When Long Term Care Looms.
Eleven tips to help keep the cost and problems associated with long term care to a minimum. But the biggest tip on long term care is to get our booklet well in advance. If it is too late for you, pass it to your friends or children so they can be prepared.
1. Delay the need for long term care.
Good care in your own home can delay going into Long Term Care. Cost of carers vary widely, but make sure that they are CRB checked to ensure they have no criminal record! Care can provided by your local social services department or by an agency. They visit you to help with meals or dressing and undressing or shopping or whatever you need. But don’t use a qualified nurse to do the cleaning! You can have a carer stay overnight or even to arrange full-time care at home. Before you receive this service, your level of need will have to be assessed. 24 hour care is very expensive, probably more so than being in a Nursing Home.
You may be entitled to ‘direct payments’. These local council payments for people who have been assessed as needing social services help but want to organise such services themselves. The real cost of care at home can also be kept down by claiming Attendance Allowance (see below).
2. Claim Attendance Allowance.
Attendance Allowance is a tax-free benefit for people aged 65 or over who need help with personal care because they are physically or mentally impaired.
There are 3 rates:
- Standard Rate Attendance Allowance for help during the day or during the night (but not both)
- Higher Rate Attendance Allowance for help during both the day and night.
- There is also a ‘low’ rate of £18.65. It is paid regardless of your level of income or savings.
- Claim Attendance Allowance by calling the Benefit Enquiry Line on 0800 882 200 or online at www.dwp.gov.uk/eservice.
3. Speak to the charity professionals.
Help the Aged’s Senior Line provides welfare rights advice for older folk and carers on 0808 800 6565.
The Alzheimer’s Society is a valuable source of help and advice about dementia of all types. 0845 300 0336 www.alzheimers.org.uk.
4. Buy an Impaired Life Annuity or an Immediate Annuity.
One of the few advantages of being ancient and unfit is that the returns from annuities are much higher as the insurers don’t expect you to last too long. You can delight in lasting a long time and really making them pay through the nose! Care costs may be fully or partly financed in this way of you have the capital. Few companies offer these plans and their rates vary dramatically. It is vital to speak to an IFA before signing up for one.
5. Keep your savings separate.
Local authorities no longer have the right to raid the savings of the husband or wife of someone who has to go into care and has asked for help paying the fees. However, to be sure of avoiding problems with joint accounts, older couples may be well advised to separate their savings and investments
6. Ask for regular reviews of the Nursing Element.
Many of those going into a home will be eligible for a Government payment to cover the nursing element of their care, known as the NHS nursing contribution. There are three levels – low £, moderate , and high. As time moves on the nursing care required may well grow. Be sure to ask for a review if you think it has. See the Department of Health guide to NHS funded care.
7. Draw Down Cash or Income from your Home.
An alternative may be equity release. This can provide you with a lump sum or a regular monthly income by signing away some or all the value of your home. See a specialist IFA. If you have already put your home in a The Family Bank to shelter it from probate fees and benefit future generations, this may be a little more complex, but possible.
Don’t wait until a family member or relative is beyond managing their own affairs before making Lasting Powers of Attorney. It can make the whole process vastly more complicated and expensive and you will end up with the Court of Protection looking over your shoulder. Or worse, a solicitor managing your affairs at your expense. Ideally, everyone over 18 should have a Lasting Power of Attorney.
While you are doing this you should also make sure that your Last Will and Testament is up to date and remains relevant.
9. So you want to avoid paying Care Fees?
Many people think it is not fair that the death tax on the wealthy is inheritance tax, which doesn’t apply to most people and is easily avoided if you take good advice. Community Care Tax (paying care fees) is a lot less easy to avoid and we believe that it is dangerous to go down this path. The authorities will be after you and your family if they have reason to think you have purposely set out to evade self-funding. The Family Bank is deliberately set up to allow your trustees to assist you in living comfortably, rather than throwing you entirely on the mercy of the local Council.
If it is too late for anything else, your best bet is to be sectioned under the Mental Health Act, whereupon the prime financial responsibility fall on the Health Service. Surprisingly enough, it is quite hard to get sectioned when you want to be!
10. Think about Inheritance Tax.
Legitimate IHT planning can fairly easily help you to pass over assets to family and friends without breaking the rules. This DIY IHT Manual could be a very sound investment.