If you have been told that you need to move into a care home but you do not have a primary health need and are therefore not eligible for NHS continuing healthcare funding, the value of your home may be taken into consideration to pay for care.
Before you move into a care home, you will usually have a financial assessment by the local authority to find out whether they will contribute towards your care home fees. This is separate to the continuing healthcare funding assessment.
If you only require temporary or intermediate care, your home will not be included in any financial assessment by the local authority. If you do require full-time care but are remaining in your own home then, again, the value of your home will not be included.
The rules regarding the equity limit of a property and how much can be deferred against the security of the property can be complicated. Where the valuation of a property is disputed, professional valuation should be obtained by the local authority.
Does my home have to be included in the financial assessment?
Where you need to move permanently to a care home, there are certain conditions where your home will not be included in any financial assessment and will be disregarded.
It will be disregarded if you continue to live in it while in receipt of a package of care. If you have to move to a care home and a qualifying relative remains living in the property, it will also be disregarded. There are various classes of relatives in respect of whom a mandatory disregard should be applied:
your partner or former partner, unless they are estranged from you
your estranged or divorced partner if they are also a lone parent
a relative who is aged 60 or over
a child of yours aged under 18
a relative who is disabled
Am I entitled to a 12-week property disregard?
In the first 12 weeks of any admission to permanent care, the value of the home must be ignored. This disregard can apply long after the original admission date if the initial admission was temporary. It should be applied for 12 weeks when the resident has used up other ‘liquid’ assets but before the value of their home is taken into account.
It is always important to consult a legal advisor regarding the rules around mandatory property disregards.
What happens if we jointly own our home?
As long as the joint owner of the home remains living in the property then it will be disregarded for the purpose of assessment.
However, if the joint owner is not the spouse, there are other qualifying criteria. It is always important to discuss these further to see if the share of the property owned by the person in care will need to be taken into consideration.
What is the alternative to selling my home?
Deferred payment agreement
If you have moved into a care home and do not want to sell your property, you may enter into a deferred payment agreement. This is a type of loan. It may be appropriate where the local authority cannot disregard the value of the family home and you lack sufficient funds to pay the weekly care fees.
The local authority may charge a set-up fee to set up a deferred payment agreement and can also charge interest on the amount that is owed to them. It is usual for 90% of the value of the home to be preserved for the payment of care fees. However, in practice, many local authorities will set a limit of between 70% and 80%.
It is always important to establish whether the property can be disregarded before entering into such an agreement. A deferred payment agreement should always be offered when the property cannot be disregarded and the person has less than £23,250, excluding the value of the property.
Interest is discretionary and the scheme is intended to be cost-neutral. Interest will be added to the deferred payment agreement loan figure on a compound basis and replaced by a higher rate if the debt is not paid off within specific time scales after death. Administration charges can also be added.
Do you need help and advice with funding issues?
You may think you can gift or dispose of your house to reduce the amount you need to pay for care. It is important to remember that you cannot deliberately avoid paying for care home fees.
To find out more about whether you do need to sell your house to pay for care or whether you may be eligible for funding, contact our Funding Care Team who will be happy to help.