Long-term care in later life can be challenging, especially when considering how to fund it without impacting your home and loved ones. Planning ahead is crucial in understanding the potential costs and finding ways to manage them without resorting to selling your property.
Regardless of whether it’s you, your partner or an elderly relative who needs care, being well-informed can ease the decision-making process. With that in mind, here’s what you need to know about paying for care and how it affects your home.
Can you keep your house while receiving care?
If you, your spouse or partner, or other qualifying dependents choose to continue living in your home, you won’t have to sell it to fund care. Your home is protected as long as one of the following dependents lives in it:
- Your spouse or civil partner
- An unmarried partner
- A close relative aged 60 or over (or incapacitated)
- A close relative under 16 for whom you are legally responsible
- A single parent ex-spouse or partner
When might selling your home be necessary?
You may need to sell your property to cover care fees if you move into a residential care home with no qualifying dependents living in your property. If you can fund your care using other means, however, such as savings or private pensions, selling may not be necessary.
In some cases, selling your home could be the most viable option for managing the financial burden of long-term care. If the costs exceed your available resources, or financial assistance is unavailable due to exceeding asset thresholds, selling your property may become necessary.
Additionally, if the level of care required increases rapidly over time, leading to escalating costs, liquidating the value of your home can provide a means to cover these expenses and ensure the proper care is received.
How is governmental financial support for care determined?
A means test evaluates your financial situation, taking into account income, savings and other assets to establish whether you are eligible for support with care expenses. When determining your eligibility, the value of your home will be included if no qualifying dependents reside there.
That being said, if a dependent, such as a spouse or civil partner, continues to live in the property, the value of your home will not be considered, and the means test solely focuses on your other financial assets. This distinction can play a crucial role in determining the level of financial assistance you receive for care costs from the council.
What are the thresholds for financial help?
The thresholds for receiving financial assistance with care costs differ by region and directly influence the amount of support provided by your local authority. As your assets decrease and fall below the upper threshold, the level of financial help you’re eligible for increases.
It’s good to understand these regional thresholds to have a clear picture of the potential support available to you for long-term care expenses. Doing so will enable you to make informed decisions about your care options and the potential financial implications involved.
|Region||Asset value threshold|
|England||£14,250 – £23,250|
|Wales||£24,000 (for care at home) £50,000 (for residential care)|
|Scotland||£18,000 – £28,500|
|Northern Ireland||£14,250 – £23,250|
If you have less than the lower limit in the table above, the government will pay for your full care. if you have more than the upper limit, the government not assist. If you have assets somewhere between the lower and upper limit in the table, the government will assist somewhat.
Is it better to receive care at home?
Receiving care at home often makes you more eligible for financial help and keeps costs lower. Your home isn’t included in the means test, and you only pay for the care you need. Receiving care at home also reduces the risk of accidents or issues that could force you into residential care prematurely.
Can you gift assets to avoid care fees?
Attempting to transfer assets, such as your home or savings, to your children to avoid care fees is considered “deliberate deprivation of assets” and will still be included in the means test. A more practical approach is to continue living at home with the assistance of visiting carers.
Are your spouse or children responsible for your care costs?
Jointly owned assets with your spouse will be included in the means test, while assets solely owned by your spouse or children won’t be considered. Again, transferring assets to your spouse at the last minute is also deemed “deliberate deprivation” and should be avoided.
How can you best fund care?
Consulting an independent financial adviser (IFA) specialising in long-term care funding is crucial to determine the most effective use of your assets. They can guide you through the financial support application process and advise on the best way to fund your care based on your unique financial situation.
Understanding how funding works
Navigating the complexities of long-term care can be challenging, but understanding the key aspects of funding and how they impact your property can help alleviate some of the stress. Careful planning and professional advice are essential in making informed decisions that benefit both you and your loved ones.
To ensure the best possible outcome, follow these guidelines:
Assess your options
Determine whether receiving care at home or in a residential setting is best suited for your needs. Care at home generally provides more financial assistance and allows you to retain your home for a longer time.
Understand the financial implications
Familiarise yourself with the means test process, asset thresholds and how they impact your eligibility for financial support.
Safeguard your home
Be aware of the circumstances under which you can keep your home and leverage them to avoid selling it to pay for care.
Seek professional advice
Consult an independent financial adviser who specialises in long-term care funding to receive tailored guidance on paying for your care and managing assets.
Communicate with your loved ones
Discuss your plans and preferences with your family to ensure everyone is aware of your wishes and can provide the necessary support during the decision-making process.
Plan for the future
Consider the long-term implications of your care funding decisions and how they may affect your family’s financial situation.
Keep up to date with any changes in government policies or social care reforms that could impact your care funding options.
Selling your house fast
Following these guidelines will help you make well-informed decisions about your long-term care funding, preserve your property for future generations (if that’s your wish) and provide peace of mind for you and your family.
But, if you do need to sell quickly to help fund care home costs, we can help. Property Rescue specialise in buying homes fast and we’ll buy any home in any condition in as little as a week or two, so you have a cash lump sum in your bank to pay for the care you want. Get your free, no obligation offer for your home today.