If 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, the Local Authority will usually carry out a financial assessment of your assets, income and expenditure to find out whether they will assist with your care home fees. This is separate to the Continuing Healthcare funding assessment.
If you only require temporary or respite care 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.
Does my home have to be included in the financial assessment?
If you move permanently into a care home, there are certain conditions where your home will not be included in any financial assessment and will be disregarded.
Your home 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 your home is occupied by another relative, your home may also be disregarded. It depends on how old your relative is, whether they have a disability, whether they are dependent on you, whether they have been caring for you, and possibly how long they have been living there.
What is the 12-week property disregard?
In the first 12 weeks of any permanent admission into a care home, the value of your home must be ignored in the financial assessment. If your stay was initially temporary, the 12 weeks run from the date it is decided your care home place becomes permanent.
A local authority must also allow a 12-week property disregard if another property disregard ends, because, for example, a previously qualifying relative dies, or moves into a care home.
What happens if I jointly own my home?
So long as the joint owner of your home remains living in the property then it will be disregarded for the purpose of the financial assessment.
However, if the joint owner is not the spouse/civil partner or is not occupying the property as their main or only home, it is important to take legal advice, especially in the following situations:
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The local authority takes the value of your property and divides it by the number of joint owners.
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The local authority offers to be the willing buyer of your share in the property.
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The local authority argues that any willing buyer would be able to force a sale.
Is there an alternative to selling my home?
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.
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, a professional valuation should be obtained by the Local Authority.
The law surrounding the funding of care is complicated. It is sensible to speak with an expert in this area before you agree any conditions with the local authority and/or sign a care home contract.
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