Myths about long-term care
Misconceptions about care in later life can lead to inadequate planning. Here we’ve tried to dispel the more common myths.
Myth 1. It’ll never happen to me
The fact is we don’t know what future long-term care we’ll need. Currently it’s thought that around 60% of 65 year-olds will eventually need high levels of care.
Myth 2. I don’t need to worry as my family will take care of me
These days many families are spread out from each other, making it difficult to care for older relatives. It can be a full-time commitment to look after a family member, and over time it becomes harder to manage without professional care and additional financial assistance.
Myth 3. My health insurance will cover my care costs
Health insurance rarely covers ongoing care of chronic illness. Most plans only cover short-term medical care as you recover from an acute illness or injury.
Myth 4. I have considerable savings that will pay for my care
You might, but care costs can be high and you’ll need to have saved a lot of money to cover those expenses. Without careful planning, those savings can disappear quickly.
Myth 5. My partner needs care, so all our income will have to pay for his/her care, leaving me with nothing to live on
The means-test only looks at the income and capital of the partner requiring care. The test also takes into account 50% of their pension and your family home will not be included in the means-test if your partner needs the care and someone else will still be living there (this could be you, a dependant under 16, a disabled or elderly relative, or in some cases a carer). To protect your assets, split your joint account into separate accounts.
Myth 6. I’ll have to sell my property to pay for my care
Not necessarily. Check with your local authority. They may include you in something called a deferred payment scheme. This means they will lend you the money to pay for your care and then charge the cost against the value of your property when it’s eventually sold.
To read about other alternatives, visit www.youandyourmoney.info You can also download a fact sheet about the treatment of property in means-testing from Age Concern’s website.
Myth 7. I may as well give my home away to avoid the cost of care
This is called ‘deliberate deprivation’ and it’s not a good idea. There are many risks involved and it will not guarantee that your home will be disregarded from means-tests. If local authorities decide you transferred your home to someone else to avoid paying long-term care fees, they will include the value of your property in their assessments.
Above all, take specialist advice and look at all the options available for funding before deciding to transfer any assets.
Myth 8. If the state is paying, I don’t have a choice of a care home
On the contrary – you do have a choice. The local authority must give you a list of local homes where they can fund your placement. When you choose a home it must meet your assessed needs, comply with the authority’s terms and conditions and must not cost more than they would usually pay for someone with your care profile.
Myth 9. Social services won’t pay for any of my care fees while I’m in the process of selling my former home
If your asset capital is below £23,250 (2016/2017), the local authority will contribute to the cost of the first 12 weeks if your care. After that, the local authority will recoup the costs of financial assistance from the proceeds when your home is eventually sold.
Myth 10. I have to pay Council Tax on my empty property
Once you move into a care home and your house is left empty, you will get full exemption from Council Tax until your property is sold.
Myth 11. Once I’m in care, I won’t receive benefits any more
Benefits are often overlooked. If you pay for your care yourself, there’s a good chance you can claim Attendance Allowance. This is a non-means tested, non-taxable benefit, paid weekly. Believe it or not, around 65% of people who are entitled to the Attendance Allowance don’t claim it.
Make sure that you claim all of the tax and welfare benefits you are eligible for. For an up-to-date list of benefits, visit the Directgov website.
Abacus Associates have specialist long term care advisers who are accredited members of the Society of Later Life Advisers and are able to guide you in this matter. Please contact us for further assistance.