Residential Care Risk

This report is going to look at the potential risks to an estate due to the cost of residential care and will look at the actions one can take to minimise the risks and preserve as much of their estate as possible for their beneficiaries.

I am going to outline the background, look at the risks, consider the options and present my conclusion.

Background

In a recent article in the Telegraph, it was considered that reaching the age of 74 was the entry of old age and at this age you could expect to live another 15 years. The definition of old age and its entry point seems to be important for policy makers using a basic assumption that your health will deteriorate over time and lack of dependence, which in turn, can cause a greater reliance upon

(2015). Paying for permanent residential care Factsheet 10 that everyone must contribute towards a daily living cost charge which from April 2016 will be set at £230 per week however, an individual must be left with a personal expenses allowance each week, this is currently £24.90 and is normally excluded when assessing an individual’s income under the capital and income calculation (Which 2015). Please note, the contribution relating to the daily living cost is excluded from the proposed lifetime contribution cap and whilst I do not have specific income details for George and Connie, if either of you have to go into residential care home the daily living cost will have to be factored in their current expenditure. Therefore, the first risk is from an income point of view and how can you maintain the property and ensure both George and Connie have sufficient income for their day to day needs.

The financial assessment which is in place to establish who will pay for care can have some discretion from the local authority under the Light-touch financial assessments but in normal circumstances the financial assessment will be structured as follows.

Discuss with

Assessment of Capital – in George and Connie’s situation this will be looking at their savings and other assets which in this case relates to their main residence which is currently valued at £450,000. However, there are exemptions which apply to jointly owned property i.e. the property is not taken into consideration if the partner who is not going into a permanent residential care continues to live in the house (Age UK 2015 factsheet 39).

George and Connie need to be aware that there income positon will change and will need be reviewed due to the fact an element of their income will have to go towards the cost of the residential home. In relation to the capital assessment, if only one of them goes into a residential care home and the other remains in the house then the property is ignored and therefore, with £10,000 of savings would mean under the current thresholds.

• Capital and Savings below £23,250 will mean the local authority will contribute towards the cost of care. Please note, the financial assessment is based on an individual’s assets.

Dilnot’s report recommended the threshold to determine support or not should be increased from £23,250 to £100,000. This recommendation has been accepted but increased to £118,000 but with a delayed implementation date of April 2020 (Age UK 2015. Care cap and means test