How to navigate the cost of care
Finding out what you can claim and choosing the right home is vital if you want to avoid those final years pitfalls, says HARVEY JONES
ONE of the toughest decisions you and your family will ever have to make comes in the final years of a loved one’s life, when their health begins to fail.
It can be hugely expensive, as nursing homes can cost as much as £1,200 a WEEK, depending on where you live. This can destroy family wealth and inheritances – and even the £86,000 care cap coming into force from October will do little to prevent that.
This week we examine what to do when a loved one cannot struggle on alone without external help.
Having care at home
Most people will want to stay in their home for as long as possible, and will get informal caring and support from family and friends.
But there may come a point when professionals have to be called in to help with everyday living tasks like getting washed and dressed, preparing meals and cleaning. This is known as domiciliary care – but you don’t get it free from the state if you can possibly pay yourself.
You’ll have to undergo the dreaded means test first – just as you do before someone goes into a home – to see who foots the bill.
As we reported last week, if your total assets are worth more than £23,250, you will get no council help at all towards your care costs in England or Northern Ireland. This “upper capital limit” rises to £28,750 in Scotland and £50,000 in Wales.
You only get full support in England and Northern Ireland if your assets fall below £14,250, the lower capital limit. This is £18,000 in Scotland. In Wales, you get full help at £50,000.
If you own your home and live there alone, its value will count towards the means test, but may be excluded if your spouse, partner or a disabled relative lives there.
As well as your assets, the means test will look at your income, and if that’s enough to cover your care costs, again, you will have to pay yourself. This is known as self-funding.
Even if you know that you won’t qualify for financial support, it’s still important to get a needs assessment, says consumer champion Which?. This will provide a formal recognition of your needs, and your council will also tell you what services are available locally, and help you arrange care.
Find out more at gov.uk/applyneeds-assessment-social-services.
You may find your assets quickly deplete once you start paying for care, making you eligible for local authority support sooner than you realise. Later life charity Age UK offers support through its free advice line on 0800 678 1602 or online at ageuk.org.uk. Age UK also has local branches across the country.
The cost of care
How much you pay depends on whether you simply need residential care or nursing care on top of that.
Even if you just need a home, the cost is shocking. Residential care homes for older people in England currently need to charge fees of £696 to £849 a week to generate a sustainable return, according to the last LaingBuisson Care Cost Benchmark.
That ranges from £36,192 to £44,148 over a year. If nursing care is needed on top, those figures are even higher.
Nursing care homes need to charge between £969 and £1,075 per week, which totals £50,388 to £55,900 a year.
In practice, people could pay a lot more – especially in London and
the South East where wages are higher and property more expensive, pushing costs beyond £60,000.
Councils pay on average only £596 a week for residential care and £764 for nursing care at the lower end of the scale. This leaves care homes dependent on premium fees from private payers, LaingBuisson says.
Even worse, these fees tend to increase every year, and will rise at an even faster rate as inflation soars.
If you want a higher standard of home than the council is willing to fund – or one that is nearer to loved ones – a relative or friend can pay care home top-up fees.
A care home top-up fee makes up the difference between what the council will pay and the cost of the home. One risk is that the care home is likely to increase its fees each year, but there is no guarantee the council will do the same.
On the plus side, under something called the ‘12-week property disregard’, your council may disregard the value of your property for the first 12 weeks after you move into a care home.
This gives you time to make key financial decisions, such as whether to sell your home.
There are plenty of online calculators showing how much you are likely to pay for residential care in your area, what state support you can get, and when you are likely to hit the care cap.
Visit payingforcare.org/calculators.
Where to start your hunt for the right care home
Many begin looking for a care home by Googling “care homes near me”. The risk is that this points you towards those with the biggest marketing budgets, so try online care directories such as autumna.co.uk, carehome.co.uk or carechoices.co.uk, which lets you search for homes by postcode, offering info and reviews, says Autumna founder Debbie Harris. Autumna doesn’t take referral fees from care homes, but other sites may. Debbie says: “Make sure any directory you use offers a full list of every registered provider, rather
than a restricted list of homes that will pay the directory a referral fee.”
Once you have identified a shortlist of homes, call them to discuss your needs and arrange a virtual or physical tour.
But ultimately, it all comes down to the people working there. “Make sure you speak to the staff and the manager if at all possible,” she adds.
Options for self-funding
The lucky ones will have enough retirement income, whether from a pension, savings or property, to pay for their care costs.
Others should check whether they are claiming vital state benefits, such as Pension Credit, a means-tested state pension top up for the poorest, or Attendance Allowance, which isn’t means tested.
Another possibility is to get help from family or friends, or consider downsizing to a smaller property, says Andrew Morris, senior equity release adviser at Age Partnership.
Renting out a room is another option to help with costs if you are a property owner. Andrew says: “You can earn up to £7,500 a year free of tax under the Government’s rent-aroom scheme.”
If you need residential or nursing care, your family could rent out your property to cover at least some of the costs. Equity release is an increasingly popular option, where you take out a lifetime mortgage against the equity of your home, while retaining the right to live there for life.
You don’t have to repay the debt in your lifetime. Instead, the interest rolls up and is added to the initial money you borrowed. The total debt is paid off from the proceeds of your house sales when you and any partner dies or goes into long-term care.
Andrew says: “The best way to raise funds will depend on your personal circumstances, and it may be worth seeking specialist help from a specialist later life adviser.”
If you own your home and live there alone, its value will count towards the means test, but may be excluded if your spouse, partner or a disabled relative lives there.