With life expectancies steadily increasing, Frances Kelly of Tallents Solicitors in Newark explores why preparing for long term care funding is a subject we should all be concerned about, especially as, according to the 2011-published Dilnot Commission report, approximately one person in ten at the age of 65 faces future lifetime care costs of more than £100,000.
Currently local authority assistance is means tested, and in England and Northern Ireland everybody receives some help towards the nursing care element of their care. This is defined as care required to be carried out by a registered NHS nurse.
For those with assets over £23,250, accommodation and personal costs, such as help with washing, cooking and meals will fall on the individual or family members and can run into many thousands of pounds. In most cases the means test includes the value of any home – so a local authority can insist that your property is sold to meet the costs involved.
It’s no wonder when faced with the trauma of losing their family home, that many elderly people are willing to try any means available in an attempt to protect their most valued asset.
We’ve recently seen a UK bank fined tens of millions of pounds for mis-selling financial products which were purported to pay for long term care costs, but it’s not just the banks that are potentially taking advantage of the uncertainty surrounding long term care funding. Scores of companies also market trusts that ‘claim’ to offer the ability to protect the value of the family home when nursing care is needed. But this is not a guaranteed way of avoiding having to sell the family home to pay for nursing home fees.
Trusts set up for the specific purpose of avoiding long term care fees are likely to count as ‘deprivation of assets’ and any value transferred could be clawed back to pay for care charges. This means some solutions blatantly advertised as protecting assets from the costs of long term care may be completely unable to meet their claims and we recommend everyone seeks expert legal and financial advice.
The Dilnot Commission report makes a number of key recommendations:
- Capping the lifetime amount an individual has to pay for care at £35,000, after which they would become eligible for state help.
- The upper threshold of assets a person can keep to qualify for means tested benefits should be raised to £100,000.
David Ryan of Nottingham-based Independent Financial Consultants, Cockburn Lucas commented:
Dilnot’s vision of a ‘shared responsibility’ model, if implemented in the future, would split the cost between the state and the individual. This would allow many more product providers to become involved and offer new ways to help meet future care costs. We continue to experience a rise in the number of our clients entering care or facing care costs whilst in their own home, and are able provide specialised independent advice in this area
However, since estimates suggest it would cost the Treasury up to £1.8 billion a year extra it is likely that the government will be in no hurry to implement the recommendations in the Dilnot Commission report in the current economic environment.
At Tallents Solicitors we would be happy to help you review your affairs, both before and during care, and offer both our professional legal advice and financial advice via long-term-care-qualified Independent Financial Advisers.