An uncertain future for social care funding
For people in care homes, the proposals could be seen in a positive light. An increase in the threshold for self-funding care fees from £23,250 to £100,000 will allow people to retain more of their hard earned wealth. This level of assets is covered by the existing Nil Rate Band, meaning that an additional £76,750 could be passed on to children free from inheritance tax.
The biggest change however will be for people receiving domiciliary care. Under current legislation, a property is not taken into consideration when assessing assets for anyone receiving care in their own home. An individual would therefore only need to pay if their savings are above £23,250. However, under the new proposals, the assessment would be the same as those receiving residential care (which would include the value of the home, less any mortgage/debts against it). Whilst the proposals include an option to extend the ability for an individual to retain their home during their lifetime, with the amount due to be paid on their death, it would still have a significant impact for the high percentage of the population that chooses to stay in their own home. This will obviously have an impact on the elderly, but the strain is likely to be felt even more by those that have life-long conditions.
Care charges are defined under The Care Act which came into force in 2015 and the supporting regulations. If the Conservatives were to get into power they would need to consider amendments to the regulations in order to implement the proposed social care changes. If this were to be the case, much of our existing advice on legitimate asset protection will remain valid (under the regulations the deliberate deprivation of assets rules, i.e. deliberate gifting of assets to avoid care, are already very strong). It does however bring the question of whether this will lead to any further changes to the way care is funded – only time will tell.
For more information please contact; Glen Miles, Partner, Vulnerable People.
Published: 19 May 2017