If you are an elderly person who is about to move into a care home and are wondering what your options are with regards to paying for residential care, you will find everything you need to know in this handy guide.
Unfortunately, social care isn’t free which means you will have to pay in order to benefit from it. The amount of money you will have to pay for receiving social care will be calculated though a means test.
A financial means test (or financial assessment) looks at your financial situation to see if and how much the council will contribute towards your care, and how much money you need to pay yourself.
You can usually benefit from financial support if your income is under £23,250. However, you would also expect to be contributing towards your care as well. If your income is above £23,250, you will have to pay for social care yourself without benefiting from the support of the council.
The create an accurate financial assessment the council will look at your income and capital, which will include pensions, properties and saving. The council will also have a look at the benefits you’re eligible for, whether you’re claiming them or not.
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Yes, there are some circumstances in which your home will not be included in the means test and these are:
If your house is to be included in the means test, it will be valued at the current market value, minus any loan or mortgage that’s on it. Simultaneously, the house will be worth 10% less than its value for any expenses occurred when selling it. For more information on selling your house before the mortgage is paid, have a look at our blog post.
If your partner who you have joint ownership with is still living in the house then the council might not take the property into account for the means test, however if that’s not the case and you share the ownership of the property, the council will look into how much of it you own yourself and how much your partner owns, in order to calculate its value based solely on your part. It is not to be assumed that both partners share the property equally, and the council will need to investigate whether that’s the case or not.
Selling your home is a commonly used way of paying for residential care if you know you will be there permanently. However, if you don’t want to sell your property there are other ways you can go around it.
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It is common for people to give away their home to a relative instead of selling it, or in order for it not to be counted in the financial assessment. However, this could be seen by the council as deliberate deprivation of assets which means they will still calculate the amount of money you have to pay as if you were still the owner of the assets.
One way to avoid selling your home is by renting it out instead. This will give you a steady income for you to put towards your residential care pay. However, this means you will have the responsibilities of a landlord which can be quite time and money consuming in itself and a bit of a hassle, especially if you are of an older age.
This system will allow you to delay the payments of your care until later on. You can choose for the payments to be done after your death, in which case the money will be taken from the value of your property. This option will also give you time to sell your home if the process is proven to take a longer time than expected. If you need some advice on how to sell your house, check out our blog post. You will need to check with the council to see if you’re eligible to choose a deferred payment system.
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