Money and legal matters 9 - Long term care
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Introduction
Free personal care
Choosing long stay care
Hospital discharge
Finding a place
Financial assessment
What happens to the house?
Deferred payment of care home fees
Liability of spouse or civil partner
Deprivation of assets
Benefits and hospital care
Benefits and care home residents
Responsibility for the person's money
Looking after the person's property
Summary
Over time it may become too difficult to look after the person at home. He or she may need to be cared for in a care home or hospital. More information about choosing and paying for long-stay care is given in the booklet A Positive Choice, see Further reading or read (or download) online from the link below:
A positive choice - choosing long-stay care for a person with dementia
If you feel that the person may need long term care, talk to the social work department. They will do an assessment and decide what kind of care he or she needs. They should do this even if the person is able to pay the full cost of any home fees. Unless the person has a very substantial income or savings and will be able to pay the full cost for the foreseeable future, he or she may need to get help with fees from the social work department, now or later on. NHS care is provided without charge.
From 1 April 2002 residential and nursing homes are now both known as care homes, and the Care Commission registers them all.
People over 65 in care homes who pay their own fees have received free personal care from 1 July 2002. People of any age who pay their own fees get free nursing care. The local authority will pay any contribution for personal or nursing care direct to the care home, not to the resident.
People needing personal care (including those currently in homes formerly registered as residential homes) receive £149 for personal care per week, and those in nursing homes get £216 per week, for personal plus nursing care.
People under 65 needing nursing care get £67 a week.
People paying part of their own fees may benefit, as their local authority ‘top up’ is raised to these amounts.
Residents continue to pay the rest of their fees, covering accommodation etc.
These arrangements only apply to Scotland.
Attendance Allowance/Disability Living Allowance
People over 65 who get the payment for free personal care are not eligible for Attendance Allowance after their first four weeks in the home.
People of any age who are paying all their own fees but get the payment for free nursing care (£67 per week) but not free personal care can still get Attendance Allowance (over 65s) or the care component of Disability Living Allowance (under 65s).
The mobility component of Disability Living Allowance is not affected.
The definition of personal care is in chapter eight.
The decision about long-term care can be a very hard one for carers. The carer and other people involved, such as doctors, nurses and voluntary organisation staff, should be fully involved in the discussion with social workers. Try to involve the person with dementia too; he or she will be more likely to settle having helped make the decision.
Hospital discharge
If the person is to be discharged from hospital and you feel he or she should not be discharged, you can appeal. The hospital must tell you how to do this. You must appeal within 10 working days of when the person was told of the decision.
The social work department is legally obliged to provide aftercare services to people with dementia leaving hospital. One month’s care in the person’s own home is free.
Social work department
If they have assessed the person as needing a place in a care home, the social work department will usually offer a place in a suitable local authority or private home, or provide information about local homes. The freephone Dementia Helpline (0808 808 3000) has access to a database of care homes and can provide a list of homes which provide specialist care for people with dementia in any area of the UK.
If the person has no-one willing and able to make arrangements for him or her, the social work department has the responsibility of making arrangements for the person’s care, even if he or she has enough money to pay the fees.
The home chosen does not have to be in the social work department’s area. For example, it may be more appropriate for the person to move nearer to family and friends. If the person (or his or her welfare attorney or guardian) would prefer a different home from one offered by the social work department, the social work department must arrange for him or her to go there instead, as long as:
- there is a place available
- the accommodation is suitable for the person’s assessed needs
- it costs no more than they would usually expect to pay for someone with the assessed needs
- the home is willing to agree to the local authority’s usual terms and conditions.
If the person’s carer or relative would prefer a different home, the social work department should take account of this view and must act in the person’s best interest.
If the alternative home is more expensive, the social work department will only place the person there if someone else undertakes to pay the extra. If you agree to do this and later on become unable to pay, the person may have to move. Discuss with the social work department what will happen if the fees increase.
The person will usually be asked to sign a contract or agreement for the home, but if he or she is not able to understand it, he or she should not sign. You can officially sign on the person’s behalf if you have a financial power of attorney or if you are the person’s guardian or intervener with the appropriate powers. If there is no-one able to sign on the person’s behalf, see What to do if you need more powers, for information about guardianship or intervention orders. If in doubt seek legal advice. The person should not be denied a service because no-one signs the contract.
Private arrangements
Ask the social work department to help you with suggestions for a suitable home, or call the Dementia Helpline (0808 808 3000) for a list from their database. You can get inspection reports for homes you are interested in from the Care Commission (for additional contact details see Further help).
Visit several homes before you make a choice, and ask for a trial stay. Ask to pay weekly rather than monthly for the trial period. If the home asks you to sign personally to guarantee the person’s fees, in case he or she does not pay, take legal advice to make sure you understand the possible consequences before you sign. You should take into account the likely increase in fees over time.
If you want to claim free personal care for the person, he or she must be assessed by the social work department.
If the social work department arranged the person’s place in the home, they are legally responsible for paying the home fees. But they will assess the person’s income and savings to see how much he or she can afford to pay. They must assess on the basis of his or her own resources, not jointly with a partner.
If the person has more than £21,500 in capital (£20,000 from 10 April 2006), he or she will have to pay the full fees until the savings come down to this level. If the person has between £13,000 and £21,500, he or she will be assessed as having an extra £1 a week income for each £250 over £13,000, rather than any actual interest he or she receives on the money. If there is a joint bank account, half the balance will normally be counted.
The social work department will allow a weekly personal expenses allowance of £21.15 before they work out how much the person must pay. If the person does not have enough left to pay the fees, the social work department will pay the extra.
The social work department have the discretion to increase the amount of the personal allowance if necessary. For example, if the person’s wife, husband or partner would be left without enough money to live on, they may agree to increase the personal allowance. This would allow the person to maintain his or her spouse or partner. If the social work department refuses to do this, seek advice (see Further help). If the person going into care has an occupational pension, his or her partner is entitled to keep half of it.
There is no right to appeal a financial assessment but you can make a complaint to the social work department. In some cases the person may be able to make a legal challenge. Seek advice.
If the person refuses to pay
If the person refuses to pay his or her contribution to the home fees, the local authority cannot force him or her to do so. But they can place a kind of mortgage called a ‘charging order’ on the house if he or she has one and it is not disregarded (see What happens to the house? below). The local authority would then get their money back when it is eventually sold.
Alternatively, the local authority could take the person to court to recover the debt, or apply to the court for an intervention order or the appointment of a guardian (see chapter six). Take legal advice if this happens. They may leave the debt until the person dies and then recover it from his or her estate.
If the person owns a house and lived alone, the value of the house will be counted as part of his or her savings or capital, less any mortgage and 10% of the value to cover the cost of selling it. If the person owns a part share this should be counted at the market value if sold on its own, not as a share of the value of the whole house. The only realistic market for a part share in a house may be the other joint owner or owners. If they are unwilling or unable to buy the other share the value could be low or even nil. For example, if a person jointly owns a house with someone else then they are regarded as owning half the house. The assessment should be based on how much might be raised by putting half of a house on the market – it should not be based on the value of the house divided by two.
The value of the house will not be taken into account for the first three months after someone moves permanently into a home, provided you apply in writing to the council.
The value of the house will be disregarded if the person’s spouse or same-sex or opposite-sex partner, or a relative who is 60 or over or incapacitated, or child under 16 he or she is liable to maintain lives there. The local authority can also disregard the value of the house if someone else lives there - for example, a carer who has given up his or her own home, or someone aged over 60 who is not a relative.
The local authority cannot force the person to sell the house. But they can put a charge (like a mortgage) on the house so that when it is eventually sold they can claim back the money the person owes them for the fees.
If the home needs to be sold (perhaps because it is lying empty) but there is no financial power of attorney or financial guardian or intervener, no one has the power to sell it. In this case, if no one else is applying, the local authority has a duty to apply to court for an intervention order or financial guardian. If they do not do this, seek legal advice.
If the person was a tenant, the rights of someone else who lives in the house depend on how closely he or she is related to the person, how long he or she lived in the home and whether it is rented from a public or private landlord. You should get advice if you want to carry on living in the home and the landlord is not willing to let you do so.
Deferred payment of care home fees
Deferred payment agreements (DPAs) were introduced in July 2002 under the Community Care and Health (Scotland) Act 2002. They allow people to avoid selling their homes up-front to meet their care home fees by entering into a legal agreement to have part of their fees paid by the local authority and the balance settled from their estate when they die or choose to sell. A DPA is a legal agreement between the local authority and the individual which defines the portion of a person’s care home fees to be deferred and provides for the grant to the local authority of a standard security over the home to cover the deferred amount.
Eligibility for a DPA is restricted to any person who:
- has been assessed as needing a care home place
- has capital at or below the lower capital limit of £13,000 when his or her resources are assessed, excluding the home from that assessment
- would not normally have his or her home disregarded from such a financial assessment (see section above)
- does not wish to sell his or her home or is unable to sell it quickly enough to pay for care home fees
- can grant the local authority a standard security against his or her home.
It is likely that a person with dementia who is assessed as needing a care home place will lack the capacity to enter such an agreement but it could be a suitable option where there is someone such as an attorney or a guardian who is authorised to enter the agreement on the person’s behalf.
The Scottish Executive expects all local authorities to operate deferred payment schemes and to routinely inform eligible residents of their option to enter into a DPA.
Liability of spouse or civil partner
An individual’s contribution towards the care home fees paid for them by the local authority is normally calculated solely on the basis of his or her own resources.
However, sections 42 and 43 of the National Assistance Act 1948 originally stated that a man is liable to maintain his wife and children. This same duty applied equally to a woman who was liable to support her husband and children.
This “liable relative rule” allowed local authorities to demand a contribution from the spouse (or civil partner) or parent of care home residents.
The Adult Support and Protection (Scotland) Act 2007 repealed these provisions in the 1948 Act. This part of the new Act came into force on 5 October 2007 and local authorities who were applying the liable relative’s rule were instructed by the Deputy Director of Community Care to cease any such arrangements by that date.
Even under the old legislation, local authorities did not have the right to make spouses or partners give details about their own finances although most authorities used financial assessment forms that asked for information about both parties. Some social workers may insist that partners are obliged to give that information. They are not obliged to do so and finance departments should disregard any of that information. The financial assessment should only be made of the assets of the person with dementia.
If the person with dementia gives away money or property before going into care (for example, signs the house over to someone else), the local authority can treat him or her as if he or she still has it when they do their financial assessment. But they can only do this if they can reasonably consider that avoiding the fees was part of the reason for giving away the property. However, many local authorities say that all older people ought to be considering that they might need long term care in the future. These local authorities will count any money given away as part of a person's assets, unless there is another strong reason for giving it away (for example to avoid inheritance tax).
If the money or property was given away less than six months before the person went into the home, the local authority has the power to claim back its value from the person it was given to. If it was given away more than six months ago, the local authority can still count the amount as part of the person’s capital in their assessment. This means that they may not help to pay home fees, even though the person themselves no longer has the money.
People can also be treated as still having money or property they no longer possess if they gave it away to get Income Support.
Before proceeding with any transfer of assets such as your home, you should seek legal and financial advice. Specific concerns might include:
- what will happen if at some point in the future you want to move from your present home to one more suitable for your needs?
- if you no longer own your home you will not be able to raise any income or capital against the equity in it
- if the new owner marries, divorces or uses the property as security for a loan, your position may be affected.
Some benefits are suspended or reduced after the person has been receiving free in-patient treatment in hospital for a certain length of time. Spells in hospital with 28 days or less between them are always counted as one spell when working out the date benefits should reduce. For most benefit purposes, the day of admission does not count as a day in hospital, but the day of discharge does. However, for Attendance Allowance (AA) and Disability Living Allowance (DLA) only, neither counts as a day in hospital.
It is very important to notify the Department for Work and Pensions (DWP) when someone goes into hospital. Otherwise, benefits will continue being paid when they would have been reduced or stopped. The DWP will try to recover such overpayments, and this can add to an already stressful situation. Even when a benefit has been overpaid, it may not be recoverable by law. Seek advice to find out whether you could appeal.
Ideally, notify the DWP in writing. If you do it by telephone, note the time, date and name of the member of staff you speak to and which section he or she works in. If the person gets more than one benefit, you should notify separately the office responsible for each benefit.
Changes to benefit reductions for people in hospital
In the 2005 Budget, the Chancellor announced changes to the rules about benefit reductions for people in hospital.
Under the existing rules, certain benefits including Retirement Pension, Incapacity Benefit, Income Support, Pension Credit, and Jobseeker’s Allowance are normally downrated to a flat rate of £16.40 once someone has been an inpatient for more than 52 weeks. After April 2006, no one will have these benefits downrated after 52 weeks.
This means that anyone admitted to hospital from April 2005, and who had not been in hospital in the 28 days before being admitted, will not have their benefits downrated to the flat rate after 52 weeks. For other people, the existing rules continue to apply until April 2006.
Attendance Allowance and Disability Living Allowance continue to be suspended after 28 days in hospital as does Carer’s Allowance since AA and DLA are qualifying benefits for Carer’s Allowance.
Attendance Allowance and Disability Living Allowance
AA and DLA stop after a person has been in hospital for 28 days, unless he or she is a private patient. If the person goes into hospital for regular respite care this may also affect AA and DLA.
If a person first becomes entitled to AA or DLA while they are hospital inpatient, they cannot be paid until they are discharged. However, it is a good idea to submit a claim while in hospital so that they can receive benefit as soon as possible after leaving hospital.
Carer’s Allowance
Carer’s Allowance is withdrawn after four weeks if the person being cared for is admitted to hospital. This is because AA and DLA, which are both qualifying benefits for Carer’s Allowance, are withdrawn after four weeks in hospital. If the carer is admitted to hospital, Carer’s Allowance can continue to be paid for up to 12 weeks, provided there were no breaks in caring in the preceding 26 weeks.
Income Support and Pension Credit
If the person went into hospital before April 2005, Income Support and Pension Credit will normally reduce after 52 weeks. If they were admitted after April 2005, there is no reduction. However if the person has a severe disability premium ( or severe disability addition in Pension Credit), this stops after four weeks (like AA and DLA).
The amount of benefit the person will receive after 52 weeks depends on individual circumstances including, for example, whether he or she has a partner or dependants. In the case of a couple, each person will be assessed separately for Income Support or Pension Credit, depending on their age, after either of them has been in hospital for more than 52 weeks.
Housing Benefit
If the person is in hospital, Housing Benefit may be paid for up to 52 weeks since it may take a while to decide on the best plan for the future care of the person.
What happens if benefit stops?
If benefit stops as a result of the person being in hospital, generally a new claim will be necessary. However, AA and DLA are only suspended while the person is in hospital and can be reinstated when he or she is discharged.
If you have to make a fresh claim, it is important to do it as soon as possible because strict rules limit backdating.
If the person gets Income Support or Pension Credit and this stops because he or she is in hospital, any Housing or Council Tax Benefit paid because the person is on Income Support will also stop. Make a fresh claim to the Housing/Council Tax department immediately. Many people fail to do this and build up unnecessary rent or council tax arrears.
Benefits and care home residents
A person under 60 entering a care home will continue to receive Income Support if he or she has capital or savings of less than £16,000.
There is no upper capital limit for Pension Credit but capital realised from the sale of property will still affect any Pension Credit payable in care and could prevent it being paid at all. This would include, for example, the value of or the proceeds from the sale of the person’s former home. For people who are 60 or claiming Pension Credit, there is no upper capital limit.
Couples are treated separately for Income Support or Pension Credit if one or both enter a care home.
For people who are in receipt of the savings credit of Pension Credit (see page State Pension Credit, chapter seven), the local authority must disregard the first £5.45 (£8.15 for a couple) of the savings credit, when carrying out the financial assessment.
When a person goes into a care home, AA and DLA care component normally stop after 28 days, unless the person is paying his or her own full fees. DLA mobility component is not affected.
If a person goes permanently into a care home, he or she is not usually eligible for Housing Benefit although it may be paid for up to four weeks to cover the period of notice required to give up a tenancy. You will need to inform the housing department if the person is giving up a tenancy when he or she goes into long-term care.
Personal allowance for care needs
Each resident should have a weekly personal allowance of £21.15. This is for the resident’s personal use for extras. It must not be used to top up fees. It should not be ‘pooled’ between residents. Carers or relatives may be consulted about how the money is to be used if the resident is incapable of deciding, but they do not have any power to decide its use, unless they have continuing power of attorney or guardianship with financial powers.
Responsibility for the person’s money
Hospital
If the person goes into long term hospital care, the hospital may manage his or her finances if he or she is incapable of doing so and there is nobody else to do it (eg someone with continuing power of attorney or a guardian with financial powers). The NHS Board where the hospital is located is responsible for inspecting and monitoring hospitals which are managing patients’ financial affairs. Written permission to manage assets over £10,000 must be obtained from the NHS Board. It may be necessary for a financial guardian to be appointed.
The hospital should use the money for the patient’s benefit. For example, it may be spent on rent and other bills for the patient’s home or for trips out or hairdressing, clothes, personal toiletries, extra comforts, etc. If you feel the person would appreciate extras and can afford them, talk to the charge nurse.
Care homes
Under the Adults with Incapacity Act care homes can look after residents’ funds up to (normally) £10,000 per year, where there is not an attorney or guardian to do this. See Management of finances in a care home.
Looking after the person’s property
If no one else is taking suitable steps then the local authority must safeguard the house and personal possessions of someone in hospital or local authority residential accommodation or under guardianship (see chapter six).
The house may have to be secured, essential repairs carried out or furniture put into store. The local authority can recover reasonable expenses from the person.
If the property is likely to be unoccupied for more than 30 days in a row, someone should inform any insurance company which insures the property (buildings and/or contents). Failure to do so could lead to any claim being refused.
If you feel that the person may need long term care, talk to the social work department about an assessment of his or her care needs.
The freephone Dementia Helpline (0808 808 3000) has a database of care homes.
The home you choose does not have to be in the social work department’s area.
You can get inspection reports for homes you are interested in.
The social work department will assess the person’s income and savings to see how much he or she can afford to pay.
The local authority can ask a spouse or partner to contribute towards the person’s care, but they do not have the power to financially assess the spouse or partner.
People over 65 in care homes who pay their own fees will get free personal care. People of any age who pay their own fees will get free nursing care.
If the person with dementia gives away money or property before going into care in order to pay less towards care home fees, the local authority can treat him or her as if he or she still has it when they assess how much he or she should pay.
Many benefits are reduced when someone has been receiving free in-patient treatment in hospital for a period.
The care home or hospital can manage the person’s finances if he or she is not able to do so and there is nobody else to do it.
Care homes may look after residents’ funds up to a specified amount, where there is no attorney or guardian to do so.
Dementia - Money and Legal Matters: index page
Useful links related to this chapter:
A positive choice - choosing long-stay care for a person with dementia
Scottish Commission for the Regulation of Care
Freephone 0808 808 3000