PressDisplay.com - The Daily Telegraph -3 Feb 2009 -Pensioners not told of assets
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3 Feb 2009
The Daily Telegraph
Pensioners not told of assets loophole
Thousands of pensioners are being forced to sell their homes unnecessarily
in order to pay for care-home fees, according to figures released by the
Conservative Party this week.
It claims that local councils are failing to follow guidelines that state
pensioners can retain their family home if another elderly friend or relative
is living
there.
The complex rules surrounding how much individuals have to pay towards costs
are often not explained to families faced with finding care for relatives.
As a result, many individuals may be ill-informed and unaware of their entitlements.
The law states that if an elderly person holds more than £22,250 in capital,
they are expected to pay the full cost of care. This includes the value of
any relevant property, plus savings and investments. There are certain circumstances,
however, when the value of a property is disregarded. The Conservatives’ report
states that more than half of all councils are failing to publicise these exemptions.
If the care-home entrant has a spouse, a relative aged over 60, or younger
than 16, or a relative on incapacity benefit living with them, their property
is automatically exempted from the means test. The shadow health minister,
Stephen O’Brien, said the statistics, obtained through freedom of information
requests to 150 councils across England, show pensioners face a “postcode
lottery” when they need to move into a care home.
There are alternatives that can help protect a person’s capital from
being exhausted by care fees. Some people try to place assets in trusts for
relatives, but this needs to be arranged at an early stage, well before the
need for care arises in order to avoid being accused of “deliberate deprivation”.
If the local authority believes assets have been given away, specifically to
avoid paying care costs, they retain the legal right to challenge these disposals,
and potentially grab these funds.
Age Concern warns: “Where a disposal of assets is treated as deliberate
deprivation, the local authority will include ‘notional capital’ to
the value of those assets in its assessment of your means.”
Those looking to protect their assets should consider splitting joint accounts.
In this way, only the care-home entrant’s savings would be eroded and
the council would help with fees once their assets fell below £22,500.
Certain investments are also excluded from the local authority’s means
test. This includes investment bonds which contain an element of life insurance.
However, investors have to prove there are genuine financial reasons for taking
out such a bond, otherwise a sudden switch from Isas into investment bonds
could also be counted as a deliberate deprivation.
Janet Davies, of Symponia, the care-fees planning specialist, says: “The
best way to ensure the funding of private care fees is being done in the most
appropriate way is for the person and their family to seek specialist financial
advice at the earliest opportunity.” She adds that while a universal
panacea doesn’t exist, an experienced adviser should be able to suggest
an variety of options.
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03/02/2009
