England).

Assets include the value of any property so if it totals more than £23,250 the local authority won’t pay anything towards care until the level falls below that amount. Proposals in the Care Bill seek a £72,000 lifetime cap on care costs.

“We’re seeing growing concern over care fees since the introduction of the Care Bill,” says Lee Goggin, co-founder of findawealthmanager.com. “Under these reforms government help won’t kick in until a person’s assets fall below £118,000 which means people will need to understand and plan for the costs of care as soon as possible.”

Janet Davies agrees. “The best thing to do is to invest in the services of a specialist financial adviser and request a Care Destiny report,” she advises. Many wealth managers are launching teams to help people cope with the costs of long-term care in old age, Mr Goggin points out.

Alistair Cunningham of Wingate Financial Planning says that’s of little use for those with a more urgent need for care. If that’s the case, he advises immediate needs annuities which provide a guaranteed level of income, but at the cost of an immediate loss of capital.

“To me the downside of this irrevocable commitment is less relevant than the risk of being kicked out of a care home to a state-funded one. Why would someone not want the best care they can afford,” he said.

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