Understanding power of attorney and Care Home fees

When it comes to caring for a loved one, especially when considering the move to a care home, understanding the financial aspects can be daunting.

One crucial element in managing these finances is understanding the power of attorney and how it impacts care home fees.

This guide aims to explain these topics and provide you with the knowledge needed to make informed decisions for your loved one’s well-being.
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What is Power of Attorney?

Power of Attorney (PoA) is a legal document that grants one person (the attorney) the authority to make decisions on behalf of another person (the donor) should they become unable to do so themselves.

This can encompass a range of decisions, from managing finances to making healthcare choices. There are different types of PoA, each serving distinct purposes:

1. Lasting Power of Attorney (LPA): There are two types of LPAs – one for health and welfare and another for property and financial affairs.
   • Health and Welfare LPA: Allows the attorney to make decisions about medical care, living arrangements, and daily routines.
   • Property and Financial Affairs LPA: Enables the attorney to manage finances, pay bills, and handle property transactions.
2. Enduring Power of Attorney (EPA): Only covers financial decisions and was replaced by LPA in 2007. However, existing EPAs remain valid.
3. Ordinary Power of Attorney: Valid only while the donor has mental capacity and typically used for temporary situations.
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Why is Power of Attorney Important?

Establishing a PoA ensures that someone trusted can make decisions in the best interest of your loved one if they lose the capacity to do so. This legal arrangement is vital for managing care home fees and other financial obligations seamlessly.
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Understanding Care Home Fees

Care home fees can vary significantly depending on the type of care required and the location of the home. Here’s a breakdown of the typical costs and considerations:
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Types of Care Homes and Their Costs

1. Residential Care Homes:
   • Provide accommodation and personal care, such as help with washing, dressing, and taking medication.
   • Average cost: £700 – £1,000 per week.
2. Nursing Homes:
   • Offer the same services as residential care homes but with the addition of 24-hour medical care by qualified nurses.
   • Average cost: £800 – £1,400 per week.
3. Specialist Dementia Care Homes:
   • Cater specifically to individuals with dementia, providing specialised care and support.
   • Average cost: £800 – £1,400 per week.

Factors Influencing Care Home Costs

• Location: Care homes in the South of England, particularly in London, tend to be more expensive than those in the North or rural areas.
• Level of Care Required: Higher levels of care, such as nursing care or specialised dementia care, will increase costs.
• Facilities and Services: Homes offering luxury facilities, private rooms, and a wide range of activities may charge higher fees.
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How PoA Can Help Manage Care Home Fees

Having a Property and Financial Affairs LPA can significantly ease the process of managing care home fees. Here’s how:
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Financial Management

• Paying Fees: The attorney can ensure timely payment of care home fees, avoiding any potential legal or financial complications.
• Accessing Funds: The attorney can access the donor’s bank accounts, pensions, and other financial resources to cover care costs.
• Selling Property: If necessary, the attorney can manage the sale of property to fund care home expenses.
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Benefits and Entitlements

The attorney can also apply for benefits and entitlements on behalf of the donor, which can help offset care home costs:

• Attendance Allowance: A non-means-tested benefit for those over 65 who need help with personal care due to illness or disability.
• NHS Continuing Healthcare: Fully funded care for individuals with significant health needs, assessed by the NHS.
• Local Authority Funding: Depending on the donor’s financial situation, they may be eligible for local authority support in paying for care.
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Legal Safeguards and Responsibilities

Attorneys must act in the donor’s best interest and follow the principles set out by the Mental Capacity Act 2005. This includes:

• Maintaining Accurate Records: Keeping detailed records of all financial transactions and decisions made.
• Consulting the Donor: As much as possible, involving the donor in decision-making.
• Acting Within Legal Boundaries: Understanding and adhering to the legal limits of their authority.
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Steps to Setting Up a Power of Attorney

Setting up a PoA involves several steps to ensure it is legally binding and effective:

1. Choose the Right Type of PoA: Determine whether an LPA for health and welfare, property and financial affairs, or both is needed.
2. Select Your Attorney: Choose someone trustworthy and capable of managing responsibilities.
3. Complete the Forms: Obtain and fill out the necessary forms from the Office of the Public Guardian (OPG).
4. Register the PoA: Submit the completed forms to the Office of the Public Guardian and pay the registration fee. The process can take up to 10 weeks.
5. Notify Relevant Parties: Inform banks, care homes, and other relevant organisations about the PoA once it is registered.

Understanding the features and expectations of a Power of Attorney arrangement and care home fees can be challenging, but understanding these elements is crucial for ensuring your loved one’s financial and personal well-being.

By setting up a Power of Attorney, you can confidently manage care home fees and make informed decisions that align with your loved one’s best interests.

For more information and assistance, consider consulting legal experts or financial advisors who specialise in elderly care. Taking these proactive measures will provide peace of mind and ensure your loved one receives the care they deserve.

Enquire today and the friendly team here at Ashberry Care Homes can help point you in the right direction.