Changes to the cost of long-term care

By Paul Lewis , Wednesday 13 February 2013

The Government has finally announced the changes it will make to the way long-term care costs in England are subsidised from 2017, writes Paul Lewis.
Payday loans can be a sign of financial hardshipThere are ways of reducing the cost of care before the Government's new scheme begins in 2017

But it will be many years before they affect anyone. So if you or a relative are in care now or expect to be soon and are worried about the cost, there are things you can do to avoid or reduce the cost of paying perhaps £30,000 a year for long term care in a home. These rules apply throughout the UK, though there are minor differences in Scotland, Wales, and Northern Ireland.

First, should the NHS pay? If your primary need is for health care then the NHS should pick up the whole bill for your nursing home fees. The first thing you have to establish is that the primary need of the person in care is a medical need – what is called a primary health care need - as opposed to just social care. Remember medical needs change. As we age, someone with a social need one day may well need medical care to survive at a later date. You apply to the Primary Care Trust in England and the corresponding body in the rest of the UK. In England there is a deadline of March 31, 2013 to put in a claim back to April 2011.

Second, will the local council pay? Normally it will. But the help is restricted in two ways. First, the council will only pay a limited amount for care – usually the charges it will meet are the cheapest locally available. Second, the help is means-tested. Income is above £23.50 a week is normally taken to pay the bill. And capital above £10,000 will also reduce the help available. The value of the resident’s former home is taken into account as capital in some circumstances. But the fear that ‘I will have to sell the house to pay for my care’ is always ill-founded.

First, the value of the former home is ignored in full if the person’s partner – married or not – is living there. It is also ignored if a relative aged 60 or more lives there and it can be ignored at the local council’s discretion if a younger relative or an ex-carer lives there.

Second – despite what politicians and newspapers say – no-one can be forced to sell their home to pay the fees even if it is left empty. Instead they can get what is called a deferred payment agreement. Under this deal the bill clocks up month by month interest free. The local council takes what is called a ‘charge’ on the home so when the person in the care home dies their former home is sold to settle the bill. Meanwhile of course the home could have been let out. And the person in the care home will count as a ‘self-funder’ and can claim a benefit called attendance allowance to help with the costs. Normally there will still be a lot of value left in the home for the heirs to share.

Using these tips the cost of care can be reduced, even before the Government’s new scheme begins in 2017.

* Read Paul Lewis's articles every month in Saga Magazine.

The opinions expressed are those of the author and are not held by Saga unless specifically stated.

The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.


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