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Advice on care

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Your Questions on Long Term Care Answered

The following questions are just some of the more common questions we have been asked regarding Long Term Care, paying for care and care fee annuities.

Click on any of interest and you will be taken to the answer. New FAQs will be added regularly and if you have a question that you have been unable to find a quick answer to below, please do not hesitate to contact us either by phoning us on FREEPHONE 0800 180 4336 or via our contact form.

 


When is the Cap on Personal Contribution coming in?

I have heard the Government is going to be reforming have care is funded in England, how will this affect needing to fund my mother’s care?

Whilst from October 2023 the Government will be:

  • Increasing the thresholds for qualifying for Local Authority funding in England from £23,250 to £100,000 assessable assets.
  • Introducing a Cap on what any individual will need to pay for their own care of £86,000.

and final details are still required, what is already known is that:

  • The Cap on personal contributions will only include the money spent on just the care element of any fees, not also the living costs such as food or room /accommodation fees.
  • Only “personal care” fees incurred post October 2023 will count and then only if your mother’s Local Authority has assessed she needs the care she is receiving.
  • Although the upper capital threshold will be increased to £100,000, they are only increasing the lower threshold from £14,250 to £20,000 This is important because although theoretically they should start to help once money drops below £100,000, before deciding whether they would fund care, they will look to see if your mother’s “assessable” income, including tariff or theoretical income they deem she could get from any savings greater than £20,000, exceeds what it would cost them to provide the care. If it does your mother may still not qualify. This “tariff” or theoretical income is calculated at the same arbitrary £1 per week for every £250 of savings rate as now applies. However, because the difference between the lower and upper threshold will be much greater, more tariff income will be included in total assessable income which could result in her total income exceeding what her Local Authority may otherwise need to pay, which means they may still not help.

So, although further clarification is awaited, in reality these changes may do little more than improve the minimum state funding that exists today. Consequently, if you want better quality of care, you may still want to consider alternative ways of paying for care.


Is there any way you can minimise the cost of care?

Yes there is.

First we would recommend you check that you are not entitled to free NHS Continuing healthcare or full Local Authority funding.

Then you should check you are all receiving all of the state benefits you are entitled to.

We would also suggest you should discover how much a care fees annuity would cost as these offer a great way of providing a guaranteed and tax-free income for life that can cap the future lifetime cost of care. You can discover more about these plans by visiting care fee annunities


How much do care fee annuities cost?

This is impossible to answer here as each one is individually priced and based on personal medical history and degree of care required as well as age and the amount of income required.

We would, however, be happy to get you medically underwritten quotes from ALL providers FREE OF CHARGE and without obligation if you simply complete our Quote Request Form and we will send a simple medical form for you to complete and return which we will then send off for you and obtain the quotes.


Can a care fees plan be purchased even after moving into a care home?

Q. My father aged 91 has now been in his care home for several years and is very happy where he is. I am now becoming concerned that his money will not last and I do not want to have to move him simply because his money runs out. I have heard about care fee annuities, but can I still obtain one even though he has now been living in his current care home for some time?  

A. Yes it doesn't matter how long your father has been residing in a care home.

The older someone is before applying for an annuity, the shorter their life expectancy will be and therefore premiums are only likely to be cheaper.

What you want to avoid, however is that fees do not erode too much of your father’s savings, before applying for one so we would recommend you request quotes before it is too late.

As impartial care fee advisers, we would be happy to obtain accurate quotes from all care fee annuity providers for you FREE OF CHARGE and without obligation.

To request quotes simply complete our Quote Request Form.


Will care fee plans continue to pay if needs improve or change care home or later qualify for free NHS Continuing Healthcare?

Q. If our mother's health improves and she leaves her care home to either stay with family/friends or alternatively wants, or needs to move care home, will the care plan still continue to pay?  

A. Yes care fee funding plans are portable

No matter what type of care is requires when you take out an annuity, the income will continue – even if you move into a care home or change care homes or even returns home.

The only point to note is that should the care no longer be provided by a Care Quality Commission registered care providers (such as a care home or care agency), or you become eligible for free NHS Care the income would cease being tax free.

However, it will only be the interest added by the provider that is taxed -not the return of the original premium. Therefore, although the current basic rate of tax is 20% (2022-23) the tax paid will not be 20% of the full monthly income paid but only a small proportion of each monthly instalment.

Read more about Care Fees Annuity.  


What is difference between Long Term Care Insurance and a Long Term Care Annuity?

Long Term Care Insurance was an insurance plan people could take out just in case you ever needed care at some stage in the future and were “pre-funded policies” Due to the fact that premiums were reviewable they were not very popular and ceased being available around 10 years ago.

A long-term care annuity on the otherhand is an annuity that can only be taken out when care is actually needed and provides a guaranteed income for the rest of the person needing care’s life in return for paying just one single premium which is guaranteed. The annuity provides a guaranteed monthly benefit which can be paid directly to the care provider and if it is paid directly to the care provider and they are Care Quality Commission (CQC) registered it benefits from being tax-free.

A long-term care annuity can be taken out by the person needing care or their legal representative providing the person needing care is aged 60+


Can I take out an insurance that will meet my cost of care if I need in the future?

Q. My mother needed nursing care and I was astonished at the cost of it and I am now worried that if I need care my children will never inherit anything. Is there any insurance I can take out now to protect me and my family against me ever needing care?

A. Depending on your age a few insurance companies are beginning to offer some limited long term care pay out as an additional benefit on critical illness policies and one Friendly Society has recently introduced a specific but limited Assisted Living Insurance that anyone between the ages of 50-76 can take out to provide a pot of money (either £20,000 or £30,000) to help pay towards some carers you may want whilst at home, help pay for respite care or equipment to help preserve your independence, should you lose your mental capacity or fail two or more activities of daily living. It would need to be purchased by paying a regular premium (which would normally escalate each year) and the amount being dependant on your age and health as well as the size of fund you want. It will not, however, pay an ongoing income to help meet care fees in a care home, so only offers limited protection.

Read more about long term care insurance.


What is the current capital threshold for long term care in England?

Q. What is the current capital threshold for long term care in England?

A. The Upper capital threshold, above which anyone has to pay for their own long term care (providing they do not qualify for free care under the NHS Continuing Healthcare) is just £23,250 in England. The lower capital threshold, below which you should be entitled to maximum local authority funding, is just £14,250 (England-2022-23).

Please note in both thresholds "capital" includes both your own and 50% of any jointly held savings and investments including deposits in banks and building societies as well as current accounts; ISA's, Shares, Unit Trusts or other collective investment accounts, National Savings and Government Bonds and buy to let properties. After the first 12 weeks of permanent care, it even includes the house if your spouse (if applicable) is not going to remain living in the property and no other family member aged either under 16 or over 60 (or any age if disabled) is to remain living in it.

Anyone with capital below £23,250 but above £14,250 will have any assessable capital which is above £14,250 converted into theoretical or "tariff income" at the rate of £1 per week for every £250 of capital above the lower threshold (2022-23). This is then added to your ordinary income from pensions etc and if the resulting combined income exceeds what the local authority is prepared to pay you will be deemed to be a self-funder and need to fund your own care.

This is where professional care fees advice from an impartial care fees adviser such as ourselves can help as we will look at what other funding options you may have.

Read more about how we can help at care fees advice page.  


What is the current capital threshold for long term care in Scotland?

Q. What is the current capital threshold for long term care in Scotland?

A. The Upper capital threshold, above which anyone living in Scotland and who doesn't qualify for free care under the NHS Continuing Healthcare, has to pay for their own long term care is just £29,750 (Scotland – 2022-23). 
Unlike in England however, Scottish residents are only means tested for the accommodation and food, often referred to as "Hotel" costs.  

Anyone who is assessed as needing care will receive Scotland’s Personal Care Contribution which is worth £212.85 per week (2022-23). Likewise, if nursing care is required, they will also receive an additional £95.80 per week (2022-23).

If assets fall below £18,500 you will also be eligible for maximum payments towards Hotel costs (Scotland – 2022-23).

Please note in both thresholds, "capital" includes both your own and 50% of any jointly held savings and investments including deposits in banks and building societies as well as current accounts; ISA's, Shares, Unit Trusts or other collective investment accounts, National Savings and Government Bonds and buy to let properties. 

After the first 12 weeks of permanent care, it even includes the house if your spouse (if applicable) is not going to remain living in the property and no other family member aged either under 16 or over 60 (or any age if disabled) is to remain living in it. 

Anyone with capital below £29,750 but above £18,500 (2022-23) will have any assessable capital which is above £18,500 converted into theoretical or "tariff income" at the rate of £1 per week for every £250 of capital above the lower threshold. This is then added to your ordinary income from pensions etc and if the resulting combined income exceeds what the local authority is prepared to pay for your accommodation costs, you will deemed to be a self-funder and need to fund your own care.

This is where professional care fees advice from an impartial care fees adviser such as ourselves, can help as we will look at what other funding options you may have.

To find out more about paying for care if you need to be a "self-funder" visit  paying for care.


What is the current capital threshold for long term care in Wales?

Q. What is the current capital threshold for long term care in Wales?

A. The Upper capital threshold, above which anyone living in Wales (and who doesn't qualify for free NHS Continuing Healthcare), has to pay for their own long term care is £24,000 if you require care at home, or £50,000 if you require residential care. (2022/3).There is no different lower capital threshold figure in Wales, unlike in England.

If you live in Wales and your capital exceeds £24,000 if require care at home or £50,000 if requiring residential care, you will be deemed to be a self-funder and need to fund your own care.

This is where professional care fees advice from an impartial care fees adviser such as ourselves can help as we will look at what other funding options you may have.

Read more about how we can help and how to book an appointment with one of our care fee consultants - care fees advice page

   

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