This piece first appeared in The Daily Telegraph on 15 January  2000
The text here may not be identical to the published text

Selling the home to pay costs of home


care costs should be met in full

Anyone hoping to start the new century free of the threat of losing their home to pay for their care in old age is in for a disappointment. Despite a Budget surplus estimated at around £12 billion, the Government has made it clear that there will be no extra money spent changing the rules for funding care in old age until after the next General Election.

Health Secretary Alan Milburn announced before Christmas that the Government would not take any action until 2002/03 on recommendations made last March that the cost of nursing care should be free to anyone who lived in a residential care and nursing home. He was speaking to Parliament in December about the recommendations of the Royal Commission on Long Term Care for the Elderly which said in March 1999 that the Government should spend around £1 billion a year to meet the cost of nursing care for people in residential homes. Mr Milburn told MPs "We have already set out spending plans for the three years to March 2002." In other words, no money until after that and then later this year plans for the next two years to 2004 would be announced and "improving the care of older people will be an important element of the Department of Health's input into the spending review."

But Sheila Scott, chief executive of the National Care Homes Association, told The Daily Telegraph that the Government did have the money now.

"It could come from the Chancellor's war chest, the budget surplus. We care for the frailest and most vulnerable people. We believe the public supports the view that healthcar for this group should be free and if they support that then the money should come out of taxation."

There are around 500,000 people currently in nursing and care homes and the Royal Commission said that they should all be given the same free nursing care they would get if they were in a hospital. Other costs - the so-called 'hotel charges' of food and lodging - would be paid by the residents if they could afford it. But the means-test that currently applies to their capital - including the value of an empty house or flat - would be much less severe. The current limit on capital is £3000. Any more than that and help with the cost of fees is reduced and disappears altogether for those with savings or capital over £16,000. The Royal Commission wanted that limit raised to £60,000. At the moment an empty home - and sometimes an occupied one - normally counts as capital and can prevent the owner getting any help with care fees. Sheila Scott says this leads to a widespread fear that the home will have to be sold to pay the bills.

"For most older people it has been a struggle to pay for their home. They are naturally disturbed that it may have to be sold to pay for care that they expected to be free, paid for through tax and National Insurance throughout their lives."

And agencies that advise older people are finding that job is almost impossible with the Government itself still unclear about what it will do. Mervyn Kohler is Policy Director of the charity Help The Aged

"Every day people are having to make agonizing decisions about paying for care. And this leisurely timetable heading for 2003 is unacceptable. How do we give advice when we havenít got the foggiest idea what the Government is planning and won't know for three years?"


HANG ONTO YOUR HOME

With the Government committed to doing nothing for the next two financial years and possibly longer, people who need care - or may do so - should take steps now to protect their home from being exposed to the means-test for care costs.

Three ways to get the value of your home ignored:

Finally, remember that the local authority cannot make anyone sell property. If someone in care has an empty property, the council will still pay the bill - but it will take a legal charge on the property so that when the elderly person dies and the house is sold, the local authority gets paid out of the proceeds. But that can be a good idea. The home can be rented out - and with current rental values that could pay for all or most of the bill, especially as no interest should be added to the debt while the person remains in care.

15 January 2000


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