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Fees & Funding > What Does 12 Week Property Disregard Mean? What Happens To My Home?

What Does 12 Week Property Disregard Mean? What Happens To My Home?

Sway Place care home in Hampshire

When it comes to funding residential care, there are several aspects to consider, one of which is the value of yours or your loved one’s property.

This is where the 12 week property disregard comes in - the purpose of which is to provide enough time to decide how your property will help you fund any care costs in the future.

Here, we’ve explained exactly what a 12-week property disregard is, what happens after the 12 weeks are up, what counts as property and several other queries you may have.


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In this article on the 12 week property disregard:

  1. What is a 12 week property disregard?
  2. How does it work?
  3. How much will the local authority pay?
  4. Can I go into a home that charges more than the council will pay?
  5. What happens after the 12 weeks?
  6. What counts as property?
  7. Will my property be taken into account?
  8. What happens if I give my property away?
  9. What if I don’t want to sell my property?



What is a 12 Week Property Disregard?

Funding residential care is a big financial commitment that often requires a property sale. Sometimes, this sale doesn’t need to happen for months or years after a resident has moved into a care home of their choice.

In some cases however, this will happen much sooner. When a prospective care home resident is considered by the local authority to have enough wealth to pay for their own care, but this wealth is tied up in their home and they don’t have sufficient liquid assets to cover the cost of their care, a 12-week property disregard can become a viable option.

If you have capital below the upper capital limit (more on this later) and own a property that only you live in, then you may be entitled to a 12-week property disregard for the first 12 weeks that you live in a care home on a permanent basis.

When carrying out your financial assessment, the Benefits and Contributions Adviser will let you know whether you qualify for this 12 week property disregard.


When it comes to funding care, we’d recommend that you seek independent financial advice before making any major decisions.


Woman sat at her computer





How Does It Work?

The basic rule of self-funding is that if you live in England and have total assets of more than £23,250, you’ll be required to fund all of your care costs. However, if your savings and assets are below this amount and you own a property which you intend to sell for the purpose of funding long-term care then the local authority must disregard the value of your property for the first 12 weeks of you moving into a care home permanently (provided you meet their ‘eligibility criteria’).


Find your local council or authority here.


Now that your property value has been disregarded and you fall below the threshold, the council are legally required to fund your care for this 12 week period or until your home has been sold - whichever happens first.

At the end of the 12 weeks, you’ll be required to pay the full cost of your care. You don’t need to sell your property though - you may instead choose to rent it out, seek other sources of funding or apply for a Deferred Payment Agreement.

The council can also apply the 12 week disregard when you’re already in permanent care if there’s a sudden or unexpected change to your financial circumstances.





How Much Will the Local Authority Pay?

Local authorities and councils have standard amounts that they’ll pay towards an individual’s care. These amounts are based upon several factors, including the type of care and level of care that’s required. In many cases though, this amount will actually be fixed and non-negotiable.

It’s important to be aware that your local authority won’t necessarily pay the full amount of their publicised rate. Instead, they’ll pay up to a maximum amount of this rate, minus your assessable income.

For example, if your local authority’s standard contribution is £500 per week and you have an assessable income of £300 per week then they’ll pay the difference between the two (which is £200 per week).

If the fees at your chosen care home are £900 per week, the care home will likely expect a £400 per week top-up to be made (more on top-up fees later).


Any financial support provided by the local authority during this 12-week period doesn’t have to be repaid.


Saving thresholds

Whether or not the local authority will contribute towards your care costs depends on the total value of your savings and assets. If this value exceeds the upper limit then you’ll typically have to pay the full cost of care.

However, if your savings and assets fall below the lower threshold then 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 saving thresholds for care home fees in 2022/23:


England

Upper threshold: £23,250

Lower threshold: £14,250


Scotland

Upper threshold: £28,750

Lower threshold: £18,000

In Scotland, personal and nursing home care is free for those who have been assessed as needing it. You can also claim payments to cover these parts of your care home fees.


Wales

Upper threshold: £50,000

Lower threshold: N/A

In Wales, there is only an upper limit. If you have savings and assets worth less than £50,000 then you’ll receive the maximum support from your local authority regardless.


Northern Ireland

Upper threshold: £23,250

Lower threshold: £14,250


UK saving thresholds 2022/23





Can I Go Into a Home That Charges More Than the Council Will Pay?

If the care home you or your loved one wish to live in charges more than what the local council or authority will provide then the difference between these two amounts is known as a ‘top-up’. A top-up fee can be paid by yourself, a family member, a close friend or another third party.

If you don’t have enough money to meet the costs of the top-up during the property disregard period then you can arrange to repay this to the council when your property is sold.





What Happens After the 12 Weeks?

If your property still hasn’t been sold after 12 weeks then the local authority should be able to lend the money to pay for care through a deferred payment agreement. This differs from the disregard period as here, all the money that the local authority provides will be recovered when your property is eventually sold.

In the majority of cases, a charge will be placed on the house to ensure they recoup the money which has been lent.

Before entering into this arrangement or something similar, we’d recommend that you take independent advice from a care fees planning specialist so you can fully consider all available options.





What Counts as Property?

‘Property’ refers to any building, accommodation or land that you own or jointly own. For most people, this will be their home. However, property can also include things like houses lived in by someone else, holiday homes or commercial properties.


Maids Moreton Hall care home





Will My Property Be Taken Into Account?

If you or your loved one owns property apart from your former home then its value will be taken into account from the day you enter a care home.

If the value of this property is over £23,250 then you’ll have to pay the full cost of fees.


However, the value of your property won’t be taken into account while it remains the home of any of the following people:

  • Your partner or spouse
  • A relative aged over 60
  • A relative aged under 60 who is unable to care for themselves
  • A divorced or estranged partner (if they’re a lone parent)
  • A child under 16 who you look after

In nearly all other circumstances, the value of your home will be taken into account after the 12 week property disregard period. If the home is jointly owned then the value of your share will instead be taken into account.





What Happens If I Give My Property Away?

If you give away your property or sell it for less than its true value to try and avoid paying the full cost of your fees, you’ll likely be charged as if you still owned the property. Doing this is known as deprivation of assets.

If you have a high weekly income then it may be financially beneficial for you to not take the offer of the 12 week property disregard. Any element of council funding means that you aren’t entitled to receive Attendance Allowance after 28 days. If you’re able to pay for your care in full from your income then it probably makes sense to decline the offer of a 12 week property disregard and continue to claim Attendance Allowance.

If this scenario applies to you then a Benefits and Contributions Adviser will be able to offer guidance.





What If I Don’t Want to Sell My Property?

If you don’t wish to sell your property then there are various other ways to fund care:

  • You can raise money by renting out your home. This rental income may allow you to fund any ongoing care. Whether you’re able to do this will depend on your income, how much the fees are and whether anyone else can help. You’ll also need to consider expenses like property insurance and maintenance
  • You may have family or friends who are willing to contribute towards the cost of your care
  • You could raise the money yourself by taking out a loan, taking out an annuity, a home income plan or some other type of equity release scheme
  • You may decide to apply for a deferred payment agreement





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