The prospect of needing or requiring Long Term Care can be a daunting one, both for the individual and his or her family.

Understanding how to deal with Social Services assessment procedures and what they mean, knowing what benefits to claim and how, and finding the right residential or nursing home for your needs can be problematic.

It is then essential to ensure that all the legal and financial options have been examined before making any decisions which will affect your emotional, physical and financial well being when entering care, as well as that of your loved ones.

Legislation under section 47 of the NHS Community Care Act states that any person in need of care must be assessed by their local Social Services to determine the type of care best suited to their needs. This may be Domiciliary Care, where services are provided to individuals in their own homes, or Residential or Nursing Care in specialist homes.

Having confirmed that care is required, an additional financial assessment, or means test, will be carried out by Social Services to determine the individual’s ability to pay the ongoing cost of that care. During this assessment you will be expected to disclose full details of your assets. These will include all property currently or previously owned, to determine whether you or Social Services should pay for your care.

Means Testing

Broadly speaking, Local Government meets a proportion of the cost of care for you if you have assets of less than the following amounts:-

UPPER MEANS TEST LIMITS

England - £23,000
N. Ireland - £23,000
Wales - £22,000
Scotland - £22,500

If you have in excess of the Upper means test limit, including your home (there are certain exceptions to this), then you will be responsible for all your long term care costs.

LOWER MEANS TEST LIMITS

England - £14,000
N. Ireland - £14,000
Wales - £20,750
Scotland - £13,750

If you have below the Lower means test limit, including your home (there are certain exceptions to this), then you will generally be funded by the state for your long term care costs.

So in summary, if you have been prudent and managed to save for your later years, or own your home, it is likely that you will be liable for the majority of your long term care costs.

Deprivation of Assets

It is important to understand that Local Authorities have the right of investigation to confirm that your home or assets have not been gifted to avoid liability for your care costs (known as Deprivation of Assets). If it is believed that this has taken place they have far reaching powers to recover the value of any assets disposed of in this way, including the right to demand their return (if within 6 months of their disposal) or treat them as notional capital.

As a result it is likely that many people will need to sell their homes to enable them to pay for their long term care. Many of these elderly people had planned to pass on their assets to children and grandchildren, but in many cases the majority of those assets have been used to pay care fees.

Care Home Market

The total value of the care home market for elderly and physically disabled people at April 2003 was estimated at £10.2 billion, of which private sector operators accounted for £6.9 billion. At April 2003, there were an estimated 501,900 places in residential settings for long stay care of elderly and physically disabled people across all sectors (private, public and voluntary) in the UK.

The latest Laing & Buisson fee survey in March 2003 found average weekly fees of £455 for private nursing care for elderly people and £329 for private residential care in the UK.

Average fee inflation is estimated at 8% for both private nursing and residential care for older people between 2001/2002 and 2002/03.

Looking forward, similar levels of fee inflation are likely in 2003/04 as supply becomes tighter and as more local authorities have been forced to raise baseline fee rates. Thirty per cent of local authorities supplying figures for Laing & Buisson's most recent (July 2003) baseline fee survey increased some or all rates by at least 10 per cent in the negotiating round for financial year 2003/04. A further 30% of local authorities increased some or all residential fees by 5% and above. However, 18% of local authorities implemented increases at or below 3% for some residential care rates - barely sufficient to cover wage increases.

Market Size

The following table provides details of the number of homes for all client types. This includes elderly, physically disabled, elderly mentally ill, learning disabled and alcohol and drug dependency clients.

The result is that those homes with a large proportion of socially funded residents cannot survive, and subsequently close. This causes heartache to residents who are forced to move to a home not of their choice, sometimes far from friends and family.

For further information please click on the following links:

• Legislation
• Wills and Other Legal Instruments
• How Can I Act on Behalf of my Parents?
• Severance of Tenancy
• Can My Parents Give Away Assets to Avoid Care Fees? (Gifting Assets?
• Planning for Your Long Term Care Fees