How Will You Pay If You Need Residential Care In The Future?
None of us likes to think about the day when we may no longer be able to do things for ourselves but instead have to rely on others to care for us.
If you or a relative are thinking about going into care in the UK, you will have questions about how it gets paid for.
Who pays? Once it is established that you need care the Local Authority do a financial assessment or 'means test' on the value of your assets including savings, investments and property.
They will look at your income, and the shortfall between that and the cost of your care is primarily paid from your capital.
The amount you will have to pay will depend on the value of your capital.
The limits are set each year by the government.
If you own your home it is likely you will start off being assessed as 'self-funding'.
However, in many cases the value of your property will be disregarded.
If you own your own property, seek advice as to whether it has been correctly taken into account in the assessment.
How do I pay for my own care? If after the assessment you have to pay the care costs yourself, there is no doubt that it will be expensive.
It's thought the average care home can cost upwards of £20,000 a year.
First work out how big the problem is.
Calculate your annual income and the annual cost of the care you need.
Then you will know how much extra income you need to generate each year.
There are various options available which you may not have considered.
You may be entitled to certain benefits such as Attendance Allowance and Registered Nursing Care Contribution.
And for some, buying an immediate annuity can be a sensible solution.
Do I have to sell my house? It's a myth that the local authority can force you to sell your house.
They can however clock up the fees they pay against your title deeds so that when you do sell, they get first bite.
You can rent it out and use the rental income to cover part of the shortfall.
Or you can sell and the sale proceeds are your money and should be invested to maximise the income available to you.
The Green Paper As we are all living longer, the government has started a public debate about how the nation will pay for care in the future.
You can have your say about the proposed changes until November.
Heather Kirk, a Solicitor, comments: "Every person's financial circumstances are different and one size doesn't fit all.
It's important to get professional advice if you or a relative are considering going into a care home.
"
If you or a relative are thinking about going into care in the UK, you will have questions about how it gets paid for.
Who pays? Once it is established that you need care the Local Authority do a financial assessment or 'means test' on the value of your assets including savings, investments and property.
They will look at your income, and the shortfall between that and the cost of your care is primarily paid from your capital.
The amount you will have to pay will depend on the value of your capital.
The limits are set each year by the government.
If you own your home it is likely you will start off being assessed as 'self-funding'.
However, in many cases the value of your property will be disregarded.
If you own your own property, seek advice as to whether it has been correctly taken into account in the assessment.
How do I pay for my own care? If after the assessment you have to pay the care costs yourself, there is no doubt that it will be expensive.
It's thought the average care home can cost upwards of £20,000 a year.
First work out how big the problem is.
Calculate your annual income and the annual cost of the care you need.
Then you will know how much extra income you need to generate each year.
There are various options available which you may not have considered.
You may be entitled to certain benefits such as Attendance Allowance and Registered Nursing Care Contribution.
And for some, buying an immediate annuity can be a sensible solution.
Do I have to sell my house? It's a myth that the local authority can force you to sell your house.
They can however clock up the fees they pay against your title deeds so that when you do sell, they get first bite.
You can rent it out and use the rental income to cover part of the shortfall.
Or you can sell and the sale proceeds are your money and should be invested to maximise the income available to you.
The Green Paper As we are all living longer, the government has started a public debate about how the nation will pay for care in the future.
You can have your say about the proposed changes until November.
Heather Kirk, a Solicitor, comments: "Every person's financial circumstances are different and one size doesn't fit all.
It's important to get professional advice if you or a relative are considering going into a care home.
"
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