There is a lot of confusion and frustration around care costs. This can often lead to misinformed decisions being made and people missing out on important support and benefits. To that end, Thorntons Wealth has put together a short list of the main misconceptions about care costs to try and shed light and “debunk” some myths.
“I won’t qualify for local authority support so there is no point in contacting them” – local authority support doesn’t stop at paying towards care for those with lower levels of wealth. In fact, there are a number of non-means tested benefits that relate directly to the health of an individual. The local authority may pay a personal care allowance or nursing care allowance for those who need care, regardless of their wealth. For those who reside at home, it may be possible to receive attendance allowance or adult disability payment. As such, it is always important to engage with the local authority.
“Only self-funders pay towards their care” – whilst self-funding residents can certainly pay more for care, it is not true to say that those who receive support from the local authority don’t pay anything. The standard rate that the local authority pay towards care is reviewed annually and is held at a set rate regardless of how much a care home charges. The result is that even with the local authority’s support, there is often still a shortfall that needs to be plugged. Some care providers may agree to provide care at the lower rate, however this can put real strain on the business. Often, it may be that state-supported funders may still rely on support from family to pay towards care.
“I can gift my property into trust to avoid paying for care” – Gifting into trust is becoming more common, although it is not the silver bullet people are led to believe. When local authorities consider deliberate deprivation of assets regarding gifting, they consider a number of factors such as:
Timing – When was the asset gifted?
Rationale – Why was it gifted?
Health – Was it reasonable to assume the grantor was likely to need care in the future?
Many have been caught out on the promise that a trust will avoid paying for care costs and as a result, have had to incur costs to unpick their previous arrangements or reduce their expectations for care.