Person going into care home thinks they have avoided selling their house to pay fees?

Yes, this was pointed out with the government’s plan to “cap” care fees, which they said would mean “no one had to lose their home”. In the N, the £86000 plus the “board and lodging costs” would take up most if not all the value of the house, in the SE it wouldn’t. OK, the plus side is that it easier for young people to buy in the N, on the other hand they don’t have advantages like adequate pubic transport, salaries are lower, etc

And they can only be offered that better rate because the care homes are charging self funders more, to cover the shortfall.
Self funders are subsidising council funded residents. There is no economy of scale involved because it's not cheaper to care for each council funded individual because of the council's block booking. They still need the same care.

Everybody with income over a certain level pays for social care via the tax system. And of course they can “adjust” their earnings, there’s a whole industry devoted to just that.

The Council buys at a huge discount. But the moneys aren’t separated so that they spend on each self funder the amount they put in, and on the LA funded only the amount they put in. So the net effect is that the self funders pay either to the care of the LA funded, or a disproportionate contribution to the profits.

There aren’t any “economies of scale”. It’s not any cheaper to look after 10 LA funded residents than 10 individual self funders … well, OK, it’s one invoice not 10, but against the scale of the fees that’s trivial.

This is what my Mum, siblings and I have done. She sold her house to move nearer to all of us though she couldn’t’ afford to buy one here. We all chipped in to make up the difference and had a ‘life rent’ agreement drawn up. The house is in our names, not my Mums. Not that I was bothered, it was my Mum who wanted this. But someone has to pay for a care home should that ever be required and it’s a bit like robbing Peter to pay Paul.

Everybody with income over a certain level
pays for healthcare via the tax system already, relative to their earnings. And people aren’t able to ‘adjust’ their earnings in order to deprive themselves of assets so their children can inherit them rather than the state taking the tax to apply to NHS funding.

But in some circumstances the state treats it as exactly the same thing. Some state benefits are withdrawn after a period of time in hospital with no account taken that the claimant still has bills to pay while an in patient. The view taken is that you are bing taken care of by the state while in hospital.

Not all care homes are in a massive chain. Some are independent.

Like Busy Bees vs a small daycare places, chains make more profit, not just through fees but through buying power, 1000 beds and armchairs and tvs and hoists and shower fittings a year for five new care homes, say, rather than a tenth of that.

Yes my Nan did exactly this with my dad, she’s in her chosen home which she absolutely loves, and her and my paps home has been sold and the moneys been put into trusts for the youngest generation. It was all really simple for us, so yes very doable.

@Wintercomesoon it will depend on their income and savings. You can still be expected to contribute if your income is high enough.

If you have been paying for hearing, lighting, water, Council tax etc. you may use that money to contribute to your care home costs.

You may also find if you have given your home away and it is considered deprivation of assets you will be charged as though you still own the asset.

The same way everyone who hasn’t been able to save any money or buy a house does. I assume elderly people in social housing aren’t expected to pay for their care ?

@EmmaGrundyForPM there are regional differences in housing affordability. Certainly in parts of the North younger people are buying homes. Young family friend, 24, bought a two bedroomed flat last year. He works, from home, for a company in a much more expensive part of England. The downside, older people needing care can’t raise as much by selling their homes.

@CatsnCoffee
Bonkers plan on so many levels.

DH and I want to give our house to our DC so they have assets when they come to apply for a mortgage in the future. We’ve been advised that a clause will be written into the agreement to give us home in the house as long as we’re alive.

Surely most of us buy a house for security, not because we want to leave something for our children. Also, our house is worth a lot of money not because we've earned it but because the housing market has risen hugely over the lifetime of our mortgage.

Our son works incredibly hard but is unlikely to ever be able to afford a to own his own home due to rising house prices. He had to move out of his house earlier this year as his landlord put it on the market. The (shared) house he's moved into has now just been put on the market so he's got to find somewhere else.

Everything goes in the pot regardless, that's what marriage is in terms of finances - a joining of assets. You can't access the assets that are solely in someone else's name without their permission and them facilitating it eg getting cash out of your spouse's bank account. But that doesn't change the fact it's basically as much yours as it is theirs. That's why financial abuse (basically denying your spouse money) is a thing that's illegal. It's why you can't claim means-tested benefits if your spouse earns over a certain amount or has significant savings, even though you may have absolutely nothing to your name £0 income or savings - in the eyes of the authorities, their money is your money.

If the two married people decide to say: this is mine and this is yours - that's upto them and as long as they agree, it's all fine and dandy. Legally it means nothing much though. It only becomes a problem when they divorce because there tends to be arguments about it!

If you don't want to join assets with someone - don't marry them. In the case of means-tested benefits you can't even live with them unmarried unless you're both willing to pool resources. If you don't want any financial ties at all with a partner, you need to live separately from them.

So long as they realise that the local authority will come after them not at the point she sells the house and "pays them back", ie gifts them money, but years later when all her money is gone and she needs local authority funding and they check into her finances and see she gave money away. The children need to have the money available to repay it if necessary, otherwise they could maybe face losing their own homes, having to sell up to raise the money to pay the local authority back the money she gave away, if they've no other savings/income to pay it from. If she dies before her money runs out it won't be an issue.

I agree with you, the assessment and eligibility for care needs is insufficient. Quality of life often seems to be irrelevant.

They'd have expected her to use the money from the sale of the house contents to purchase replacements so the house was fit to live in and if she didn't they'd have considered that a lifestyle choice. That family learned the hard way you can't choose when to go into a care home unless you're funding it yourself (or your relatives funding it, as in this lady's case). It's a difficult and inadequate system.

She wasn't overcharged though.

She was charged the going rate for an individual customer.

The council buys in bulk - economies of scale and all that - therefore they attract a better rate.

You've happily been misled/deluded by the care home manager who is grinding her axe that their overheads are too high to allow the required profit for their shareholders.

Then everything goes in the pot.

marriage = automatic owner of any assets. It doesn't matter who's name the asset is in.

I don't think that's true of all assets, is it? Except in the case where a couple is divorcing.

@Cathpot marriage = automatic owner of any assets. It doesn't matter who's name the asset is in. So your DM is co-owner of her DH house, by virtue of being married to him. She can't be kicked out and the house sold for his care, if he goes into a care home. If she goes into a care home too, then it's sold to pay towards both of them. If she dies while still living at home and before him, the house will be sold for his care fees.

@EleanorLucyG the money had to be found from somewhere - she certainly couldn't return to her house, whatever the council thought. I guess they'll cross that bridge when they come to it.

It really depends on when it was done and how it was done . I know someone who did this way before they were even poorly , over 10 years before , his son and family also moved in so that made it more believable as it was their main residence . They had no issues

Obviously if she'd been only paying for hey own care at the care home, she's still be self funding. She only ran out of money because she was overcharged. The council wouldn't be funding anything at this point if she'd only been paying the real cost of her care there.