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One of the most important aspects of funding residential care is knowing and understanding the value of your property.
A 12 week property disregard aims to give you or your loved one enough time to decide how your property will help fund any future care home costs.
Here, we’ve explained exactly what a 12-week property disregard is, what counts as property and what happens after the 12 weeks are up. We’ve also answered a handful of frequently asked questions surrounding this topic.
We’d recommend you seek independent advice from an expert before making any major financial decisions.
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As the name suggests, a 12 week property disregard refers to the first twelve weeks of somebody receiving residential care funded by the local authority.
When it comes to funding the cost of care, some people require local authority support while others have enough money to self-fund. Often though, this money isn’t simply available as cash that can be easily withdrawn. Instead, it could be tied up in a sizeable asset such as a home.
If you’re eligible for a 12 week property disregard, the value of your property won’t be counted in a financial assessment, meaning the local authority will pay for your care.
You might be entitled to a 12-week property disregard (for the first 12 weeks of permanently living in a care home) if the amount of money you have is below the upper capital limit (more on this later) and you own the home you currently live in.
During a financial assessment carried out by your local authority, you’ll be informed whether or not you qualify for a 12 week property disregard.
Whether or not the local authority will contribute towards your care home fees depends on the total value of your savings and assets. If this value exceeds the upper limit, you’ll typically have to pay the full cost of care.
However, if your savings and assets fall below the lower threshold, your local authority may fully cover the cost of care. If your savings and assets fall somewhere in between these two thresholds then you’ll likely qualify for partial funding.
Here are the UK savings thresholds for care home fees in 2022/23:
Upper threshold: £23,250
Lower threshold: £14,250
Upper threshold: £32,750
Lower threshold: £20,250
Upper threshold: £50,000
Lower threshold: N/A
In Wales, there is only an upper limit. If your savings and assets are worth less than £50,000 then you’ll receive the maximum support from your local authority regardless.
Upper threshold: £23,250
Lower threshold: £14,250
If your assets exceed the upper threshold (so £23,250 in the case of England), you’ll have to self-fund all care costs. If your savings or any other liquid assets (things that can be easily converted into physical money) are below the threshold and you plan on selling your property to fund care costs, the council will disregard its value for the first 12 weeks of your care home placement.
Once your local authority has disregarded the value of your property and your total assets are below the upper limit as a result, they’re then obliged to pay your care costs for the 12 weeks. If your home is sold within 12 weeks, they’ll pay until the sale goes through.
If your local authority pays any money towards your care costs during the 12 weeks, you don’t need to pay this back.
What happens after the 12 weeks depends on whether or not you’ve managed to sell your property. The council will check back over your finances to see if your situation has changed. If you managed to sell the property during the 12 weeks, the disregard will have ended on the date of the sale.
If you didn’t manage to sell the property, whatever your home is worth could be included when another financial assessment is carried out. You’ll then have to pay the full cost of care (though other options like applying for a Deferred Payment Agreement are also available).
If you or your loved one owns a property aside from your home, its value will be taken into account once you enter a care home. If this property is worth more than £23,250, you’ll have to pay the full cost of care fees.
In some cases, it’ll make financial sense from a financial perspective for you not to take a property disregard, such as if you have a high weekly income.
Your property’s value won’t be taken into consideration while it remains the home of any of the following:
Aside from these circumstances, the value of your home will nearly always be taken into account once the 12-week property disregard period ends. If your home is jointly owned, the value of your share will instead be taken into account (rather than the total value of the property).
Lottie matches care seekers with the best care homes for their needs. You can request a free care home shortlist from our care experts, who will share homes matching your budget, location and type of care needed. You can also search for a care home through our easy-to-use directory.
A property is any building, accommodation or land that you own or partially own. A property usually refers to somebody’s home. However, this can also include things like a house lived in by someone else, a commercial property or a holiday home.
This is something we wouldn’t recommend doing. Knowingly giving your property away or selling it for below its true value to try and avoid paying the full cost of fees will likely lead to you being charged as if you still own the property. This is known as a deprivation of assets.
There are several other ways to fund care if you don’t want to sell your property. Some of the most common examples include applying for a deferred payment agreement, renting out your home to raise money or having family and friends contribute towards care costs. Other options include equity release schemes, home income plans, taking out a loan or taking out an annuity.
A top-up fee comes into play when the care home you or your loved one wish to live in charges more than what the local council or authority is willing to provide. The difference between these two amounts is called a top-up fee. You can repay this yourself, or a family member, friend or another third party can do so. During a 12-week property disregard, you can arrange to pay the costs of a top-up once your property has sold.
Written by our team of experts and designed to help families fund later life care in England.