Cap on Care Costs
Many elderly people and their families are being lulled into a false sense of security regarding how the new cap on care funding will work.
While 8 out of 10 over 50’s were aware that the Government planned to introduce a cap, fewer than one in 10 of those questioned knew what the limits would be.
More worryingly the majority of people surveyed by SAGA thought that once a person needed care, the ‘meter’ was effectively running towards the cap. This is not necessarily the case.
Tim Pethick, the director of strategy for SAGE said “Our research clearly shows that the Government’s publicity machine has worked wonders in ensuring that people are aware of the new safety net they’ve introduced. But people are being lulled into a false sense of security.” He said many had been misled by the hype that they wouldn’t have to sell their homes. This is not the case.
He added, “it is clear that the mass confusion prevails around both the eligibility and calculation of the care cap. This lack of clarity does not bode well for the country, individuals or the politicians who will have to answer to the families that will still see their family home sold to fund care costs.”
Although some of the the details are yet to be finalised, we examine some of the common myths about care below.
UNDER THE NEW RULES I WON’T HAVE TO SELL MY HOME
MYTH: The Government has made much of the fact that its new rules won’t compel people to sell their homes when going into care. The common-sense interpretation of this means that the people going into care won’t have to sell their homes at all, and will be able to leave it to their children.
This is not the case. All the new rules will do is alter the timing of such a sale. Rather than be forced to sell it upfront when you go into care, the home will be sold after your death. The local authority will put a change on your home, which will be recouped from your estate.
THE MAXIMUM I WILL SPEND IS £70,000.
MYTH: It is expected that the cap will be set at this amount, however this does not mean that this is the maximum that you will have to pay for care.
The SAGE survey indicated that 69% of people thought accommodation costs would be included; they will not. A further 37% thought food costs would be covered; again, they will not.
This £70k ‘cap’ will also exclude some personal care costs, such as hairdressing costs, help with dressing etc.
It is unclear whether the cost of help at home or more informal care given by relatives will be included, but it seems pretty safe bet, that they will not.
If you need nursing care, the local authority will make an assessment of what it will pay towards the cost. If you cannot find a nursing home to deliver this care at this price, or you cannot find one you like within this budget, you or your family will have to ‘top up’ the difference. These additional payments will not count towards the care cap.
I WILL BE ABLE TO LEAVE A BIGGER INHERITANCE UNDER THE NEW RULES.
PART MYTH: This is not necessarily the case. The cap will help a small proportion of people who have substantial medical needs and spend years in care. But the average nursing home resident, who spends a little more than two years in care, will not really benefit from the change.
In addition, while it is possible for the local authority to put a charge on your home now. Under the new rules it will also charge interest on what will effectively be an equity release scheme. Rather than just paying for the care fees from the sale of the home, people face paying care fees plus interest.
A RELATIVE MAY NEED CARE SOON. I WILL BE BETTER OFF WAITING FOR THE NEW SYSTEM TO COME IN.
MYTH: This seems unlikely. If you are already paying for care, or getting a contribution from the local authority for nursing costs, this should still be taken into account once the new system comes into place.
There are also concerns that local authorities are going to struggle with the demands of the new system. Currently, many people who know they are not going to get any help with funding, arrange their own nursing care. Once the new system is in place many will demand health assessments to ensure that any care they are paying for counts towards the new cap. It is feared that the influx could swamp services, which hardly have much spare capacity at present. From next year, local authorities will also be required to value and place long-term loans on peoples properties. It remains to be seen what impact this will have on overstretched care services.
THERE WON’T BE ANY CHANGE TOP THE RULES NOW.
MYTH: Some of the new rules would come into force only after the next election. So it may be a new government takes yet another look at the whole area.
I OWN MY HOME. THERE IS NOTHING I CAN DO TO HELP COVER CARE COSTS.
MYTH: If a family members needs care it a good idea to contact us to arrange a FREE Estate Planning assessment.
(Source: www.telegraph.co.uk )
