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The financing of your client’s care

In this article we look at what happens if your client moves into residential care and the finance rules affecting the funding of their care fees.

Who pays?

This will depend on several factors: including whether your client needs nursing care,  care meeting their social needs because of advancing age, or a combination of both of these. It will also depend on the level of their savings and income.

If your client has complex medical needs, such that they require full-time nursing care, then they may be eligible for NHS Continuing Healthcare and their residential home fees will be met in full by the NHS. Clients will need to ask for a preliminary assessment as to whether they might qualify under this scheme as this funding is generally reserved for those with complicated medical needs. If your client does not qualify, but is receiving care in a home registered to provide nursing care, and is assessed as requiring care from a registered nurse, then your client should qualify for NHS Funded Nursing Care. In 2022 the standard rate payable is £209.19 per week and it is paid directly to the care home.

If your client is not receiving nursing care then they may have to pay all their own fees. This will be the case if they have capital in excess of £23,250. Certain capital is disregarded when assessing this amount including the older person’s home for the first twelve weeks of their stay, or permanently if it is occupied by the resident’s spouse or by another relative aged over 60. One spouse is not liable to maintain the other and investment bonds are disregarded.

When your client moves into care they should be entitled to claim Attendance Allowance, which is not means tested.

Is your client the beneficiary of a trust?

The income from a life interest trust will be taken into account on a financial assessment but a discretionary trust will be ignored, unless the trustees exercise their discretion to appoint income and/or capital to the older person. If your client’s partner has died leaving them a life interest in a share of the house then the value of that share will be ignored.

Has your client given assets away in the hope of qualifying for more help?

If your client is entitled to help towards their care fees, the local authority in which your client lives will be liable to fund this.   Your client will receive funding up to the level that the local authority is prepared to pay.  If your client has given assets away, and the primary motivation behind the gift is to qualify for greater help towards care fees, then the Local Authority can take the view that the older person has intentionally deprived themselves of assets and assess them as if they still owned the asset in question.

What is proposed for the future?

The Dilnot Commission recommended reform of the care fees funding system and a cap on the amount that people should be required to pay towards their care fees was set at £72,000. The implementation of a new system was postponed and then resurrected by Boris Johnson’s government with an increased cap of £86,000 and some state funding available once a person’s assets fell below £100,000 . This in turn has been delayed until October 2025. In the present economic circumstances it is entirely possible that the new regulations will be deferred again. In the interim, the inheritance tax nil rate band remains frozen at £325,000, with the freeze originally intended to help fund these changes together with the proposed social care levy.

Contact us

For more information, please call us on 0800 915 7732.

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