How your capital effects your financial assessment
If you have capital (including savings) of more than £23,250 you will have to pay the full cost of your care (this is called self funding). We will not be able to contribute to the cost of your care until your capital drops below this threshold.
If you have capital (including savings) between £14,250 and £23,250 we will assume you have a ‘tariff-income’ of £1 per week for every £250 of savings over £14,250, and you will have to pay this ‘tariff income’ towards the cost of your care. So, for example, if you have £15,250 in savings we assume an income of £4 per week which will be taken into account when working out your charge. Savings are rounded up to the nearest £250 for the purposes of this calculation.
The information below will answer questions such as:
- what if my savings or capital are jointly owned?
- will all of my capital be taken into account?
- will my home always be taken into account?
- what happens if i give my money away?
- what can I do if I don't have enough capital?
- what if I have not been able to sell my property?
What if my savings or capital are jointly-owned?
If you are a joint beneficial owner of assets (i.e. whether or not you are registered as the legal owner of an asset, you have a financial interest in it), we will only take your share into account when calculating your capital level. For example:
- If you have a joint savings account with your spouse or civil partner, we will presume that only half of the sums deposited there are yours and will take them into account, but will not take into account the remaining half when calculating your savings.
- If you co-own your home we will take into account only the share which is actually yours. Sometimes a home will have only one registered legal owner, but more than one person will be entitled to some of the proceeds of sale (for example, if other people have contributed to the purchase price of the mortgage payment). Only the proportion to which you would be entitled will be taken into account.
For more information, please contact the Financial Assessment Team on 020 8359 2238.
Will all of my capital be taken into account?
Some capital or assets are not taken into account when calculating how much you must pay towards your care home charges. For example:
- Any proceeds from cashing in a life insurance or annuity
- Personal possessions (unless deliberately acquired to reduce the amount of savings and investments you have).
These are only examples. Please contact the Financial Assessment Team on 020 8359 2238 for any detailed advice.
Will my home (or my share in it) always be taken into account when assessing my contributions?
There are a range of situations where the value of your own home will not be taken into account when assessing how much you must contribute to the costs of your care. If your stay in a residential home is a temporary one, then the value of your home is ignored as long as you:
- Intend to return home, and your home is still available to you
- Are taking reasonable steps to sell your home to allow you to move into a more suitable place on your return.
If your stay is permanent, the value of your home is ignored for the first 12 weeks. After that time, the value of your home is taken into account, unless it is still occupied by:
- Your partner or spouse (including a civil partner)
- A child under 16 years of age who is dependent on you
- A relative or family member who is over 60 years of age
- A relative or family member who is disabled - this could be a son or daughter with a physical or learning disability
- Your estranged or divorced former partner or spouse (including a former civil partner), if they are a lone parent of a child under 16 years of age.
Barnet Council also has discretion to disregard the value of your house and review the decision later if a person other than those listed above lives in your property. The council may decide to exercise this discretion, for example:
- If when you lived at home, you had a carer and they gave up their home in order to live with you and care for you
- When you lived at home, you had an elderly companion and they gave up their home in order to live with you.
What happens if I give my money, assets or other capital away?
If you have given away money, assets or property in order to avoid paying care home charges, those sums may continue to be treated as your income or capital when assessing how much you can and must pay. The council may take action against the recipient(s) of the assets you have given away or ask them to pay some of your costs.
If my home counts as capital, but I do not have enough income or other capital to pay the care home fees, what can I do?
You can either:
- Put your home on the market for sale. (You may wish to consider seeking an equity release scheme or other bridging loan whilst waiting to sell your property).
- Rent out your home - but you must make sure you get enough money to cover the full cost of your placement
- Apply to enter into a Deferred Payments Agreement with Barnet Council (see below).
What is a Deferred Payments Agreement?
The Deferred Payments Scheme is for certain people who have been assessed as needing to pay the full cost of their care home fees, but cannot afford to do this immediately because their capital is tied up in their home. To qualify for a deferred payment, you have to meet certain criteria. For example, one of the criteria is that a member of your family must live in your property. Another example is that you would not otherwise qualify for a disregard of the value of your property.
When you enter into (sign) a Deferred Payment Agreement with the Council, the Council will place a legal charge on your property with the Land Registry. You will be required to pay a weekly contribution which will be assessed as due if your home (or if jointly owned, your share in it) were not taken into account. The Council will however fund the remainder of your care home charges until the property is sold, or you die, whichever is the earliest date.
As a result of the legal charge on the property, the Council will be able to recover the outstanding amount through the sale of your property. If on the other hand if you were to die and your family chose to pay the outstanding amount whether through the sale of the property or not, the Council will inform the Land Registry to release the charge placed on your property.
The outstanding amount would be the full cost that you would be assessed as having to pay if your home (or your share in it) had been taken into account, less any payments you had already made.
You may be allowed reasonable expenses to maintain your property, but these expenses would be added to the final sum that you owed to the council. No interest would be charged until a date specified under the terms of your agreement with the council, or until 56 days after your death, whichever is earlier.
The Financial Assessment team can provide you will information about the scheme and whether you are eligible to apply for a Deferred Payment You can contact the Financial Assessment Team on 020 8359 2238.
What is the 12 Week Property Disregard?
If you are going into permanent residential care the value of your home will be ignored for the first 12 weeks of your permanent stay, whatever your financial situation, and whether you intend to sell your home or not.
During those 12 weeks, you will be charged as if you did not own a home at all, although your savings will still be taken into account.
From the 13th week, your home (or your share in it) will be counted as capital and you will have to pay the full cost of your placement if this takes the amount of your capital (including savings) over £23,250. If the property is sold within the 12 weeks disregard period, the full cost becomes applicable as soon as it is sold.
What if I have not been able to sell my property?
From the 13th week, your home will usually be taken into account, and this may mean that you will become liable for the full cost of your placement. Ordinarily, you would need to seek a private arrangement with the care home or arrange a bridging loan. In certain circumstances, you may be eligible for a deferred payment under Barnet’s Deferred Payments Scheme (see above).
Email this pageLast modified by: Dawn Rowe on 22/10/2010