Could your parent lose their house to care home fees?
Residential care fees
A year or two ago,and having reached the grand age of 85, my dear mother was diagnosed with Alzheimer’s.
Despite the diagnosis, she seemed reasonably ok at first – a little confused on occasion but still the same good old supportive Ma.
But as time has passed, Ma’s increased confusion has become more apparent and relatively simple tasks such as making the tea and cooking meals are now something of an uphill struggle.
None of her four children, including me, were at all prepared for this.We always took it for granted that our mum was going to be there for us always and would live forever! It’s easy to delude yourself when it’s painful to confront reality.
Things took a turn for the worse and started to bring things home to us at the start of this year when she fell down a step and ended up hospitalised for a week with a fractured hip.
On arriving back home, she could still hardly walk unaided and we realised that it was high time we researched into options for her care.
The first thing we looked into was what the costs of a place in a care home are likely to be and what funding there is to pay for it.
Although not perhaps necessary right now we realised that we didn’t have a clue what was involved.
Would she have to sell her house to pay for the care home?
So I did some research – and what I discovered came as a bit of a shock.
Firstly, in our part of Essex, the lowest weekly fee for a residential care home is about £650. And these aren’t homes I would like her to live in. The ones that I would consider more appropriate for her needs charge more in the region of £1,000 per week. That’s £52,000 a year. Net!
Like many people of her age, my mother has over £23,250 in savings.
And if you have over this level then you won’t get a penny from the government towards residential care home fees.
So we face a stark choice. When my mother reaches the point in life where she needs a place in a care home, she will have to use all her remaining savings and sell her house to fund it.
While the house is being sold, the local authority will fund her residential place – but would then look to claw it back from the proceeds of the house sale.
To add insult to injury,once the local authority does step in, she would also have to forfeit all her earned income and lose her Attendance Allowance – a non means-tested benefit of £55 a week that currently covers some of the costs of her care.
In other words, the need for residential care in a home could result in all her capital and assets evaporating fast at some £52,000 per year.
Can you avoid selling your parents’ home?
I looked for ways to avoid having to sell my mother’s home, but the sad fact is that there is likely nothing we could do if she did need to go into residential care.
Some people have tried transferring houses or assets into ‘Wealth Preservation Trusts’. These are designed to hold assets on behalf of named beneficiaries – usually children.
The problem is, that once you do this, your local authority can (and almost certainly will) claim this is ‘deliberate deprivation’ of assets. And then you are back to square one – having to use the proceeds from the house to pay for the care.
In order to be effective, any steps that can be taken to plan for this scenario would generally need to have been implemented many years in advance, before the need for care existed.
Is residential care the only or best solution?
After weighing up all these factors, my family and I looked to see whether it would be possible to find a way of getting my mother the right care in her own home.
All of us are very hands-on and happy to help each other care for Mum but we all work and have our own lives to lead.
To make this process easier to plan, we created a special shareable Google calendar so we can all see who is going to be with my mother, and when. I then linked the calendar to my Amazon account and bought her an Amazon Alexa. Now, as well as have it play her favourite Rod Stewart, it can also tell her who’s coming round. All she has to remember is to say the magic word“Alexa” and it will read the entries we put on her calendar back to her.
Initially, whilst Ma was recuperating, we found and engaged one of those outsourced care companies.
They offered to visit three times a day and charged £12.50 for each half hour.
But the carers would often come for only 10 minutes or less. It was clear that they had either been tasked to carry out far more visits than they could ever hope to get through if they spent the allocated 30 minutes with each client or they were looking to get home early!
When I brought this up with the care company and offered to pay them for the time they had actually spent, they acknowledged the grievance, accepted my offer and then duly cancelled the contract. Basically it seems to be take what they offer or sling your hook, as they already have more work than they need.
Our next step was to look to use carers from among known friends, acquaintances supported by the family who can give a good level of care and allow her to continue living at home for as long as she is able. That’s not only what she would want but also seems to be by far the most cost effective option.
So, my advice is – unless your parents don’t own their home and have less than £23,250 in savings and investments – leave it as long as you can before finding them a place at a residential care home.
Whilst care in your parents’ own home does remain viable, there are ways to pay for and help deliver quality care whilst also keeping costs down.
Not only is the £55 (or £85) a week Attendance Allowance available to those who have reached the point where they need help you can also apply to our local authority for full exemption to Council Tax.
Yes, Mum doesn’t pay any Council Tax at all.
The blue badge scheme also helps with parking provided you always remember to pick the darn thing up off the kitchen table and take it with you as,rest assured, Mum definitely won’t! And don’t forget to take the little blue clock thingy along as well as the badge doesn’t work without it!
Of course, you have to make your decisions on the basis of your parent’s health. Some people will have conditions or dementia that has advanced to the point where it is unsafe for them to remain at home.
Once you reach the point where it’s no longer possible to properly care for your parents in their own home, you know their assets are going to be depleted at an alarming rate on care home fees.
So if there is a way of helping them keep their independence in their own house, I recommend exploring it – far better that than to have them lose everything they have built up after a lifetime of hard work.
Contact THP today
Finally a reminder that we have our own legal services department at THP now headed by Ian Henman – our Barrister Intermediary.
So if you need any help and advice in connection with anything related to Wills or Estate Planning or need to have a Lasting Powers of Attorney drawn up (as I did with Mum a few years back) then don’t hesitate to get in touch for a friendly chat.