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

[LindorDoubleChoc]

A distant relative has just sadly gone into care (dementia). He is not married but has a long-term partner with whom he has two adult children.

His family seem to think he won't have to sell his property to pay for the fees because "he has put his house in his son's name". I'm trying to think what this means and surely if it were that simple everyone would do it?

Are they misunderstanding the system? Or how could they have achieved this? They are in England.

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.

@CatsnCoffee
Bonkers plan on so many levels.

@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.

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 ?

@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.

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.

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.

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 Some state benefits are withdrawn after a period of time in hospital with no account taken that the claimant still has bills to pay while an in patient.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.

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.

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.

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.

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.

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.

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

More sad news for mumsnetters .... Plenty of people devote a lot of time and money to adjust their earnings in order to pay as little as possible in tax. In fact, the more people have, the more effort they devote to keeping it.

Surely most of us buy a house for security, not because we want to leave something for our children. I’m wondering whether there’s a generation gap. My father, growing up in the Depression, with no NHS, saved for his children and grandchildren. Most people on this thread, used to elderly relatives being effectively treated for heart problems and even cancer, and surviving into a long drawn out dementia, save for their own care.

The way house prices are going and out of step with salary increases, I'd certainly be wanting to leave money to buy property to my children.

I'd rather go to a LA care home than a private one if it meant I could do that but of course if I knew I'd need care it would rightly be seen as deprivation of assets so I don't know what the solution is, other than downsize when the kids are independent and before I get old enough to need care.

Traditionally people bought houses for security. They knew homes might be sold for care.

Of course there is an economy of scale from the LAs perspective. It's the same with, say, hotel rooms. Government rates are much cheaper than the rate an individual will pay for entirely the same service due to their regular and repeated purchase.

The homes could always refuse the business and attract private individuals at what they claim the 'real' rate is couldn't they? Got to wonder if their business plan has a major flaw in that they believed their shareholders could suck greedily on the taxpayer teat for the easiest profit ever.

I applaud councils' desire to obtain the best price they can for the services they require, subject of course to quality control.

Axa, for example, will have à reimbursement rate with private healthcare consultants that is lower than the self pay rate. Discounts for purchasing power is not unusual.

I dispute the “suck at the taxpayer teat” language, but it absolutely is reasonable to build a care home with the assumption that some residents will be partly or fully funded by the LA. Why is that unreasonable?

My cousin and his wife have put their home in trust with their two DC being the trustees. It is tied up so tightly that they aren't allowed to be evicted. The house can only be sold once they are both either in a care home or are deceased.

A friend of mine has recently put her home in trust with her DD being the trustee. She had to write a very lengthy statement to say why she was doing this so that it couldn't be described as 'deprivation of assets'. Her reason was that she was estranged from her eldest DC (half-sibling to DD) and she absolutely did not want him to benefit from the sale of the house once she had passed. Instead of doing this, personally, I would have just attached the same statement to a Will (my DP has done this) and it would have been a fraction of the cost of setting up a trust! Providing the statement is strong enough, if the Will is contested, the judge will usually go with the wishes of the deceased.

If you want to leave an inheritance and your house is close to or over the IHT limit, far better to sell ypur home or release equity to cover care fees than to use a personal pension.
Pensions don’t count towards IHT ( unless over the lifetime allowancce of £1 million and can be inherited tax free at the monent if you die before 75.
After 75, you pay tax on the income or you can pass it on tax free etc. etc.

My elderly aunt self funds and pays £1000 a month more than LA funded residents. The LA secures care at a lower rate because of their buying power but this is how the homes make up the shortfall. In the three years she’s been in care she’s subsidised others to the tune of £36,000, meaning she will run out of funding that much sooner and be at the mercy of the LA, which includes moving her to a different care home if no LA funded places are available when her funding pot runs dry.