Care home fees

[whowhatwerewhy]

Can someone please explain how the care home fees work ?
Relative will be self funding a care home but I think there is a new rule you only pay so much for your lifetime (85k ?)
Can anyone explain how this works?

This is not coming into practice until October 2023 and will not include retrospective fees paid. It will only cover care fees, not accommodation and I assume after the £86,000 veiling has been hit the care home will claim from local authority or something. It is still a way off though and even may be withdrawn

If they're going into care now then the threshold before the council pays is £23250 and the new rules won't apply to them when they come in.

Thank you . She's going into care now , and will be self funded. So new rules won't apply to at all once they come into affect

They will apply to her when they come into affect. It will start counting the amount paid from oct 2023 and when the £86000 is reached the care home will have to claim the care fees they charge.

Which part of the UK, OP ?
In Scotland there is a weekly element for personal and nursing care that can be deducted from the weekly care home charge which can make a significant saving. (Personal care £212.85, nursing care £95.80= £308.65)
That's why care homes just over the Scotland/ England border are busy.

Unfortunately not Scotland.
She can self fund for a while and has a property to sell .
Looks like all but 23k will go on care home fees

Well yes, it will, as it should.

@ashmoleansrfc
I have not said she shouldn't pay her own care bills . I was asking about the new rules.

I think it will depend how much she has? The new rule will still apply (is my understanding) but her pot will only start as of October next year. If you assume £1000 a week, that'll be around £70,000 til October, and then the £86k on top so if she's got more than around £150k as equity in her home, she'll still be better off. Quite possible depending on where she lives and how much her care fees are in the interim

I think she can legally gift £3k.per year to family. In each tax year. She should do this. Sorry she is having to go into a home.

Thank you @caringcarer
I don't think she will be able to gift her money now as she's lost capacity .

@caringcarer if shevis already in receipt of care a £3,000 gift would be considered deprivation of assets.

Thank you @AndSoFinally
I know she's able to fund herself for a while before selling her home .
I don't understand the new rules so was thinking the house could be rented out , she could use the money from the rent towards her care .
I thought maybe delaying the house sale would give her extra money to keep self funding.

My understanding is it will not work like that say fees are £1000.00 a week potentially only 50% will be care fees and 50% will be 'hotel' costs so if you pay £86,000.00 only £43,000.00 will count towards the care cap so in reality you would pay £172,000 to have paid enough towards the care cap

@Firstsitdowntoday
You have a good point .
So it could be she self funds until next October. Then has to pay 86k towards her care + "hotel " fees . Then she just pays the "hotel " part until she's out of money . That's if she can self fund that long

The £86,000 cap only counts towards care fees. So people will be paying much more than £86,000 to reach the £86,000 cap. Then as you say once the reach the cap they will continue to pay hotel costs.

I think you can rent the house out. Obviously no idea circumstances but if care is £4K a month and she gets £1K in state pension and maybe same in a private pension and £2k for house rent you could make cash spin out a while , all the time preserving the house

@Mum5net
That's what I was thinking.
I'm under no discussion the house will have to be sold at some point .
But if and it's a big if ,she can self fund until next October, then if she can fund the 86k ( or more )the rent from the house would then help pay the "hotel " fees .

I've no clue how it works but I would like her money to help fund her for as long as possible.

Worth remembering that even those with no savings contribute the vast majority of their income (state or private) to their residential care (soon to be 'hotel') costs.

Need to sit down with the calculator 🤣.
At least I know she will be funding herself until next October.
Then after October she will be expected to fund the 86k of her care plus's the " hotel "fees . Then it will reduce down to just " hotel" fees until her money reaches the threshold.

Probably not what you want to hear but I believe that you can prepay their funeral costs before they go in.

@PritiPatelsMaker
Thank you , her funeral has already been paid for .

No, that’s an Inheritance Tax rule, and not at all relevant here. If she starts giving money away when she needs care, the local authority can regard this as “deprivation of assets” and treat her as if she still had those assets. So if she were in a care home for three years, and had got down to £23k having given away a total of £9k, the LA would say “no you’re not down to £23k, you’ve actually got £32. Come and talk again when you’ve spent another £9k on care”

In the same way as people have to dig into their savings to pay for medical care, you mean?

Virtually every other major disaster that can befall one can either be insured against (house fire for example) or is in effect insured through the tax system (medical care, costs of rescue after an accident in the outdoors). Just elderly care which is left to the individual - even under the new system.

But how on earth would the local authority know what your relative sold their house for and what leans, such as equity mortgages, are against it? Are they involved in the sale in some way, even though your relative won't be funded by them?