Care home fees are estimated to be around £30 k to £40k per year, per person. While some individuals are able to afford this expense due to their savings or capital, others may not be able to. For homeowners with little to no savings, their house becomes their means for paying for care home fees; either by renting it out and using the rent to pay for expenses or by selling the property. However, individuals with little to no savings or capital (as well as no property in their name) will have to rely on the state to take care of them in the best way possible.

How To Avoid Selling Your Home To Pay For Care?

If someone is not willing to sell their house, there is an option of Deferred Payment Agreement according to which the homeowner signs a formal agreement with their local council. The local council agrees to bear the entire care home expense of the claimant until they are ready to sell their house or the property is sold after the death of the claimant. 

Sometimes it is advisable for individuals on low income to consider their situation and make a decision whether they will be better off staying home and receiving care (as well as state benefits) or will they be taken care of better in a care home facility. In such cases, they may consider applying for any of the following options:

  • Attendance Allowance 
  • Personal Independence Payments

Attendance Allowance is a tax-free state benefit applicable to those individuals who have surpassed the state pension age and require supervision due to their health condition. It is aimed towards providing a monthly allowance to those individuals who need assistance with meeting the extra costs of a disability or the support of a carer due to old age.

PIP (Personal Independence Payment) is a benefit intended for people aged 16 years and above; aimed to cover the additional daily costs of living with a long-term disability or illness; be it a physical or mental health condition. It is gradually replacing DLA (Disability Living Allowance).

Claimants may be able to receive a premium on the following benefits as well if they are eligible for PIP:

  • income support
  • jobseeker’s allowance
  • working tax credit
  • employment and support allowance 
  • pension credit 
  • housing benefit

While some people consider gifting their house and property to children before they move into care homes, this is not a very feasible idea. One cannot intentionally avoid paying care home fees altogether. Once the local authorities find out about this, it will be considered as deprivation of assets and they can legally reclaim your assets from those that you’ve gifted them to.

To learn more about care home fees, we will discuss the following topics in this article:

  • Who Is Eligible For A Deferred Payment Agreement?
  • Can I Apply For Attendance Allowance or PIP?
  • Can Council Take House To Pay For Care?
  • How Much Savings Can You Have Before You Have To Pay For Care?
  • Who Pays Care Home Fees?
  • How Are Care Home Fees Paid For?

Who Is Eligible For A Deferred Payment Agreement?

If you want to check your eligibility for the DPA scheme, below is a list of key criteria to be met:

  • your savings and capital are less than £23,250 
  • you have no other funds to pay for care home expense
  • you are a homeowner or are able to offer any other asset as security
  • in case of your home serving as security, it must be unoccupied

In addition to the care home facility, if the claimant needs medicines or general health care, the NHS will be willing to fund both for them under the NHS Continuing Healthcare. To qualify for this scheme, the claimant should have ongoing physical or mental health needs. In certain cases, the NHS may also pay a flat amount for the nursing care of the claimant.

Can I Apply For Attendance Allowance Or PIP?

Attendance Allowance is a tax-free state benefit applicable to those individuals who have surpassed the state pension age and require supervision due to their health condition. It is aimed towards providing a monthly allowance to those individuals who need assistance with meeting the extra costs of a disability or the support of a carer due to old age.

There is a general myth about Attendance Allowance that it may not be applicable for individuals who have means of earnings and may either be receiving wages or pension. However, it must be noted that this is not a means-tested benefit; which makes it unrelated to any source of income or savings that the recipient may have. 

If the recipient of the Attendance Allowance has a carer looking after them, their carer becomes eligible for Carer’s Allowance. However, the following additional conditions must be met as well: 

  • the person under care is a recipient of Attendance Allowance
  • the carer spends at least 35 hours per week taking care of the recipient
  • the carer’s income after tax is less than £128

PIP (Personal Independence Payment) is a benefit intended for people aged 16 years and above; aimed to cover the additional daily costs of living with a long-term disability or illness; be it a physical or mental health condition. It is gradually replacing DLA (Disability Living Allowance) by providing recipients with: 

  • extra money in addition to their prevailing benefits 
  • a reduction in their Council Tax or Road Tax bills 
  • discounts on travel

Can Council Take House To Pay For Care?

No, the council will not forcefully claim your house to pay for care especially if it is in use of your spouse/partner or any qualifying dependant(s); which include the following:

  • spouse/civil partner/unmarried partner
  • a close relative over 60 years of age
  • a close relative below 16 years of age (legal dependant)
  • former spouse pr partner if they are a single parent

If a homeowner moves into a care facility indefinitely and there is no claim on the residence of their house (this means that there is no family member or a qualifying dependant living in their house) the council may then seek sales of their property. However, this too doesn’t take place on an immediate basis. Yet, in such situations, the homeowner may not qualify for care costs to be taken care of by the council. 

Care costs are means-tested. This means if someone needs care but is unable to bear the expenses the council takes care of them. This is a decision taken after a detailed financial assessment of the eligible individual, their income, savings and property. To learn more about when the council might pay for your social care you may want to research on your own prior to making a decision.

How Much Savings Can You Have Before You Have To Pay For Care?

If you are a UK resident, the amount of savings you can have before having to contribute towards care home fee depends on whether you live in England, Wales, Northern Ireland or Scotland. Below is the threshold for each country:

  • England: £23,250
  • Wales: £50,000
  • Northern Ireland: £23,250
  • Scotland: £28,750

Anyone who holds savings above this amount will have to contribute towards their care home fees until their savings fall below this threshold. When that homes, claimants will be able to receive financial aid from the state through their local councils. 

The following criteria will be applicable in this case:

  • If someone has savings over £ 23,250, the claimant will have to bear the entire cost of the care home fees
  • If someone has savings of £14,250–£23,250, the claimant will have to contribute most of their weekly income towards care home fees. They will also pay an assumed extra amount of £1 per £250 of capital that they have
  • If someone has savings below £14, 250, the claimant will not be required to pay for their care home fees from this amount and will have to pay from their weekly income. 

Additionally, claimants are permitted to keep a weekly allowance of £24.90 per week for themselves before paying for the care home fee. People who are on pension credit will be allowed an additional weekly amount of £5.75.

Who Pays Care Home Fees?

Care home fees can be borne by the state, partially or wholly, depending upon the circumstances of the claimant or they may be self-funded, partially or wholly by those in care. According to estimates, nearly half a million people in the UK need a care home facility, Out of these 50 per cent of care home residents are self-funded while the rest of them are state-funded.

The amount that one pays towards their care costs depends on  whether they live in England, Scotland, Northern Ireland or Wales (each country has their capital thresholds that determine the claimant’s contribution as compared to that of the state) as well as the following financial aspects of the claimant:

  • income 
  • savings 
  • investments
  • property 

How Are Care Home Fees Paid For?

Care home fees may be funded by either of the following means:

  • Self-funded
  • State-funded

In case of self-funded care home costs, the claimant either has income, savings or capital that contribute towards the expense or they may sell or rent out their house to pay for care home bills. Individuals on a low income, low savings or those claimants who do not own a property or those who may not be able to generate sufficient funds from the sale of their house may consider staying in their house and claim Attendance Allowance.

If the state is funding your care home fees, it will be routed through your local council and your benefits such as state pension and pension credit will be used to cover the costs. If you have capital below £23, 850, the state will bear most or in some cases all of your care home expenses.  

For more funding options click here how to avoid selling your house for care home fees

Conclusion:

Care home fee is undoubtedly one of the major expenses that elderly residents face and that too at a time when incomes are practically non-existent and their savings or state pension are their financial cushion. However, there is no way to deliberately avoid paying for care home fees and even if one tries to make an attempt at this by gifting their property to relatives, it can always be reclaimed by local authorities.

Therefore, if the purpose is to avoid selling your home to pay for care home fees, it is advisable to either maintain savings from an early age to budget for such circumstances or consider staying at home while appointing a carer.

The good news for claimants is that according to a recent announcement by the UK Government, with effect October 2023 nobody will have to pay more than £ 86,000 as care home fee. Once they have paid the amount, the remaining expense will be borne by the state and funded through their local council authorities.

FAQs: How To Avoid Selling Your Home To Pay For Care?

Can I put my house in trust to avoid care fees?

While you may put your house in trust to avoid care fees, not only will you lose a major part of your capital but there is no guarantee on the authenticity of many trust schemes. Therefore, this may prove to be a serious risk just to avoid paying care home fees.

Can the state take your house to pay nursing home?

No, the state will not forcefully claim your house to pay for the nursing home fee especially if it is occupied with a spouse/partner or legal dependant. They will also not claim your house to pay for care fees while you are living at the care facility. It is only after the death of a care resident that their empty property is claimed by the state to cover the expense of the deceased’s care home fees.

Do you have to sell your house to get care?

No, you don’t have to necessarily sell your house to get care especially if you are a temporary resident. Even in the case of being a permanent resident, local authorities will carry out a detailed financial assessment of your savings and capital. Should your savings suffice to pay for your care home (whether in whole or partially) there will be no need to sell your house. It is only in case of lack of savings or your choice to opt for a deferred payment through the sale of your house once you are no longer there, that the state will claim to sell your house.

Can I gift my house to my son to avoid care costs?

While there is no legal restriction on gifting your house to your son just to avoid care home fees, there is something ethically wrong with deliberately avoiding paying for an old-age benefit when you can afford to. Also, in certain cases, when local authorities have found such incidents to take place close to care home claimant’s transfer to the facilities, they have been able to claim this as a deprivation of assets and reclaim the property to pay for the residents’ care home fees.

How do I protect my inheritance from a nursing home in the UK?

While it may not be ethically correct to deliberately avoid paying for nursing home fees, many people choose to appoint trustees (usually family members) to manage the trust under which their inheritance, savings or assets are placed. 

References:

AVOIDING CARE HOME FEES IN 2021 | Tips on what to do!

Who Pays for What in 2021/22? – carehome.co.uk advice

Paying care home fees | Social care means tests

Paying for your own social care (self-funding)

Paying your own care costs if you’ve used all your savings

How To Avoid Selling Your Home To Pay For Care…

Paying for permanent residential care | Paying for a care home

When the council might pay for your social care

Attendance Allowance

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