Financial information for self-funders choosing residential care
We are lucky in Dorset to have some very good residential and nursing care homes. The Care Quality Commission (CQC) inspects each home and assesses the quality of care it provides. You can see reports for Dorset care homes on the CQC website. Each care home is put into one of five bands. Band 1 homes are the cheapest and Band 5 homes are the most expensive.
If the Council has assessed your care needs and found that you are eligible for social care under the Care Act 2014, but your assets are above £23,250 then we call you a ‘self-funder’. That means you will be paying the whole bill for your residential care. One of the benefits of being a self-funder is that you have a wider choice of care home than you would have if the Council was paying the bills. Once you have chosen the home that’s right for you, you will probably want to stay there as long as you can by making wise decisions and making your money last. Dorset Council has written this leaflet to give you information to help you avoid some of the more common financial problems that self-funders experience in making their money last.
Maximise your income
Are you claiming all the welfare benefits you are entitled to? For example, Attendance allowance is payable to people in residential care who are over pension age if they need extra help with washing, dressing or eating, due to an illness or disability. Attendance Allowance is worth up to £89 a week from April 2020. It isn’t means-tested, you just need to meet certain criteria to qualify.
Don’t give your assets away
In the past, some people have been tempted to create a Trust, or give away property or large sums of money, in the hope that the council will then pick up the bills for their care. There can be serious repercussions arising from doing this – both for the person giving their assets away and for the person receiving the assets. For a completely independent view of the risks, visit the Which? later life care.
Make your assets work for you instead
Many people know about equity release schemes, but not so many people know about a ‘Deferred Payment Agreement’. This is a loan from the Council, secured on your home, that you can use to pay care home fees. It doesn’t work in the same way as a conventional loan. The Council doesn’t give you a fixed sum of money when you sign the Agreement, instead it pays an agreed part of your weekly care and support bill. The deferred part can last until your death, although many people choose to use it as a ‘bridging loan’ to give them the flexibility to sell their home when the time is right for them. Other people choose to take up a Deferred Payment Agreement so that they can rent their property out to earn additional income. This scheme is only accessible to individuals who have had a care act assessment and are assessed to require 24hr care support.
Choose a care home that is affordable for the long-term
One of the most important things about a care home is of course whether it can meet your care needs. You may find several care homes that can all meet your care needs, but they all charge different prices. Put simply, the more you pay each week, the quicker your money will run out. How long your money will last is something to bear in mind when you are choosing, because if your assets fall below £23,250 in the future and you don’t have a friend or family member who will pay a ‘top-up’ for you, the Council will consider moving you to a cheaper home that can meet your care needs.
Power of Attorney
There are several reasons why you might need someone to make decisions for you in the future, or for them to act on your behalf. It could be temporary: for example, if you are in hospital and need help with everyday things such as making sure bills are paid. Or you may need help to make long-term plans if, for example, you are diagnosed with dementia.
A lasting power of attorney (LPA) is a legal document that lets you (the ‘donor’) appoint one or more people (known as ‘attorneys’) to help you make decisions or to make decisions on your behalf. This gives you more control over what happens to you if you and can’t make all your own decisions.
You can arrange a lasting power of attorney for £82 by looking at Gov.UK power of attorney, or you can speak to a solicitor.
Do I need independent advice?
It may be a good idea to get independent legal or financial advice if you are unsure about how to pay for your care. For example,
- if you need advice on specific financial products to get the most out of your assets
- if you are considering entering a legal agreement, including the Deferred Payment Agreement described in this leaflet
- if you feel that another person or organisation may not be acting in your best interests.
Independent Financial Advisers (IFAs) can give you advice on financial matters and recommend suitable financial products, but you are likely to pay for their advice.