Care Funding Advice
How to fund your care costs
There are many options for funding long-term care and they can often be complicated to understand. Long Term Care expert advice can give you peace of mind to those needing care and to their family.
Please contact us for advice in choosing the most suitable Long Term Care options to suit your needs.
Different ways to pay for care and support are now available, so people wont be forced to sell their home in their lifetime to pay for care. People who receive care and support from the council now have more say over what sort of help they get.
Immediate need care fee payment plans
Immediate need care fee payment plans are designed to fund care if you need it now by providing guaranteed monthly payments. It is an annuity which is a type of insurance policy that provides a regular income in exchange for an upfront lump sum investment.
When they are used for long-term care they provide a guaranteed income for life to pay for care costs.
Deferred payment agreements
Since April 2015, deferred payment agreements have been available from all councils across England.
A deferred payment agreement is where people can use the value of their homes to help pay care home costs. If you are eligible, the council can assist with paying for your care home bills on your behalf. You can then delay repaying the council until you choose to sell your home, or until after your death.
Deferred payment agreements may suit some more than others. Councils may charge interest on the amount owed to them, and there may be a fee for setting up a deferred payment arrangement up. This is to cover costs.
Eligibility for a deferred payment agreement
You should be eligible for a deferred payment agreement if:
- you are receiving care in a care home (or you are going to move into one soon)
- you own your own home (unless your partner or certain others live there)
- you have savings and investments of less than £23,250 (not including the value of your home or your pension pot)
To find out about your circumstances and whether you might be eligible for a deferred payment agreement, get in touch with your local council.
Repayment of a deferred payment agreement
You can sell your home and repay the deferred payment agreement at any point. Or you can have a deferred payment agreement for the full length of your stay in a care home and pay it back from your estate, following your death.
The amount you can defer will depend on the value of your home, which determines your 'equity limit'. As a guide, most people can use around 80% to 90% of the equity available in their home. The limit on equity is there to provide a buffer for additional costs like solicitors when you sell your home and to insure against house prices going down.
Your deferred payment agreement will end automatically following your death, and your executor will have 90 days to arrange payment of the money owed. If someone else (like a friend or relative) chooses to pay the bill, then your home will not have to be sold.
Gifting money or your home to your childrenYour home and your money still belong to you if you have a deferred payment agreement, so you can of course make gifts to your children. But a deferred payment agreement for care costs will always need to be repaid.
As at October 19th 2015