Moving your loved ones into a care home or nursing home can be a difficult time for everyone - and when the question of care fees are added to the mix, this often makes the worry and stress worse.
Obviously you want your parent or grandparent to have the best quality of life possible and the best possible standard of care so that their every need is met, but you also have to be realistic about what they - or you - can afford.
If this situation sounds familiar, you may be wondering whether next of kin are responsible for care home fees. To find out, read our handy guide.
Care homes can be paid for in three ways:
Although you may feel responsible for your loved one’s care home fees, you are only legally obliged to pay for their care if you have signed a contract with a care provider. Mother, wife, sibling or relative by law, unless you have signed this contract, or have any joint assets with them, you have no financial obligation to help cover their care costs.
However, if you are able to help and want to help, there are ways you can get involved with your loved one’s care home fees.
If your loved one likes a care home, but it’s out of their budget, they can ask a third party to pay what’s called a top-up fee. This is where the local authority covers part of the costs and you make up the remainder. If you volunteer to pay the top-up fee, you will sign a contract with the care home and become legally obliged to pay.
Similarly, if your money runs out you will do a means test to work out whether you are eligible for funding from your local authority or the NHS. A relative or friend can step in at this point to offer a top-up fee to help cover the costs. However, if you still don’t have enough money to stay in your current care home, you may have to make the move to a less costly one.
We advise thinking carefully about the situation before rushing into anything. Care home fees often increase each year and local authority funding might not, creating a bigger disparity between the two sums of money that you will then have to cover. Consider whether you can afford this in the long-term before signing anything with the care provider.
The best way to find out what you and your loved one can afford is through a means test.
Means tests are divided into care needs assessments - which works out a person’s care needs and the level of support they need - and the financial assessment, which analyses the person’s savings, pension and assets to see whether they can cover care costs themselves, or whether they need funding.
Although assets like the value of the person’s home, savings, private and state pensions and benefits are included in a means test, family assets are not included.
However, if that person has joint assets, 50 percent of each shared asset will be considered by the local council; for example, if your parents have £20,000 in their joint account, each will be considered to have £10,000.
You must also bear in mind that if your parents own a property jointly, if only one of them is going into care, the house will not be included as part of their assets, as the other is presumably still going to be living there.
Did you know that between 40,000 to 70,000 homes are sold each year to cover care fees? Many people save their homes to give to their children as part of their inheritance, but find that care costs will take up the majority of this sum once they are gone.
The prospect of selling your home to pay for care fees might seem like the end of the world - but don’t worry. This isn’t always your only option. Instead, you can set up what is called a Deferred Payment Agreement with your local authority. Alternatively, if you are going to be receiving home care and support, or you’re applying for short-term care, you won’t have to sell your house.
If there is going to be someone else living in the house - in most cases this is a spouse or partner, but in some situations a blood relative is allowed - you may be able to keep it too.
With a Deferred Payment Agreement, your local council agrees to lend you a certain amount of money - this is based on what your house is worth. They will claim this money back from the eventual sale of the house. DPAs mean that other people can continue to live in the home, or it can be rented out.
There are admin and interest costs that come with DPAs, so do your research before applying. You will also need to pass eligibility checks before being granted a DPA.
When someone dies, their care home will issue an invoice for any outstanding care home fees. Next of kin will not have to pay this, but instead it will be taken from the person’s estate.
If this person had a Deferred Payment Agreement, the amount due becomes a debt owed by their estate, due within 90 days after their death. If the local authority thinks that the process of selling their property is going too slowly, they may step in to legally enforce the debt.
Although you might think that giving your family home to your children or putting it in a trust may seem like a clever way to avoid care home fees and inheritance tax, it can however cause further costs and trouble down the road. This is known as deprivation of assets and can be a risky tactic.
Some of the risks involved with deprivation of assets are:
You may see trust companies advertising property trusts that guarantee the protection of your property being taken to pay care home fees. However, be warned that such companies are often unregulated and end up costing significant amounts of money. Your local authority will likely view you giving away your house as a deliberate deprivation of assets and include the property in their means assessment anyway.
You can also use services like NHS Continuing Healthcare to help with care home fees. NHS Continuing Healthcare is primarily for those who have ongoing physical or mental health needs. The NHS will cover the cost of their care and support, including care home fees.
You could also look at FNC Funding, which is NHS-funded nursing care covered by the NHS.
Both NHS Continuing Healthcare and FNC funding are decided through an eligibility assessment. To successfully qualify for FNC funding, you must live in a care home registered to provide nursing care and you cannot already be eligible for NHS Continuing Healthcare.
In England, the lower limit for financial assistance is £14,250 and the upper limit is £23,250. In Scotland this rises to 17,500 - £28,000. Wales does not have upper and lower limits, but instead has one limit of £50,000 if you want residential care, including a nursing home, and £24,000 for non-residential care.
If you don’t have enough to pay for your care home fees, you can ask for a means assessment from your local council, who will assess how much financial help you are eligible for
Yes, local councils will take overseas assets into account, including properties and bank accounts.
Intermediate Care is a free temporary care service provided by the NHS. You can receive Intermediate Care for up to six weeks; whether that’s at home, in a hospital or a care home. After these six weeks, if you need further care you may have to cover the costs on your own.
If this is the first time you’re dealing with care home fees and finances, we do suggest seeking legal advice to start you off. Some of the terminology and processes can be fiddly and confusing, so asking an expert to help you is a great idea.
Hopefully you now have all you need to know about next of kin and paying for care home fees. We understand that working out finances can be incredibly stressful, but the important thing is to try not to worry.
By accepting the help and support of your local authority and loved ones, you can work together to create the best solution for your elderly parents and help to find them a care home you can all afford.