1 March 2018

Funding Long-term Care - Myths

Sorting out funding for care in later life is normally a once-in-a-lifetime requirement (although I guess you may have more dependant relations and friends than me!). So knowledge about the subject is not particularly widespread, resulting in some myths...

1. Care Funding is Free
False! It's easy to confuse healthcare services (free via the NHS) and social care services (which are means-tested by the local authority - unless you qualify for NHS Continuing Healthcare funding). But in England, if you have more than £23,250 in assets (including your property if no-one else lives there) you will have to pay the full cost for social care fees.

2. If you run out of money paying for social care the State will pick up the cost
False! The local authority will often only pay a lower amount than the actual cost, so a top-up is needed. And if you run out of money then you may have to move somewhere cheaper that fits within the local authority's budget.

3. Either I have the money or I don't - a financial adviser won't help
False! Only registered financial advisers can advise on all the different ways of paying for care, including Immediate Care Annuities.

4. Attendance Allowance can't be paid when in a residential care home
False! AA is a non-means-tested benefit, paid tax-free towards the cost of living with a disability.

5. My local authority will tell me whether I am entitled to payments or not
Not necessarily accurately! It is a complex system with "fault lines" between health and social care, and differences in interpretation between local authorities.

6. Care in my own home will be more expensive than in a residential care home
False! Domiciliary care is not necessarily more expensive since the accommodation costs don't need to be paid for. You are also more in control of what level of care you have.

7. It is good financial planning to give away my assets before I need care
Beware! While it is true that social care costs are means-tested, local authorities are able to look at your financial history and if it appears that you deliberately deprived yourself of assets then those gifts can be treated as "notional capital" which still belongs to you.

8. I will have to sell my home to pay for care
Not necessarily. The rules are complicated but it is certainly not a foregone conclusion.

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