Who Pays for Care Homes?

28 January 2015

With an ever increasing aging population, Huw Worthington, Senior Partner, discusses provisions for elderly care

Who pays for Care homes?

For the first time in history there are 11 million people age 65 or over in the UK and by 2030 [1]the number of people age 60 or over is expected to pass the 20 million mark.

As Government resources continue to be stretched it would inevitably appear that funding for elderly care will be through rigid self funding assessment.

There are many types of residential care and nursing homes in Northern Ireland and the homes are run by local Trusts, private businesses or voluntary organisations.

A residential home is appropriate when you can no longer manage in your own home and you will be provided with food and accommodation with staff accountable 24 hours a day, physical and emotional help and care through a short illness.

A nursing home is appropriate if you have an illness or disability that means you need nursing care on a frequent basis.A qualified nurse will be on duty 24 hours a day and if you have assessed nursing needs your local Trust will pay £100 per week towards the fees to cover the rest of the nursing element.

Certain individuals are entitled to have the full costs of care paid for by their local Trust.This applies to care home residents whose primary need is a health based need.

Under the current rules if you live in Northern Ireland and have over £23,500 in Capital (investments and property including the value of your own home) your local Trust will assess you as being able to meet the full cost of your residential care or nursing home.

If you own your own home it may be counted as capital 12 weeks after you move into a residential care or nursing home although it wouldn’t be if your husband, wife or partner lives there or a close relative over 60 or under 16 (rules apply).

In order to keep your home and assets you should consider transferring the ownership of your home or other assets to someone while you’re alive. However it is against the law to transfer ownership of an asset to another person specifically to avoid paying your care home fees and there is no time limit as to how far back a Trust can go to find out if you have given away assets to avoid paying care costs.

You many choose to give money or assets to your children and there is no monetary limit on gifts to your children, grandchildren or other relatives but they may have to pay tax on any income generated from the assets transferred.

You might also be able establish a lifetime trust for children in order to pass assets which not only protects those assets in the event of a child’s death, divorce or bankruptcy but is allowable as a reduction in the value of an estate through legitimate inheritance planning. Early legal advice is advisable to ascertain if there are any options available to you.

[1] UK National Statistics Office 2015

Huw Worthington is the Senior partner of Worthingtons and heads up the Private Client Department.

 

 

 

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