Yesterday, the Sunday Times reported that Local Authorities have placed thousands of legal charges on homes owned by the elderly who are now in care.
If an older person needed care and where there is a spouse still living in the home, the home cannot, at that point, be sold to pay for the Care Fees. However, the Local Authority now has the ability to place a charge against the home for the cost of the Care Fees, which will be paid to the Local Authority upon the deaths of the owners.
This scheme is known as a “Deferred Payment Agreement” (DPA) and older people may surrender their home to a Council to eventually cover the cost of care where they do not have savings to fund this.
Initial figures published by NHS Digital show that 55 councils currently have 2,895 DPAs’. The total value of the agreements disclosed was £72.4 million, but the actual figure will realistically be higher as only one third of Local Authorities responded.
Although there were discussions about capping Care Fees at £72,000 for every person above State Pension age, such proposals have now been postponed until 2020. This means that even more of our older generation will be forced to use their home to pay their bills.
The report also states, that whilst losing their homes, older people entering into a DPA are likely to be penalised further by having to pay elevated rates of up to £200 per week more for their care. AGE UK is reported to have called this additional money “Back Door Tax” which is ultimately used to subsidise those who cannot pay, or do not own their own home.
A recent report by the Family and Childcare Trust discovered that in some areas of the UK, self-funders would use up the value of their home in less than four years.
It is not however, all bad news.
Talk to LCS Legal now on 0345 017 8250 to discuss what options, including Asset Protection Trusts, we have to help you and your family.