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We are all living longer thanks to improved medical advances and healthier lifestyles and it is likely that you will enjoy good health for some time after retirement. The experts tell us that there was a 50 per cent increase in life expectancy in the last century. Men can now expect 65 healthy years out of 73, and women can expect 68 healthy years out of 79. However, there could come a time when you are just no longer able to remain at home. This might be because of ill health, or because you are just too old and frail to take care of yourself properly. If you live alone, the companionship of other people of similar age can be welcome.
What are the chances of me needing residential care? Here are some sobering facts: Of people over 60 years of age:
¨ 3 million of these have a mobility disability. ¨ 700,000 have a continence problem. ¨ 1.5 million have personal care difficulties. ¨ Half a million people are currently cared for in nursing homes.
A further five million people are receiving care from relatives, friends or the Local Authority.
What is the procedure for entering care?
Many elderly people need residential care after discharge from hospital. Local health authorities have to meet the after care of persons who have suffered from illness - and they have to meet the cost. More commonly, individuals contract privately to enter the care home of his or her choice when they feel the time is right. The initiative could come from them or from family, Doctors or social workers who recommend that residential care is needed. Where it appears to a Local Authority that a person is in need of community care services, the authority is required to carry out an assessment of his or her needs. It is the duty of the Local Authority to provide residential care when it is proved to be needed.
What is the cost of entering care?
Funding life in a residential care home or private nursing home does not come cheap. Approximately, 40,000 homes have to be sold each year to pay care bills and this figure continues to rise.
Where the resident has needs accepted as the responsibility of the NHS, then the whole cost of care falls on the NHS and the resident is not liable to make any contribution irrespective of means. All well and good, but here is the sting - those who enter a home through an arrangement made by the Local Authority must pay for it or contribute to the cost whether the authority provides or buys in the accommodation. Just to put this in perspective, for just one year in residential care, the cost could be in the region of approximately £25,000+. The Local Authority will calculate the contribution to be made, if any, in accordance with a nationally defined “means test”.
The value of the former home will usually fall into the capital means test, although it must be disregarded for the first 12 weeks from the start of permanent admission to a care home. The value of the former home must be ignored completely in the means-test if the home is occupied by one or more of the following:
¨ a spouse or partner.
¨ a specified relative (to include amongst others children, grandchildren, parents, brothers and sisters), who is aged 60 or over, or under 60 but is incapacitated.
¨ a child under the age of 16 whom the person entering the home is liable to maintain.
The Local Authority can also ignore the value of any premises if they consider it reasonable to do so, but this is completely at their discretion.
Although the Local Authority cannot force a sale of the house without a Court Order, if the house falls into the means test, and is counted as capital available to the person entering care, the following options are available:
¨ The property may have to be sold to pay the fees.
¨ The property could be rented out to produce income towards some or all of the fees.
¨ Enter into a “Deferred Payment Agreement”. The Local Authority may agree to enter into a deferred payment agreement if you do not wish to sell your home, or if you are unable to sell it quickly enough to pay for your fees. The deferred payment agreement is for the difference between what you would be assessed to pay if your home was taken into account, and the amount you are assessed to pay from your income and other capital. The Local Authority will place a legal charge on your property, which means that the Local Authority puts a claim on the value of the property so that it can claim back the money which you owe it once the property is sold.
The Local Authority can also create a legal charge on your property if they arrange a place for you in a home, and you are unwilling or unable to make your contribution. This means that they can make a claim on the value of your home, and recover the money owed to it for fees when the property is sold.
Income
If you are the person assessed as needing care in a home, then income in your name will also be looked at for the purposes of the means-test. Such income will include your state retirement pension, many social security benefits to which you are entitled, such as Income Support and Attendance Allowance, tariff income from capital, and private pensions. Some income is disregarded in full or part, such as Disability Living Allowance, and interest on savings, which counts as capital and not income. As with capital, the Local Authority can also take into account notional income, which is income that you may no longer have, if you have deliberately deprived yourself of it.
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