Self funding your residential care

Transcription

1 Choosing and paying for care Self funding your residential care a guide to help with care charges for people paying for their residential or nursing home care Adult social care

2 About this booklet This booklet explains in detail the help with care home fees and charges that we can offer to people self funding their own residential or nursing care home placement. Paying for your own care home placement can be complicated when you have property which has been taken into account in a financial assessment. In this booklet we outline several schemes which we operate and which apply where an existing property is owned. Why am I called a self funder? If you are moving into residential care permanently and have capital (including property) or savings over the upper capital limit of 23,250 (2015/16) you will have to pay the full cost of your care. This is why you are called a self funder. Our booklet Paying for care homes covers this in more detail. If you have a property the rules for self funding and assistance that we as a council can provide can be quite complicated. The main points are covered in this leaflet. It is possible that certain types of capital and savings or property could be disregarded and it is in your best interests to ask for a financial assessment. We can then advise you on your own particular circumstances. How can the council help me, as a self funder? Even if you don t think the council will be able to make a financial contribution to the cost of your support it still makes sense to have a free social care assessment from us. You may find that you are entitled to some help or benefits that you weren t aware of. If we can t help with your costs, as a self funder you are still entitled to the same free and detailed help and advice in working out your needs and finding the right care for you. What do I need to be aware of as a self funder? If you move into a care home on a permanent basis as a self funder and make all of the arrangements yourself, meeting all of the costs yourself, you need to be aware that sufficient funds must be available from the day that you move in. This means that you need to have enough money readily available from moving day, to pay for your weekly fees, from savings, income or from the sale of your property.

3 What will happen once I am in a home and my savings and capital are used up and drop below the upper capital limit? As a self funder it is vital that you closely monitor your money once you are living in a care home. Keep track of the rate at which it is being spent on your care home fees and monitor it as it nears the upper capital limit of 23,250. We strongly recommend that you seek independent financial advice when thinking about a move into a care home. You should also maintain ongoing communication with your financial advisor so you are aware of your financial position. It is your responsibility to contact our social work team for assistance with fees as soon as you know that your savings are about to fall below the limit. We can then arrange a social care assessment and provided that you meet our care requirements and eligibility for financial assistance we will provide you with help in meeting the fees. It is important to note that the council will only provide financial assistance with fees from the date that you contact us for help. If you have already used up some of the money and eaten into the upper capital limit we will not reimburse this amount. In certain circumstances, where a person has very high care and nursing needs, their nursing home fees will be met in full by the local Clinical Commissioning Group (CCG), Continuing Health Department. In order to qualify for this assistance a full assessment of need would need to be carried out by the CCG. What if I have a partner or other family member living with me, do I still need to sell my property? If you have a partner or other family member living with you in your property and you need to go into a care home as a self funder we will discuss the implications of this with you at the assessment. Each person s individual circumstances are different. Sometimes the property is disregarded - meaning that its sale is not necessary and the relative can continue to live there. Is there any other help I am entitled to as a self funder - I ve heard of the twelve week property disregard? If you are a self funder who has no capital or savings above the upper capital limit of 23,250, but has a property to sell, then the council can assist you with the twelve week property disregard in the following circumstances: a) when you first enter a care home as a permanent resident; or

4 b)when a property disregard other than the 12-week property disregard unexpectedly ends because the qualifying relative has died or moved into a care home. This is intended to enable people to decide if they wish to stay in a care home on a permanent basis without the pressure of having to pay beyond their current means or decide to immediately sell their property. This means that if you move into a care home permanently the value of any property which you would normally occupy as your main or only residence will be ignored or disregarded for the first twelve weeks of your stay and we will partially fund your stay for this period. For this first twelve week period a weekly financial contribution from you will be calculated based on your current available income and any other assets or savings, plus any benefits that you are currently in receipt of. We will then meet the rest of the cost for this initial twelve week period. Case study Mrs A is entering a residential care home for the first time. Her weekly fees are 400. The council has calculated that she can afford to contribute 200 per week from her income and savings. We will then contribute the remaining 200 per week for the twelve week property disregard period. This 2400 ( 200 x 12 weeks) will not need to be repaid to us. You should note however that there is a maximum weekly amount that the council will pay for various types of care home placements. If you choose to move into a home that is more expensive than this maximum weekly amount then we will not fund this additional amount. This is often known as the top up amount. It may be that another person, such as a family member, will need to pay this amount in order to meet the full care costs of the home of your choice. During the period of the twelve week property disregard any attendance allowance that you have been claiming will cease four weeks after you have moved into the home. After it has been decided that you will become a permanent resident in the care home your weekly contribution will be reassessed and your property will be disregarded for a twelve week period from this date. From the start of the thirteenth week the value of your former home will be taken into account and you then become a true self funder. At this point you may be able to enter into the deferred payment scheme. You may also be able to reclaim attendance allowance and should submit a claim.

5 What is the deferred payment scheme? The deferred payment scheme means that people will not be forced to sell their home in their lifetime to pay for care. It is designed to help you if you have been assessed as having to pay the full cost of your residential care but cannot afford to pay the full weekly charge because most of your capital is tied up in your home. Dudley Council may consider assisting you with your payment of care home fees in return for a legal charge being placed on your property. You will pay a weekly contribution towards your care that you have been assessed as being able to pay from your income and other savings. The council pays the part of your weekly charge that you can t afford until the value of your home is realised. The part the council pays is your deferred payment. How the scheme works After the twelve week property disregard period a financial assessment will take place where your property will then also be taken into account and your weekly contribution recalculated. We will continue to meet the difference between the full weekly cost of your care home and your assessed weekly contribution, pending the sale of your property Case study Mr B is in a residential care home where the weekly fees are 340. A financial assessment has taken place and it has been calculated that excluding the sale of his home from the assessment he is able to contribute 150 per week towards his fees. So, = 190. Therefore the council will meet the 190 per week difference in his weekly fee. This weekly 190 is a deferred charge, until Mr B s property is sold. The deferred payment builds up as a debt which is cleared when the money tied up in your home is released. For many people this will be done by selling their home or from their estate after death. You can also pay the debt back from another source if you want to. Charging interest The loan will have interest charged on it in the same way a normal loan would be charged on money borrowed from a bank. The maximum

6 interest rate that will be charged is fixed by the government. Currently the maximum rate to be charged is based on the cost of government borrowing and will change on 1 January and 1 July every year. This interest will be calculated and added to the outstanding balance on a daily basis - this is called compound interest. How compound interest works: Day 1 Daily deferred amount + interest + set up fees and charges = Day 1 balance Day 2 Day 1 balance + daily deferred amount + interest = Day 2 balance Day 3 Day 2 balance + daily deferred amount + interest = Day 3 balance Interest will apply from when your Deferred Payment Agreement starts. You will receive 6-monthly statements advising you how your charge is being calculated and what the outstanding sum on your deferred payment account is. Your agreement with Dudley Council Your agreement to use the scheme will be put in writing in the form of a legally binding contract and will need to be signed by yourself or your legal representative and by the council. You will be provided with a copy of this. The agreement covers both the responsibilities of the council and your responsibilities, one of which is to make sure that your home is insured and maintained. If you incur expenses in maintaining your home while you are in residential or nursing care these will be allowed for in the amount that you are assessed as contributing each week from your capital and income. You can end the agreement at any time (for example if you sell your home) and the loan then becomes payable immediately. Otherwise the agreement ends on your death and the loan becomes payable 90 days later. The agreement will state that as part of the scheme we will place a legal charge on your property. This is where we register with the Land Registry that we are owed money against the property and that a final exchange of contracts cannot take place on any sale of the property until this money has been repaid to us (similar to when a mortgage is taken out). You should be aware that if this contract is not completed, signed and returned within four weeks of receipt, we may withdraw the funding offer. You would then be expected to make your own arrangements to pay for your care home.

7 You should also be aware that if you decide not to sell your property then your entitlement to certain benefits, such as pension credit, may be affected. If you choose to move into a home that is more expensive than the maximum weekly amount that the council will pay you can still choose to pay the top up additional amount. This must be agreed under the deferred payments scheme and will be stated in the contract. The weekly top up amount can also be deferred under the scheme and repaid upon the sale of your property if the council agrees that there is enough equity in your home. Costs associated with the Deferred Payments Scheme There is an initial cost of 300. This covers the legal and administrative costs involved in setting up the deferred payment. This can be added to the deferred amount or paid at the point that the agreement is taken out. Who can advise me on the deferred payments scheme? We will provide you with information and advice about the scheme as well as your eligibility. We are not however able to advise you on your best course of action. If we agree to your request for deferred payments we strongly recommend that you to seek independent advice about the scheme and your position from independent financial and legal advisors before any arrangements are finalised. You should also ensure that you check your entitlement to benefits, such as income support, pension credit, attendance allowance and care component disability living allowance. The Department of Work and Pensions (DWP) can advise on this. If your property is to remain unoccupied for a period of time following your move into a home, you will need to take advice on home security, home insurance and maintaining the property. Who is eligible for the deferred payments scheme? In order to be eligible for the scheme you should meet the following criteria: The council has eligibility criteria for each type of residential home placement. A social care assessment must take place to determine your eligibility for the home of your choice. Without this we cannot consider funding your care home.

8 You should not have any other income or savings over the upper capital threshold, other than the value of your property, to meet the cost of your care. You do not want to sell your property, or if you do, you realise that it may take some time to sell and so the funds from it won t be available quickly enough to meet the costs of your care home. You must have the mental capacity to agree to a deferred payment or have a legally appointed agent willing to agree this. Your property should be worth enough to meet the cost of your care home in the first year. You must have beneficial interest in the property; that is, you must have full or part ownership of it. A valuation of your property will need to be obtained. This is to make sure that it is worth enough to fund the cost of the care home - at least for the first year. Its value must be over the upper capital limit. There should be no outstanding mortgage or, if there is a mortgage, this must leave sufficient money to meet the cost of your care. What else do I need to be aware of when considering the deferred payment scheme? There are some key things that you need to be aware of when thinking about this scheme. These include: Remember, a legal charge will be secured against your property. This gives us the legal right to reclaim the loan that we are providing you with through the scheme from the proceeds of the sale when your property is sold. In some circumstances we will consider allowing you to keep some of your income and/or assets to meet the ongoing maintenance costs of your property. You should note however that this will increase the deferred debt as your weekly contribution to the care home fees will be smaller. If you choose not to sell your property and to rent it out the net income generated, less a rental allowance of up to 20%, must be used to contribute towards your care home costs. This will however reduce the amount of the deferred debt to be repaid.

9 You may not qualify for income support or pension credit if you are choosing not to sell your property. You may still qualify for attendance allowance or disability living allowance. Benefits departments may request a letter from us confirming that you are on the deferred payments scheme. To take part in the scheme we will require you to provide a copy of your property deeds; we can then verify the ownership of the property. We will pay the care home the full fees on your behalf. We will issue you with a four weekly invoice for your contribution which is based on your current available income and assets; this must be paid upon receipt. Following the sale of your property we will then issue you with an invoice for the total amount of deferred fees. After the sale of your property your total capital assets are likely to exceed the upper capital limit threshold. If this is the case then you will be considered to be self funding and will not receive any further financial assistance from us. You would then be required to meet the cost of your own fees and pay the care home yourself. You need to be aware that once you are meeting the cost of the home in full, the home may renegotiate the fees with you. You should ensure that someone is happy to have these discussions about ongoing costs with the home if you are not able to. You also need to be confident that you can afford to pay for the costs of the home from your total capital assets and that you have a method in place to make the payments. If this is likely to be problematic you should contact our access to adult social care team (the number is on the back of this leaflet). If your savings subsequently look likely to fall below the upper capital limit you should contact our access to adult social care team in good time as you may then be eligible for further assistance with your care home fees. Our eligibility criteria would need to be met to ensure that you are able to stay in the home of your choice. What if I choose not to take part in the scheme or I m not eligible for the deferred payment scheme? If you do not wish to take part in the scheme, or are not eligible because your savings and income are above the upper capital limit, then you will need to meet all of the care home fees yourself as a true self funder.

10 If your capital falls below the upper capital threshold during your stay in a care home and you then decide to sell your property, you can then request a reassessment and choose to take part in the deferred payment scheme at this point. Will I still be able to claim benefits when moving into a care home as a self funder? Again, if your total capital resources exceed the upper capital limit following the sale of your property, your benefits entitlement may be affected. Further advice can be obtained from the Department for Work and Pensions. Other publications in this series Accessing to adult social care Paying for care homes - a guide to paying for residential or nursing home care Choosing a care home - a guide to choosing a residential or nursing care home Useful contact details Age UK Produce a range of useful fact sheets regarding care provision. On request up to five fact sheets will be sent free of charge, or they are available online. National advice line (Lines open 8am - 7pm) Age UK Dudley Unit 56A, Merry Hill Shopping Centre, Dudley DY5 1SR Dudley CCG Continuing Healthcare Dept., Tiled House, 200 Tiled House Lane, Dudley DY5 4LE Department for Work and Pensions (DWP) For disability related benefit enquiries call For pension credit enquiries call For benefit enquiries for those under pensionable age call

11 Financial advice Financial Conduct Authority The Financial Conduct Authority website has a range of advice and information on sourcing financial advice, including how to find and choose a suitable advisor, what to expect from them, the difference between independent and restricted advisors and charging options. All advisors should be accredited by the FCA. SOLLA A not-for-profit organisation which helps people to find trusted accredited financial advisors who understand financial needs in later life. PO Box 590, Sittingbourne, Kent ME10 9EW Tel or visit SAGA The Saga Care Funding Advice Service, provided by Just Retirement Solutions Limited, specialises in providing care funding advice for people who need to pay for their own care needs. There is a useful free guide to paying for care that can be viewed on the SAGA website or requested by post. Tel to speak to an adviser or visit Paying for Care Paying for Care is a not-for-profit organisation which includes advice on its website on paying for care as well as an online care fees calculator and a care cap calculator. The website also offers a search facility for local advisers - for SOLLA accredited advisers look for the red and purple flower logo by their name. Money Advice Service This service has been set up by the Government and provides a range of free and impartial money advice. The website includes a section on paying for care, a telephone number and web chat option for further free advice, and a link to the SOLLA website for those needing specialist independent advice. Other independent advice There are other information and advice organisations including: If you decide to speak to another organisation about your care, and specifically your finances, it is recommended that you search for an adviser in your area who is qualified to offer independent advice on all the financial products and services you re interested in, and who specialises in self-financing long-term care. For more information visit the Financial Conduct Authority website

12 Further information For further information please contact our access to adult social care helpline Telephone (Monday to Friday - 9am to 5pm) An emergency duty team is available on , at all other times Web accessteam.dachs@dudley.gov.uk Post Brierley Hill Health & Social Care Centre Venture Way, Brierley Hill DY5 1RU If you require any assistance with regards to this document or would like to request an interpreter, large print or audio version, please contact the equality and diversity unit on DEEH 03/15