Long Term Care – Frequently Asked Questions

Long Term Care funding falls in to two categories:

1. The assessment for the contribution towards the costs of care when that care is being delivered in your own home, and
2. The assessment for the contribution towards the costs of care when care takes place in a Residential Care Home.

If you've achieved a degree of financial success in your life and you have more than £23,250, you will be fully self-funding. This means that you will have to pay for your Long Term Care costs, in full, until your savings are eroded below that level.

The lower level of savings is £14,250 and when your saving drop below that level, you no longer have to contribute towards your own care costs.

As an example, lets assume that Jonathan has savings totalling £98,250 and, therefore has to fund his own Long Term Care costs.

If we assume that care in his own home was costing Jonathan £25,000 per year on the basis of two or three care visits a day, seven days a week, then it would take him three years before he reached the point where social services started contributing towards some of his care.

This would continue until Jonathan's savings drop below £14,250, at which point Social Services would pay for Jonathan's care, in full.

Any assessment for Long Term Care funding takes in to account all of your savings and assets that aren't disregarded.

Yes, you can. Depending on whether your care is delivered in your own home or in a Residential Care Home.

Whilst the assessments are broadly similar, if you’re having care in your own home, the value of your home is disregarded when assessing your funding. Obviously, your home can't be sold if you're still living in it.

However, if you’re in a Residential Care Home, the value of your home is included in the assessment and your property will be sold to fund your care.

Yes. The value of your home may be disregarded under certain circumstances. For instance,

• If your stay in a care or nursing home is expected to be temporary and you intend to return to your home.
• Where you intend to sell your home to purchase something more suitable to your needs, the value would be disregarded.
• The value may also be disregarded when your partner, former partner, civil partner or another family member (that falls in to certain categories) still occupies your home.

Care in a Residential Care Home or Nursing Home is, generally, far more expensive than care in your own home and will erode your savings far more quickly.

The exception to this is where you remain living in your own home, need care available to you 24 hours a day and have around-the-clock live in care.

In terms of your savings and what counts as savings; everything in your bank account, premium bonds, savings accounts and ISAs all count towards what assets the local authority assess. Surprisingly, Insurance Bonds don't form part of the assessment and are exempt from local authority means tests.

To understand how the means test works when someone holds Insurance Bonds, let's give you an example:

Let's imagine that Rachel has £50,000 of her savings held in an Insurance Bond and the remaining £50,000 held in cash. 

Care in her own home costs Rachel £25,000 per year on the basis of two or three care visits a day, seven days a week.

When getting assessed for care in her own home, Rachel's house would be exempt and £50,000 in the Insurance Bond would be exempt. This leaves only £50,000 to be assessable towards Rachel's care contribution.

Rachel would still be above the means tested cap of £23,250 but only by £26,750, which mean that Social Services would start contributing towards her funding after 13 months.

Many clients ask about the implications of gifting their home to their children in the hope that it wouldn't form part of their estate for any assessment for local authority means tested benefits.

We would advise very strongly against doing this for two main reasons:

1. Firstly any gift made that seeks to deliberately deprive yourself of assets will be unwound by the local authority. If they believe your action is intended to deprive yourself of assets, they will treat you as still owning the assets and take them back off the people you have given them to. There is no time limit as to how far back they can go to do this, and it would be very hard to argue, successfully, that you made a gift of your home - the place where you live - for any reason other than to avoid means tested benefits assessment. It would be hard to imagine an advantage to your children owning your own home while living in it and therefore the obvious conclusion is you gave it away to avoid it being used to pay for long-term care.
2. Secondly, the issue is one of control. If you gave away a particularly important asset, like their family home, and your any of your children ran into financial difficulties or passed away, their ownership of your house could lead to the value being gifted to their creditors or their beneficiaries. In either case, you run the risk of being thrown out of your own home.

As you can see, this strategy is fraught with risk and gifting the property away to your children neither works in terms of protecting the assets or in terms of your own long-term security.

If you partner still lives in your home, its value should be disregarded, as is the case with other relatives.

The rules state that, where you no longer occupy your home, its value should still be disregarded where it's occupied, in whole or in part, by;

• The resident's partner, former partner or civil partner (except where the resident is estranged or divorced from the partner, former partner or civil partner).
• A lone parent who is the claimant’s estranged or divorced partner.
• A relative of the resident or member of the resident’s family who; 
  Is aged 60 or over, or
  Is a child of the resident aged under 18, or
  Is incapacitated.

The term "relative" in paragraph includes any of the following:
A. Parent (including an adoptive parent)
B. Parent-in-law
C. Son (including an adoptive son)
D. Son-in-law
E. Daughter (including an adoptive daughter)
F. Daughter-in-law
G. Stepparent
H. Stepson
I. Stepdaughter
J. Brother
K. Sister
L. Grandparent
M. Grandchild
N. Uncle
O. Aunt
P. Nephew
Q. Niece
R. The spouse, civil partner or unmarried partner of any of A to K inclusive.