× Search rightsnet
Search options

Where

Benefit

Jurisdiction

Jurisdiction

From

to

Forum Home  →  Discussion  →  Other areas of social welfare law  →  Thread

Care costs Financial Assessment

Charles
forum member

Accountant, Haffner Hoff Ltd, Manchester

Send message

Total Posts: 1411

Joined: 27 February 2019

I’m helping a client whose parents are probably both moving to a care facility in the near future. I’ve got a couple of queries:

1. The client is single and lives in his parents’ home. He is 58 years old, so the house is likely to be included in the parents’ capital. Can we defer payment for now, and request a fresh financial assessment once he turns 60? Or is it too late once a financial assessment has been carried out?
The LA’s guidance states that a customer can request a review of the financial assessment “if they feel it has not been calculated correctly, they feel something has been excluded/included incorrectly or feel that they cannot afford the amount of the contribution”. Would that include a change like this?

2. What are the chances of getting the Council to use their discretion to ignore the property already now, considering his age (just a couple of years under 60), and the fact he would likely become homeless if the house was not disregarded?

Paul_Treloar_AgeUK
forum member

Information and advice resources - Age UK

Send message

Total Posts: 3196

Joined: 7 January 2016

Not quite following what’s happened here Charles.

We cover these issues in our factsheet Property and paying for residential care

If they’re thinking of approaching the local authority for assistance with care home places, they first need to seek a needs assessment - this is to ensure that the LA agree that residential care is the best way to meet their needs. They can then be subject to a financial assessment, at which point the property becomes a live issue.

If none of the mandatory disregards apply (as per section 5.1), then they can request discretionary disregard (section 5.3). If none of these apply and the value of the property is taken fully into account, then presuming the value exceeds the threshold for LA funding (£23,250), there will be no financial contribution from the LA and they’ll need to pay the care home fees themselves. Don’t forget in that context the mandatory 12-week property disregard (section 5.4) which should be applied whatever happens.

If two years down the line, the mandatory disregard could be applied because the son reaches 60, I can’t see why you couldn’t just go through the process above again and now a mandatory disregard would apply.

Deferred Payment Agreements are covered in section 9. This might be an option as a bridging loan kind of arrangement in the period between now and him reaching 60 but they’ll run up against a similar problem to the above - how will the DPA be repaid if they seek to apply the mandatory property disregard when he reaches 60? I doubt very much that the LA would agree to the charge remaining on the property until the son moves or dies himself. And DPA’s also attract interest and administration fees so the overall amount owed will be more than simply the care home fees.

Does that help?

Charles
forum member

Accountant, Haffner Hoff Ltd, Manchester

Send message

Total Posts: 1411

Joined: 27 February 2019

Thanks, that is very helpful - I was hoping you’d see this post!

Yes, they are intending to ask the LA for assistance with the costs. It seems a medical professional has told them that they should not have any difficulty with the needs assessment resulting in the LA agreeing they would need to move to a care home. We were therefore now considering the implications of the property for the financial assessment.

Do you know how easy councils are with using the discretionary disregard?

About the DPA, the thinking was to defer payment until the death of his parents, at which point the house would be sold to pay off the debt with enough left over to buy him a small flat. However this would only work if they could request another financial assessment in two years time. Do you think the council would agree to that?

Paul_Treloar_AgeUK
forum member

Information and advice resources - Age UK

Send message

Total Posts: 3196

Joined: 7 January 2016

Our social care specialist says there are examples of LA’s using discretion and he says that there have been Ombudsman decisions on whether LA’s have dealt with requests appropriately. Anything that suggests a blanket approach of computer says no would obviously be dodgy, so definitely worth a punt.

If what I think you’re suggesting is as follows, then I think there may be an option to pursue.

* LA happy they need residential care through needs assessment and via financial assessment, do not apply any property disregard, meaning value of property potentially taken fully into account.
* Clients negotiate DPA with local authority in usual manner.
* When son reaches 60 years, then see the Care and Support Statutory Guidance (my emphasis):

9.18 There are also circumstances where a local authority may refuse to defer or loan any more charges for a person who has an active deferred payment agreement. Local authorities cannot demand repayment in these circumstances, and repayment is still subject to the usual terms of termination, as set out in the section entitled ‘termination of the agreement’ below.

9.20 Circumstances in which a local authority may refuse to defer or loan any more charges include:

d) if, under the charging regulations (see also chapter 8), the property becomes disregarded for any reason and the person consequently qualifies for local authority support in paying for their care, including but not limited to:

(ii) where a relative who was living in the property at the time of the agreement subsequently becomes a dependent relative (as defined in charging regulations). The local authority may cease further deferrals at this point

9.99 A deferred payment agreement can be terminated in 3 ways:

a) at any time by the individual, or someone acting on their behalf, by repaying the full amount due (this can happen during a person’s lifetime or when the agreement is terminated through the deferred payment agreement holder’s death)
b) when the property (or form of security) is sold and the authority is repaid [see note 6]
c) when the person dies and the amount is repaid to the local authority from their estate

This is the kind of thing that it’s worthwhile being completely upfront with the LA as to this process, as we’ve seen some come up with some very novel interpretations. We’d usually suggest seeking some independent financial advice if looking at taking out a DPA here as the sums of money can be large but I know this isn’t always possible.

Paul_Treloar_AgeUK
forum member

Information and advice resources - Age UK

Send message

Total Posts: 3196

Joined: 7 January 2016

Charles
forum member

Accountant, Haffner Hoff Ltd, Manchester

Send message

Total Posts: 1411

Joined: 27 February 2019

Excellent. 9.20(d)(ii) is precisely my case, so that seems clear then. Thank you very much!

Paul_Treloar_AgeUK
forum member

Information and advice resources - Age UK

Send message

Total Posts: 3196

Joined: 7 January 2016

No worries Charles, good luck with this one.