The decision to move into a care home isn’t an easy one to make. It can be both emotional and stressful. And with the average care home charging £32,344 a year, it’s natural to worry about your finances as well. But if you’re thinking of avoiding care home fees altogether, there are some things you need to know.
Are you eligible for help with care home fees?
The good news is that your local authority (the council) can help you with care home fees. The bad news is that they’ll only help if the value of your assets and savings is below a certain point:
- If you own more than £23,250 in assets and savings, you’ll need to pay your own fees. That’s for England and Northern Ireland – the threshold is £40,000 in Wales and £27,250 in Scotland.
- If you own less than £23,250, they council will help a little, depending on how much you have. The council will base the help they offer on their assessment of your finances.
- If you own less than £14,250, you won’t have to use your savings to pay fees. But the council will ask you to contribute some of your weekly income. You’ll still have a Personal Expenses Allowance of £24.90 per week, at least.
If you own a home, it’s usually considered part of your savings – making it likely that you’ll have to pay for your care yourself. But there are exceptions, such as if a spouse or an elderly relative is still living there full-time. If you’re arranging social care at home, the council won’t include your house in their assessment.
Are there ways of avoiding paying for care homes?
With the system being what it is, you might be wondering if there’s a way of avoiding care home costs by giving your savings and assets away, so that your financial assessment won’t count them.
No such luck. When the council take a look at your finances, they’ll keep an eye out for signs that you’ve tried to avoid the fees. They call this ‘deliberate deprivation of assets’. Things that can count as deprivation of assets include:
- Large payments to someone else, perhaps as a gift
- Suddenly spending more money than you usually do
- Making a large, one-off donation to charity quite recently
- Splashing out on items that count as personal possessions – such as jewellery
- Transferring ownership of your home to someone else, like a friend or relative
- Putting your assets or funds into a trust that prevents their use for care home fees
- Buying an investment bond with life assurance
- Selling something you own for less than it’s actually worth
If it looks like you’ve been deliberately avoiding nursing home fees using the methods above, the council can treat you as though you still own the assets or funds you handed over. If you can’t access the funds now, they can’t refuse you care, but they can limit it to home visits. They may also try to claim the care home fees from the person you gave the assets to.
What if I wasn’t deliberately avoiding care home fees?
When deciding if something you did counts as deliberate deprivation of assets, the council will consider:
- Whether your intention was to avoid paying nursing home fees
- If you did it before you could have known you’d need to pay for care one day
- Whether you were aware you would likely need to pay for your own residential care when you did it
Once they’ve made their decision, they’ll give you a chance to prove that you didn’t set out to avoid paying nursing home fees. But they don’t have to accept your explanation!
What about putting your house in trust to avoid care home fees?
One of the things many people worry about in this situation is having to sell their home to pay for their care. This can make the idea of putting the property in a trust – so that you no longer own it, but can keep living there rent-free – appealing. Theoretically, this can keep the council from including your home in their financial assessment.
Be warned, however: putting property into a trust to avoid care home fees isn’t foolproof. Local councils are aware of this strategy. If they think that you’ve put your house in trust to avoid care fees specifically, they will include it on your financial assessment. That said, if you did it while you were fit and healthy, they will likely struggle to prove this.
For more information on avoiding care home fees and taking care of your home, there’s a useful guide by Independent Age here.
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