Financing the cost of care

When an individual requires care and wishes the Local Authority to assist with paying the cost of that certain steps have to be taken.

There are three elements to the costs – personal care, nursing care and accommodation.

In Scotland, all individuals over 65 assessed as requiring care are entitled to a Personal care allowance of £174 per week (as at 2018). If nursing care is required, an allowance of £79 per week is available. Depending on whether the individual is at home or in a care facility, payment of these allowances may affect any Attendance Allowance being claimed.

In addition to assessing the need for care, in respect of any further financial contribution, the local authority will carry out a financial review.  If an individual has capital assets with a total value less than £17,000 (amount is reviewed on an annual basis and subject to change) they may have the full cost of that care met by the local authority.  If however you have a large income source even if your capital is under £17,000 part of this may be required to meet your care fees.

An individual with capital assets valued between £17,000 and £27,250 will receive a contribution from the local authority towards their care costs, but will be required to meet the balance of fees from their own funds.

If an individual has capital assets in excess of £27,250, they will be required to meet the full cost of their care from their own capital, subject to certain exceptions known under the relevant rules as “disregards”.  For example, the local authority will not take into account the value of your home when assessing any potential contribution if you have a spouse still living in the property, or a relative under 16 or over 60 years of age.

In addition if you are moving into a care home permanently and if your property is included in the financial assessment the local authority will disregard your property for the first 12 weeks if you have less than the capital limits in savings.  This gives time to sell the property.  Thereafter they will review the position and may agree a deferred payment scheme (where they will fund your care but take a security over your home in order to receive the funds due to them from the proceeds of sale when the property is eventually sold).  Before considering a sale of your property in these circumstances a review should be carried out and other options such as renting the property can be considered.

The law allows a Local Authority to look back without limit of time in order to determine whether an individual has deliberately deprived themselves of an asset in order to avoid making a contribution to care costs.  As a matter of policy or local practice, a local authority can decide on the number of years in which to look back and this can differ from one authority to another. However, it is important to be aware that policy can change and, given the financial difficulties most local authorities face, this may be an area where rules become more stringent in future.  For that reason, anyone considering a gift of assets (including a house) should seek advice before proceeding.

Our Private Client Team can assist you with your Estate Planning needs which should be reviewed on a regular basis to ensure your wishes are met.  Please get in touch with Lynne Ragoubi to discuss the various options available to you.

This is a general statement of law and practice in this area and is not to be taken as advice from our firm.  Specific advice should be sought in each individual case.

The information and opinions contained in this blog are for information only. They are not intended to constitute advice and should not be relied upon or considered as a replacement for advice. Before acting on any of the information contained in this blog, please seek specific advice from Gilson Gray.