Long Term Care NOTE: CLICK THE TEXT BELOW FOR FURTHER INFORMATION

Most savings and assets are included in the Local Authority means test, but some confusion has surrounded the subject of whether or not a person’s home is included or not. To help clarify the situation, a persons home is not included in the means test if:

· The spouse still resides in the home
· If a relative over 60 resides in the house
· If a disabled relative lives at the property
· If a child under 16 lives in the property
· The person is in the first twelve weeks of needing permanent care.

Most state benefits are means-tested, however, Attendance Allowance is a non-means tested, tax free state benefit, payable to all individuals over the age of 65 who have needed care (defined as help with essential daily tasks, such as washing and dressing) for longer than six consecutive months.

Attendance Allowance is available at two rates, a lower rate, for those who need help during the day or the night and a higher rate, for those needing care during both the day and night.

The current weekly figures are £47.10 lower rate and £70.35 for the higher rate.
Individuals needing care under the age of 65 will still qualify for an allowance, but this is paid in the form of Disability Living Allowance

Claim forms can be obtained from larger Post Offices, Citizens Advice Bureau, Age Concern Shops, the Benefits Agency or downloaded directly from the web site at:

www.dwp.gov.uk/lifeevent/benefits/attendance_allowance.asp or via the national helpline on 08457 123456.

A package of support may be available from the Department of Work and Pensions (DWP) and may be accessed directly. This system is accessed via the Pension Credit system which has replaced the Income Support system and is available to individuals aged 60 and over. This benefit is means tested, assessing both income and capital.

Whilst the initial levels of assets may exclude an individual from financial assistance, it may be that over time, the available capital will reduce to the point where help becomes available. In such an event, the Local Authority assessment criteria would apply. Under normal circumstances, entitlement to Pension Credit would arise in the first instance followed by Local Authority support once capital has declined below their prevailing threshold.

Because a property would not usually be involved at this stage, in most instances, the Local Authority would be the most attractive option once capital falls below their threshold.

Such circumstances may well result in a continued decline in the asset position. This is due to the calculation of tariff income and because local authorities tend to differ on tariff rates for care, which is lower than the variable cost of care and the top-up requirement will not generally be met by the authorities.

Because of the growing demand for care and the limited resources available, Local Authorities are facing a financial crisis. As a result, changes in future funding provisions may occur and individual situations will need to be assessed accordingly.

Providing the individual’s assessment of need confirms the requirement for care in a nursing or residential care home, the Local Authority will apply a “tariff or contract rate”, which is effectively the price that they consider appropriate for the assessed need. If the financial assessment identifies that an individual has capital of over £23,000 they will not qualify for assistance from the Local Authority until such a time as his capital is below this amount.

The tariff rate varies from authority to authority and according to the assessed level of need. From this figure will be deducted any income, i.e. pension, annuities and any entitlement to income support. The authority will provide top-up funding between the individual’s income and this tariff rate. The weekly sum of £21.90 of an individual's income is disregarded for personal expenses. However the individual is required to make a contribution depending on the value of savings between £14,000 and £23,000, for which a standard rate of income is assumed, based on £1 per week for every £250 or part thereof. Thus for an individual with savings of £23,000, the sum of £36 per week would be the required contribution. When assets decline to £14,000, there is no contribution in respect of savings.

In order to meet the costs of long term care, there are a number of basic strategies which can be pursued as follows:
1. Investment of the Capital relying on investment returns to "top up" income to meet the care fees
2. Immediate Care Plan whereby a lifetime income is purchased from a specialist provider.
3. Deferred Care Plan providing a lifetime income after a deferred period, also purchased from specialist providers.
4. Combination or Partial Care Plan utilising a combination of investments and care plans to provide income to meet the care fees.

Please visit our "Long Term Care Funding Solutions" page for further details of these options.

Has an enduring power of attorney been appointed?
This is a legal process whereby individuals give a family member, friend or legal representative the power to look after their financial affairs. The individual, acting as the donor; give permission for one or more people to act and make decisions about their finances (becoming the attorneys) on their behalf.

The given authority can be limited to one or two specific items or it can be all encompassing, but the whole process can only be established if the donor has full mental capacity.

Have you made a suitable will? Does it need updating if care is required?
Having an up to date will is the only way a person can be sure that their estate (i.e. their hard earned money) is distributed in accordance with their wishes.

If a will is not in place, or incorrectly drawn up, then the fairly strict rules of intestacy will apply to the estate. These laws can often be considered harsh, and in practice could be completely at odds with your real wishes.

If a loved one has died with assets of more than £5,000 then, if there is a Will, the executors must apply for a Grant of Probate or, if there is no Will, the next of kin must apply to the Courts for 'letters of administration'. Thereafter, the form filling, letter writing, phone calls and general sorting out of someone's estate can be quite stressful and very time consuming, especially if there's a property to sell. If you're in doubt as to whether you need a Grant of Probate or simply need guidance, simply call us without obligation.