The cost of long-term care is a growing concern for many homeowners, and research on the projected costs of long-term care for older people in England reflects what families face today, with the average residential care home in the UK costing around £800-£1,200 per week, and even more for nursing care.
Many people fear they will have to sell their home to cover these expenses, especially since local authorities, constrained by debates over the right level of spending needed for health and care, may only help if your total assets (including property) fall below £23,250 in England (£50,000 in Wales and £18,500 in Scotland).
However, selling your home isn’t always the only option because you can reduce the care home fees in many ways. So, how to avoid selling your house to pay for care, what other options are there, and can the government even take away your house to pay for care?
Can the Government Take Your House to Pay for Care?
Yes, the government holds the power to seize your house for care payment, yet it’s bound by the details of your situation and the type of care you require. In the UK, for example, if you require long-term residential care, your local council will conduct a financial assessment to determine how much you must contribute.
If the sum of your assets, which includes savings and property, climbs over a preset limit (currently £23,250 in England), you will be charged the full expenses for your care. This indicates that your house might be factored into this calculation, unless there are certain exceptions at play; for example, if a spouse or an economically dependent relative continues to reside there.
However, there are protections in place to prevent immediate home loss. For instance, under the Care and support statutory guidance, the 12-week property disregard means that if you move into a care home permanently, your home will not be counted as an asset for the first 12 weeks.
This gives you some time to explore other options, such as deferred payment schemes, where the council covers your care costs, and repayment is made from your estate after your passing. Additionally, if you receive care at home rather than moving into a care facility, your property is not considered in the financial assessment.
It’s essential to plan ahead to protect your assets from being used entirely for care costs. Some people choose to set up trusts, transfer property ownership, or seek financial advice to explore legal ways of safeguarding their home.
However, deliberate attempts to avoid paying for care, such as gifting property shortly before needing care, may be considered “deprivation of assets,” and the council can still assess the home’s value as if you still owned it.
Consulting with a legal or financial expert can help you understand the best approach based on your personal situation. So there’s not really a reason for selling parents’ house to pay for care UK if you can take advantage of other options.
How to Avoid Selling Your House to Pay for Care?
Long-term care expenses can put a dent in your savings, and the thought of potentially having to dispose of your home to gather funds can be nerve-wracking.
However, safeguarding your home while receiving essential care services isn’t out of reach. Effective planning, understanding available state support, and examining unconventional funding avenues can aid you in retaining your dwelling.
An alternative is to see if you’re eligible for care funded by the government. Some local bodies might offer financial support contingent on your wealth accumulation and revenue stream. When a spouse or dependent continues to reside in the house, it’s possible for the property to be excluded from being appraised for finance, saving you from feeling cornered to sell.
Additionally, certain individuals might be qualified for NHS Continuing Healthcare. This service caters fully to care expenses without persuading a property sale.
A secondary route is establishing a legal trust. Transitioning your property into a trust restricts it from being considered as part of your wealth during an estimation of caregiving costs. Still, this should be initiated well ahead and under expert legal guidance to confirm it aligns with specific laws.
Additionally, transferring your house as a gift to kin is available as a fair option but comes with stringent guidelines to prevent individuals from purposely dodging caregiving fees.
A qualifying dependent may include any of the following individuals who also reside in your home:
- Your spouse
- Your civil partner
- Your unmarried partner
- A close relative over 60 or an incapacitated close relative
- A close relative under 16 for whom you have legal responsibility
- Your ex-spouse or former partner, if they are a single parent
Equity discharge programs permit property owners to procure finances without needing to part with their home entirely. They bring about a stable revenue flow or an immediate considerable amount of money to deal with the costs of care while securing your stay in your own house. Nonetheless, it’s indispensable to judiciously weigh up the enduring outcome of equity liberation as it has a potential impact on inheritance and comprehensive economic stability.
However, you should always be prepared and think ahead. By looking for counsel from a finance expert or elderly care connoisseur, exploration, understanding, and selection from the myriad alternatives become simplified. Walking down the path of anticipation allows you to shield your home while providing you the necessary care, minus unwanted financial burden.
Can I Get Financial Assistance for Care Fees?
Financial aid towards care costs may be available to you, contingent on your economic position. A ‘means test’ is necessary to examine eligibility – this test appraises your income and belongings.
What’s the process of testing like? A means evaluation looks at both your money inflow (an oxymoron, living paycheck-to-paycheck, like wages, pensions, and grants) and your resources (savings, funds in which you’ve entrusted your cash, and real estate). The assessment depends on your living situation:
- If you live at home or have qualifying dependents residing there, the value of your property will not be included.
- If you require permanent residential care, your property’s value will be considered as capital after 12 weeks. This period allows time to sell the property or set up a deferred payment agreement with your local council.
- If you jointly own a property and move into residential care permanently, your share of the property may be counted in the means test.
Once your financial situation is assessed, it is compared against the national thresholds to determine the level of support you may receive.
Care Cost Thresholds in the UK
| Region | Lower Threshold | Upper Threshold |
| England | £14,250 | £23,250 |
| Wales | £24,000 (home care) £50,000 (residential care) | £50,000 |
| Scotland | £21,500 | £35,000 |
| Northern Ireland | £14,250 | £23,250 |
- If your assets are above the upper threshold, you will generally not receive financial support.
- If your assets are below the lower threshold, you are entitled to the maximum care fee support from your local authority.
- If your assets fall between the thresholds, the level of assistance depends on your individual circumstances.
Important considerations:
- If the value of your home is included in the means test, you may exceed the threshold and be ineligible for local authority support.
- Deferred payment agreements can help cover care costs without needing to sell your home immediately.
For further guidance, contact your local council or a financial advisor specializing in care costs.
Can I Give My Home or Other Assets Away to Avoid Care Fees?
What if I transfer my assets to my children? Would that help me avoid care fees? – While it may seem like a straightforward solution, the rules surrounding this are far more complex than you might think.
What is Deprivation of Assets?
Asset deprivation happens when a person intentionally shrinks their wealth, like giving away gifts or savings, so it’s not counted in a monetary check for nursing home fees. Let’s say you transfer your house to your kid just before heading into care; it might be seen as an intentional deprivation act.
Should your local council ascertain that you’ve deliberately lessened your riches to sidestep care charges, they can review your financials as if those assets remained in your name. Bear in mind, on occasion, you could even come face-to-face with legal woes.
It’s not the same game as inheritance tax, where gifted items are not taxed following a 7-year period; No such time boundary exists for asset deprivation. So any gifts handed out years prior to requiring care could still fall under scrutiny.
Are Next of Kin Responsible for Care Home Fees?
If you share assets with your spouse (e.g., joint bank accounts or property), these will be included in your means test.
However, assets solely owned by your spouse (e.g., individual bank accounts or investments) are not counted. That said, transferring all your assets to your spouse at the last minute could still be considered deprivation of assets.
The good news is that your children’s possessions are entirely distinct from yours and never factor into your financial assessment.
If you need any help, feel free to contact us at Oakland Care Group. However, for expert guidance, we recommend reaching out to a qualified independent financial advisor (IFA).
