This piece first appeared in Saga Magazine in February 2004
The text here may not be identical to the published text

 

Counting the cost of going into a care home

it may not be as bad as you fear

As we get older, most of us worry about the expense and difficulties of going into a care or nursing home. And most of us need not do so. Only around one person in five is likely to end their days in a home and for most of them – the state picks up most of the bill. Of course, worrying is understandable – the rules are complex, the costs can be enormous, and the effect on family members can be considerable. But it is worth remembering that for most people it will not happen.

If your health means that you need care that cannot be provided at home then the local authority will assess your needs. Some people can pay for their care themselves – they are called self-funders. But most people need help with the fees – either from the local authority or in some cases from the National Health Service.

Can I get it free?
There are two ways that you may get your care provided free by the National Health Service.

Can I get it reduced?
Care in a home does not come cheap. Costs vary around the UK but typical charges are around £500 a week for a nursing home and £350 for a care home. These are large amounts for anyone to find.

In England – if you get nursing care in a nursing home then you will get something towards the nursing costs in one of three bands £40 if nursing care is ‘minimal’; £75 if you need care from a registered nurse daily or £120 if you require frequent attention from a registered nurse. If you are in the lower or middle band, always appeal to try to get yourself assessed in the next band up. And if you are in the top band, then you may be able to claim free care – see the previous section.

In Scotland you should get £65 a week towards your nursing care and £145 a week towards your personal care – a total of £210 a week.

In Wales and Northern Ireland you will get a flat-rate contribution of £100 a week towards your nursing care.

If you can afford to pay all the cost, then you can of course choose the home you live in. If you will want any contribution from the local council then you will find there is a local limit on how much the home can cost. If you want to pay more, perhaps to choose a home you prefer or to pay for more than the minimum – a room of your own for example – then someone else such as a relative or friend can pay the extra for you without affecting the contribution from the local council. But you cannot pay this extra yourself, even if you can afford it – for example out of your savings.

Once you have taken off the flat-rate contribution towards your care, then your local council will assess your income and savings to see how much you should contribute to the balance of the fees and how much the council will pay.

The means-test
The financial assessment will look first at your income. That includes your state pension and pension credit, any earnings, and any other pension or regular income you have. However, the first £4.50 a week of any income on top of the state pension is normally ignored and the first £10 of a war pension is also ignored. If you have savings and you get interest or income from them, ignore that too.

If you have savings or capital of more than £19,500 in England, £20,000 in Wales, or £18,500 in Scotland, then you will not get help with your care or nursing home fees. On the other hand, if the amount is £12,000 or less (£12,250 in Wales) then your savings will not affect how much help you get. If you have between those two amounts then your savings will be converted into an income – between £1 and £30 a week depending how much you have.

These amounts are added on to your real income and you will be expected to put almost all of the result towards paying your fees. You will be allowed to keep any income that is ignored such as £10 of a war pension and £4,50 of other income and then a further £17.50 a week towards your personal expenses..

If you are married or have a joint bank account with someone, it is sensible to split it into two separate accounts. Otherwise your partner’s money will be partly taken into account.

Your home
Many people fear they will have to sell the house or flat they leave behind to pay for their care. But nowadays no-one has to do that.

The value of your home is ignored completely if your husband or wife still lives there. A partner you have lived with as if you were married counts as a spouse. The value is also ignored if another relative, even a distant one, lives there and they are either aged 60 or more or disabled. The value may be ignored if a long-term friend or someone who has cared for you still lives there.

If someone else owns part of your home then only your share will be counted. For example, if you gave one of your children half the home in exchange for them paying for major repairs (such as a new roof) then only the half you own will count – and it would be valued at the price a willing buyer would pay for a share in a home owned by someone else. That will be very little and could be zero.

However, if you gave away your home and one purpose was to avoid the means-test then the local council can ignore that gift and treat you as if you still owned it. So if you do give your home away – either all of it or just part of it – and carry on living there, make sure you give it away with no thought whatsoever that it will help you if you need to go into a care home.

Even if you own all your home and no-one lives there once you move out, you do not have to sell it. The local council will make what is called a ‘deferred payment agreement’ with you. The local council will pay for most of your care, though you will be expected to make ac contribution out of your income. In exchange, you agree to the bill being paid from the sale of your home after your death. No interest is charged while you are alive – and for 56 days after – so in effect you are given an interest free loan to pay for your care. Your heirs will then settle up after your death, and you may find that the bulk of the value of your home has been preserved for them. You could let it out or allow a relative to live there rent-free.

Even if you do decide to sell it, its value is ignored for twelve weeks from when you move into the care home.

Self-funders
If you pay your own fees in full, there are two things you can get which other residents cannot. Normally you will get Attendance Allowance. It is not means-tested – it just depends on how much care you need. You will get either £38.30 a week if you need care by day or by night or £57.20 if you need care from someone else by day and by night.

You can also get the winter fuel payment. For people in a home that is £150 if you are born before 22 September 1923 and £100 if you were born after that but before 22 September 1943. Most people in care homes do not pay all their own fees and do not qualify for the winter fuel payment. So anyone who does pay their own way should check that they get it. Call 0845 9 15 15 15 for more information.

All the amounts in this article are correct at February 2004 – most of them may rise slightly from April 2004.

Further information
Age Concern has a comprehensive set of leaflets about care homes and paying for the care you need. You can find them on its website or call 0800 00 99 66.
The Nursing Homes Fees Agency 0800 99 88 33 is an independent financial adviser which specialises is care homes and understands the way the system work.

February 2004


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