Can my home in England be sold to pay for long-term care?

If you or someone in your family requires long-term care, the question of how it will be paid for (and by whom) is likely to be something which you worry about.

There are many things which can affect the answer to this question, as it depends on individual circumstances. Here, we explain the main factors which will play a part.

Your ability to pay for care will be worked out through a Means Test, which is a financial assessment of the assets you have. Currently, if your capital is above £23,250 you are likely to have to pay your care fees in full. If your capital is under this figure, you might receive some assistance from the Local Authority but may still be required to make a contribution.

As an aside, the ‘Capital Threshold’ (the amount above which you will have to pay or part-pay your care fees) varies across the UK.

In Scotland, everyone receives free personal and nursing care up to a certain limit if they have been assessed as needing it. However, you will still have to contribute towards accommodation costs in a care home.

Scotland has upper and lower capital thresholds. If your capital is above the £32,750 upper limit, you will be expected to fund your care home fees; whereas if your capital is below the lower limit of £20,250 you will receive help to pay your care home fees. If your capital is between these figures, you will be assessed as though you have an extra £1 a week income for every £250 (or part of £250) between them.

Northern Ireland also has two capital thresholds, the lower threshold is £14,250 whilst the upper threshold is £23,250. In a similar way to Scotland, if your capital exceeds the higher threshold, you will be expected to pay your own fees, and if it is below the lower threshold your fees will be paid. If your capital is in between the two then your care will be part-funded on a sliding scale, with the funding decreasing depending on how close your capital is to the upper threshold.

Wales has a single threshold of £50,000.

Whether you need care at home (also called domiciliary care), residential or nursing care, the local authority will carry out a Means Test.

What is included in the Means Test?

When the Local Authority carry out the Means Test they take into account a number of things which are part of your capital and income, such as savings, property, investments, pensions and any benefits you are eligible for (even if you do not claim them). Not all benefits are included in the Means Test, including the mobility part of Disability Living Allowance and the Personal Independence Payment.  

Some assets are disregarded, including the capital value of life policies and annuities, compensation payments held by the courts, some trust capital, and some investment bonds (you should check this with your provider). Personal possessions such as art and jewellery are also disregarded, unless they were bought with the intention of avoiding paying for care.

The council can only take your own finances into account, and you are assumed to have an equal share in joint assets unless you can provide evidence that this is not the case. If your spouse has little income of their own and is reliant upon a share of your occupational or pension income (not your state pension) to meet their basic living expenses, you can pay up to half of this to them with the aim of protecting them from falling into financial hardship.

Does that mean that my home must be included in the Means Test?

Not necessarily. There are several circumstances in which you home is not included in the calculation. These include:

• If you are receiving care at home
• If you are receiving respite care - care in a care home on a short-term or temporary basis - and are intending to return to live in your own home.

If you are going into a care home permanently, your home will not be included if it is also occupied by one of the following:

• Your partner or former partner, unless they are estranged from you
• Your estranged/divorced partner, if they are also a lone parent
• A relative aged 60+
• A relative who is disabled
• A child of yours aged under 18

Even if none of these apply, the local authority can still choose not to include it in some circumstances. A possible example would be if a relative or friend gave up their home to move in and care for you. However, this is NOT guaranteed.

Regardless of their decision, the Local Authority must disregard your property for the first 12 weeks of your care to give you time to decide whether to sell it.

What if I don’t want to sell my home to pay for long-term care?

There are some other options for you to consider. You could rent out your home and use the income to pay for your care; or you could reach an agreement with the Local Authority to defer or delay paying for your care. This is known as a Deferred Payment Agreement (DPA), and means that the Local Authority provides financial support with your care costs, on the condition they will be repaid from your property in the future. This is a legal agreement, which usually involves the Local Authority placing a legal charge on your property with the Land Registry.

If you had planned to leave your home to your children or another beneficiary, it may be tempting to consider giving your property to them before or when you go into care. However, this could be seen as a deliberate attempt to avoid paying fees, known as a ‘deprivation of assets’.

When a local authority carries out a Means Test it will consider assets which you previously owned as well as those you currently own. If they believe that someone applying for funding has deliberately reduced their assets, there can be implications both for this person and for whoever receives them. Examples of this include: gifting money or expensive items to family members or friends; gifting property by transferring it into someone else's name; selling an asset, such as a property, to someone for less than its true value; and tying money up in a trust or in some other way.

What is NHS Continuing Health Care?

In some circumstances, the question of whether you will have to sell your home to pay for your care will not arise. The NHS will fund social care for some people with long term complex health needs. This is called ‘NHS Continuing Healthcare’ (sometimes referred to as CHC Funding) and requires an assessment by a multidisciplinary team of healthcare professionals. If your care needs are deemed to be eligible, this funding comes from the NHS and would mean that you did not have to sell your home. You can find more detail on how to secure CHC funding in this ebook: Care To Be Different by Farley Dwek Solicitors who are specialists in the area.

If you are currently in good health it is worth considering planning for the future, when long-term care may be required. Organisations such as Schroeders Personal Wealth can help you to plan your finances so that you may be able to fund long-term care without selling your home.

And, if you need legal advice, on such things as making a Will or drawing up a Lasting Power of Attorney (LPA), Autumna works closely with its trusted partner Parfitt Cresswell.

If you need help finding a care home or domiciliary care, you might find this quick and easy questionnaire and shortlisting service useful.

Alternatively, if you just want general advice on next steps in your search for later-life care, email Autumna on info@autumna.co.uk or ring our advice line which is open every day of the week (Mon – Fri 8.30am -5.30pm, Sat 10am – 5pm, Sun 10am – 4pm) on 01892 335 330.