Understanding Care Home Fees and Your Finances

Can a care home take all my money?

Many people worry about the financial implications of moving into a care home. It's a common concern that care homes might take all of your money, leaving you with nothing. However, the reality is more nuanced. While care homes can't take all your money, you may need to contribute a significant portion of your income and savings towards care home fees, depending on your financial situation.

The Capital Limit Explained

In the UK, there's a system in place that determines how much you need to contribute towards your care home fees. This system is based on what's called the 'capital limit'. Here's how it works:

If you have more than £23,250 in capital (including savings and investments), you'll need to pay the full cost of your care. This is often referred to as being a 'self-funder'.
If you have between £14,250 and £23,250 in capital, you'll need to contribute most of your weekly income towards care, plus an additional amount based on your capital.
If you have £14,250 or less in capital, you may qualify for financial assistance from your local authority. However, you'll still need to contribute most of your weekly income.

It's important to note that these thresholds can change, so it's always best to check the current figures with your local authority or a financial advisor.

What Counts as Capital?

When assessing your financial situation, the local authority will consider various forms of capital, including:

Savings in bank and building society accounts
Stocks and shares
Premium bonds
Property (in most cases)

However, certain assets may be excluded from the assessment, such as personal possessions and, in some cases, your home if a qualifying person continues to live there.

Common Questions About Care Home Fees

Do care homes take all your pension?

While care homes don't directly 'take' your pension, you may need to use most of it to pay for your care if you're a self-funder or contributing to your care costs. However, you should be left with a Personal Expenses Allowance, which is a minimum amount for your personal use.

What happens to my money if I go into a nursing home?

If you move into a nursing home, your finances will be assessed as described above. Depending on your capital, you may need to use your savings and income to pay for your care. However, there are rules in place to ensure you're not left without any money for personal expenses.

Protecting Your Assets

Many people are concerned about preserving their assets, particularly when it comes to leaving an inheritance. While it's natural to want to protect your wealth, it's important to understand the rules and implications surrounding this.

Can I give my money away before going into a nursing home?

This is a complex area and one that needs careful consideration. While you're free to give away your assets, if the local authority believes you've done this to avoid paying care fees (known as 'deliberate deprivation of assets'), they may still include those assets in their financial assessment.

The '7-year rule' is often mentioned in this context. This refers to the fact that gifts made more than 7 years before needing care are usually not considered in the financial assessment. However, this is not a guaranteed protection and each case is assessed individually.

How do I protect my inheritance from a nursing home?

There are legal ways to potentially protect some of your assets, such as:

Setting up a trust
Gifting assets well in advance of needing care
Investing in assets that are excluded from the financial assessment

However, these strategies can be complex and may have significant legal and tax implications. It's crucial to seek professional advice before taking any action.

Challenging Financial Assessments

If you believe your local authority has made an incorrect decision about your capital, you have the right to challenge it. Here's how:

Contact your local authority to understand their complaints procedure.
Provide clear reasons why you believe the decision is incorrect. For example, if they've included assets you've disposed of, explain why these were not related to avoiding care costs.
Include evidence to support your case, such as bank statements or legal documents.
If you're not satisfied with the response, you can escalate your complaint to the Local Government and Social Care Ombudsman.

Getting Financial Help

If you're struggling with care home fees, there are several avenues for potential help:

Local Authority Support: If your capital falls below the threshold, your local authority may provide financial assistance.
NHS Continuing Healthcare: If your care needs are primarily health-related, you might be eligible for full funding from the NHS.
Benefits: Ensure you're claiming all the benefits you're entitled to, such as Attendance Allowance.

While care homes can't take all your money, paying for care can have a significant impact on your finances. It's a complex area with many factors to consider. The key is to understand your rights, explore all available options, and seek professional advice when needed.

Remember, the goal is to ensure you or your loved one receives the necessary care while managing finances in the most effective way possible. Don't hesitate to reach out to financial advisors, care needs assessment teams, or organisations like Age UK for guidance and support.

If you’re interested in hearing about our care services at Ashberry, contact our team today.

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