My sister moved into my parents’ home nine years ago to help my mum care for my dad. My dad has dementia, Alzheimer’s and Parkinson’s.
My mum sadly passed away last December, which left only my sister (and her two daughters) to look after dad.
My dad has since (due to gangrene) has had his left leg amputated. He now needs 24 hours’ care and has to be put into a residential care home.
My dad has no savings but owns his own house. Will we have to sell the house to pay for his care or does my sister have any rights as she will be homeless if we would have to sell? We are in Essex.
Tanya Jefferies, of This is Money, replies: I am very sorry to hear about your dad’s poor health, and your sister’s situation.
Your local authority should give you detailed information on what might happen to your parents’ home under these circumstances. Essex County Council explains charges for social care and what people are expected to contribute towards them here.
HOW THIS IS MONEY CAN HELP
We asked Age UK to explain how local authorities generally handle family situations like yours, and its reply is below.
How people should pay for social care became a contentious issue in the last election. The Tories were forced to retreat on a key manifesto pledge after an outcry against its plan to deplete an individual’s assets – including their home – down to a £100,000 floor, no matter whether they need care in their own home or in a residential home.
The Government is expected to launch a social care consultation next summer, and we asked Aegon’s pensions director Steven Cameron to explain where matters currently stand and what people trying to plan to pay care costs should do now.
Michael Roche: ‘Under normal circumstances, your father’s house would be included in the assessment of his assets’
Michael Roche, technical advice support officer for social care at Age UK, replies: Under normal circumstances, your father’s house would be included in the assessment of his assets as part of his means test for social care in light of a permanent move into residential care.
There are certain situations where the council must discount a property as an asset, known as ‘mandatory disregards’. These apply if another person living in your father’s house is:
* A relative or member of his family who is: aged 60 or over; a child of his aged under 18; incapacitated
* A partner, former partner or civil partner, except where the couple is estranged
* A lone parent who is the estranged or divorced partner of the property owner.
If your sister meets any of these criteria, the mandatory disregard applies.
However, if she does not, local authorities can still make individual exceptions at their discretion, and must give this full consideration if your sister requests a ‘discretionary disregard’.
The guidance to local authorities on how they should apply this discretion includes examples that have similarities to your sister’s situation.
If the local authority decides not to use their discretion to disregard they must explain why they have made this decision in your family’s case.
If your family is not satisfied with the decision you can make a formal complaint through the local authority complaints procedure.
Alternatively your father, or someone who is permitted to act on his behalf, can ask for a deferred payment.
This means that the costs of care will be met by the local authority, in line with your father’s care arrangements, as a loan secured against the house.
This will be repaid from the proceeds of the house sale after they have passed away (with some additional administration fees and interest payments). In this situation the house would not need to be sold immediately.
Age UK’s factsheet Property and paying for residential care explains in more detail how property is treated by the local authority with regards to full time residential care. You can download the factsheet from Age UK’s website www.ageuk.org.uk or order a free copy from the Charity’s advice line, free of charge, on 0800 169 6565.
Steven Cameron, pensions director at Aegon, says: Social care funding turned out to be one of the thorniest issues of the election campaign with opposing views on how to solve the growing crisis of an ageing society.
The Conservative Manifesto proposed individuals would have to pay for their own care until their assets including their house had fallen to £100,000.
Steven Cameron: ‘Social care funding turned out to be one of the thorniest issues of the election campaign’
This proposal received little support, with the opposition calling it a ‘dementia tax’, despite the current system being worse for many as it can mean individuals are paying their own way until their assets fall to £23,250.
The Conservatives later announced there would be a cap on the maximum someone would have to pay.
Labour’s Manifesto talked of aiming for cross-party consensus while exploring a range of Government led funding options including a wealth tax, an employer care contribution and a new social care levy.
We had expected the government by now to have launched a wide consultation looking at a variety of social care funding proposals but frustratingly, it recently confirmed this won’t happen till next summer.
In the meantime, it is consulting privately with experts in this field, but this debate has been ongoing for many years and the public also deserve to have their say on what’s fair regarding sharing costs between individuals and the state.
Individuals who want to start planning ahead now for possible social care costs in later life have been left in limbo.
One option is to seek advice on building this into broader retirement planning. The new pension freedoms grant those with defined contribution pensions complete flexibility on how much income to take from their pension year on year, and also remove previous tax penalties if funds are left unused on death.
Individuals could consider setting aside part of their retirement pot so it’s there if needed to pay for care later. But this does mean pension funds will need to stretch further.
It’s possible that the Government’s consultation will offer up other possible solutions. In this complex area, we strongly recommend people always seek advice.
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