Paul Lewis Writing Archive - Saga Magazine

I first wrote an article under this title in Saga Magazine in 1994. The detailed rules have changed in those 16 years but the principle has not. No-one has to sell their home to pay their residential care fees if they are determined not to do so. Some may be told they have to. Others may choose to. The latest analysis of what figures we have shows that about 19,000 people a year may make that choice. But none of them should have been forced to do so. Despite that, politicians and newspapers frequently get the numbers and the law wrong and claim 45,000 people a year are forced to sell the family home to pay for their care in old age. It is not true. (See box below for the details).

Step I: NHS coughs up
If you have a need for continuing care which is primarily to do with your health or a medical condition rather than advancing years or frailty then the NHS may pay the full cost of your care. New guidance in England called the National Framework should make the process clearer and help more people get their care paid for in full by the NHS. In England the decision is made by the Patient Care Trust, in Scotland and Wales by the Health Board and in Northern Ireland by the Health and Social Care Trust.

Step II: Someone lives in the property
If the NHS cannot or will not pay for your care then the social services or care department of your local council (or the health and social care trust in Northern Ireland) has a duty to assess you and provide you with care. It will also assess your income and capital. If your capital exceeds £23,250 (£22,750 Scotland, £23,250 Northern Ireland, £22,000 Wales) then you will be expected to pay for your care home fees in full. ‘Capital’ means your savings, investments, and property (but not possessions such as jewellery or valuables). Fortunately the value of the home you lived in can often be ignored.

Its value is always ignored if your spouse or partner still lives there. So if you have a husband, wife, civil partner or someone you lived with as a couple then the value of the home is ignored while they still live there. If at some point they want to downsize or move then the value of your half can be counted as your capital. But if you use your share of the money to assist them to buy somewhere suitable it should not be. If it is, then see Step III for how to defer those payments.

The value is also completely ignored if any relative aged 60 or more, or who is disabled, lives in it. This concession extends to 28 different categories of relation including cousins, in-laws, step-relatives, and their spouses and partners.

The value of the home may also be ignored if a younger person or an older non-relative lives there. This exemption is discretionary and any particular authority may choose to ignore it. But it is likely to accept it if, for example, the person has been acting as a long-term carer.

The value of the home is always ignored completely – even if empty – for 12 weeks after the resident goes into the care home or later seeks financial help.

People often wonder if they can evade the rules by giving their home to one of their children. If you do that in the six months before you go into care then the authority can treat the property as if it was still owned by the resident. Longer than that and it has to rely on rules about ‘deliberate deprivation’ of assets. As long as the share of the home was given to the children with no thought of avoiding care home fees and some years before they were needed then the value should be ignored. This will not work for avoiding inheritance tax which has different rules.

Step III: defer the debt
If there is no way to get the value of the home ignored, there is still no need to sell it to pay for care. Since 2001 every local authority should offer what is called a deferred payment agreement. Instead of paying the fees, they are deferred and the bill mounts up week by week. The authority takes what is called a ‘charge’ on the value of the property so that when it is sold – usually after the resident’s death – the fees are paid from the proceeds. No interest is charged on this growing debt until 56 days after the resident dies. Meanwhile, it may be possible to rent out the property or for a younger relative or friend to live there, perhaps in exchange for doing it up.

Some local authorities do not offer deferred payment agreements even though they were given money to help them start the scheme. In 2009 the Department of Health warned that if English authorities refused to offer the agreements at all “it is likely the courts would find this to be unlawful.”

If an authority persists in refusing a deferred payment agreement then the resident can simply refuse to pay the fees. The authority still has the duty to provide accommodation. And all it can do is to take a charge against the value of the property to recover the money owed when it is sold. Those rules are set out in a law passed in 1983. No interest is charged on the debt until the day after the resident dies.

If the home is jointly owned with someone else then the local authority may not be able to put a legal charge on it. Instead it can only put on a ‘caution’ which means it will be told when the house is sold but will have to go to court to recover any debt.

Why not pay?
Although you can avoid selling your home to pay for care, should you? My neighbour Martha – not her real name – had inherited the house she lived in for most of her life. In her eighties and alone she became less and less mobile despite two hip replacements. Other medical problems followed. Rather than go to social services – who had provided meals and care for her for some years – she sold her house and used the proceeds to pay the fees for a nice room in a friendly care home by the sea near her few remaining relatives. Before the year was out she died. She had spent less than one twentieth of the value of her home to buy herself exactly the care she wanted in her last days.

Martha had no children. But most would support a parent’s decision to use the value of their property to get the best care. Although local authority funded homes will usually provide decent care, rooms may be small, without a view, and shared with a stranger. The bathroom may be down the corridor. That is why many people use their own resources to get the home of their choice with the facilities to make them comfortable. People who pay the fees themselves – even under a deferred payment agreement – can claim attendance allowance of up to £71.40 a week. Everyone who needs nursing care can get a contribution towards that of £108.70 (£100 NI; £71 Scotland; £119.66 Wales) from the NHS. In Scotland £156 a week is also paid towards personal care (but not on top of attendance allowance).

Further information
First Stop 0800 377 7070 www.firststopcareadvice.org.uk
www.dh.gov.uk and search for ‘Charging for Residential Accommodation Guide 2010’. Similar rules are used in Scotland, Wales and Northern Ireland.

How many sell their home to pay for care?

Politicians of all parties have said that more than 40,000 people a year are ‘forced to sell their home’ to pay for their care. They have misunderstood an analysis put together by the House of Commons library in 2009. It took the annual survey by Laing & Buisson of the elderly people in a care home. In 2009 there were 380,000, of whom 155,000 did not have their fees paid by the NHS or the local authority. Laing & Buisson assumes they therefore pay for themselves. A separate Department of Health survey from 2001 found that 30% of self-funders had in fact sold their home before going into care to pay the fees. Applying that percentage from 2001 to the 2009 figures gives the result that about 48,000 elderly people in care had sold their home to pay for it. That is the figure which politicians and others use as the number ‘forced to sell their home every year’. (Sometimes they say 45,000 based on Laing & Buisson figures from a year earlier). However, those 48,000 people entered their care home at various times in the past. So to get the number who had sold per year the total has to be divided by the average length of stay in a care home which is two and a half years. That reduces the number who sell per year to 19,200. Laing & Buisson has told me that analysis is correct. And remember even that figure is for people who sell their home to pay for care - not those who are forced to do so. Some - like Martha who would be in those figures - may have chosen to do so for good reasons. The researcher in the House of Commons library who did the initial analysis warned “these estimates are very crude approximations and should be considered with caution.” Not something politicians are very good at doing.