Paying for elderly care is the 2nd biggest expense for people during their lifetime
Paying for elderly care is the second-biggest expense to most people during their lifetime, this after buying a house. The Government’s proposals for how the State should help with care costs, was announced in early 2013, but the changes will not actually come into effect until 2017. Until then this literally means that hundreds of thousands of people will have to fight with the current complex Social Care system. Sadly some families are losing out on any form of financial help because their own or their loved ones’ needs have not been assessed correctly. Basic social care must be paid for by individuals or their families, but anyone assessed as having a ‘primary health need’ – as opposed to a ‘social care need’ – would normally be treated in hospital by the NHS free of charge, and is entitled to free care even where this is provided outside of a hospital. In such cases it falls to the person’s local primary care trust (PCT) to pay the bill. For more information on what a ‘primary health need’ is etc, please click on the weblinks below: http://www.ageuk.org.uk/health-wellbeing/doctors-hospitals/nhs-continuing-healthcare-and-nhs-funded-nursing-care/ http://www.nhs.uk/chq/Pages/2392.aspx?CategoryID=68 http://www.ageuk.org.uk/home-and-care/social-care-and-support-where-to-start/ When someone suffers a deterioration or change in their circumstances – for example, they leave hospital after receiving treatment for a fall - they should then be assessed for their ongoing care. These assessments should continue regularly/ongoing, even when patients are at home. However there are thousands of families trying to claim care costs back from their PCT that relates to care many believe should have been paid for by the PCT and not the family. As with many of our elderly today their health deteriorates and they must sell their home and move into sheltered housing or need to go into a nursing or care home. These costs vary greatly but can be for arguments sake as much as £1,700 a month, which can be paid out of the elderly persons pension or savings. As worse still some patients within the care home will not pay for their care. And so if you have a certain amount of savings, you will have to pay for this because you have saved up. Swift deadlines apply to the reclaiming of care costs and because of this, expert legal help is sometimes needed. The March 31 2013 deadline for claiming back nursing or care home fees wrongly imposed by health authorities applies to periods of care from April 1 2011 to March 31 2012. Therefore if an elderly frail man or woman with a property worth £250,000 but with little savings goes into a care home costing £900.00 a week it is likely that the elderly man or woman will have to pay the entire bill for their care – and he /she will have to sell their home to do so. An exception is if the need for help is linked to a specific medical condition when care is then defined as an NHS service and so provided free. But many struggle to get their needs classified as health related. For straightforward care there is no national system, and so every town or city will vary in what they offer. The person with care needs must at first be assessed to see and establish whether his or her needs are ‘low’, ‘moderate’, ‘substantial’ or ‘critical’. Next on the list is the ‘financial test’ where total assets including their home must be below £23,250.00. Or he or she will continue contributing to the care costs on a sliding scale until his or her assets drop to £14,250,00. After reaching this amount he or she will not need to pay anything. So alike many others, the person would pay the full costs of their care for many years before the local authority helped with the costs. So what would happen if the person’s money was depleted and her family could not afford to help with the care costs? In this case, it apparently is common that the local authority negotiates with the care home, which may even involve moving the care home resident to a cheaper room. What happens after 2017? There are 2 changes o how things are currently done. Firstly, help will be available once total assets fall below a £123,000 threshold. However, the person requiring care will only get help after spending £75,000 – this being the lifetime ‘care cap’ referred to by the Government. Additionally, you will have to spend far more than £75,000 to reach this cap as many of the costs don’t count. For instance, say the person is staying in a £900 a week nursing home, and the local authority where the maximum it will contribute towards the costs is £500.00. So then assume the total bill is broken down into roughly 50% spent on care such as help with dressing, meals and using the toilet) and the remainder 50% spent on living such as the food they eat and the , accommodation and heating. With this only the former care costs will count toward the cap. So of the £900 weekly outlay only about £300 is ‘on the meter’ – meaning she would have to stay for a number of years in the care home before reaching the £75,000 cap. If the person was richer, he or she would have spent about a lot more before reaching this cap. But in our example her home is worth £250,000 so he or she will be helped to some extent after he or she has spent £127,000 of her wealth down to the £123,000 threshold. Even then, however, the new system is not that generous. The help again applies on a sliding scale until the lower threshold of £17,500 is reached. Only when assets dwindle to this level would he or she not have to pay anything. And in this person’s case, because his or her home costs £900 a week rather than her local authority’s maximum £500, she will still have to find the £400 a week themselves. The Government hopes the £75,000 cap will make it easier for families to plan and for banks and insurers to offer schemes that can plug the gap. These could be insurance policies, or loans secured against properties, or a mix. They are expected to take years to develop. In the meantime, families will continue to struggle with varying rules and means tests. Financial advisers are becoming increasingly expert in the field of care cost provision and specialist firms, such as Partnership, offer annuity-type policies that convert lump sums into regular payments to care homes. It is more important than ever that people understand how the system works, seek advice and plan ahead.