In her manifesto for the 2017 general election, Theresa May set out proposals for reforming the care fee funding regime which sparked a backlash about the so called “Dementia Tax” that, arguably, cost her a majority.
Stung by the reaction, the government has not pursued the proposals but instead promised a consultation. Whatever happens, the problem of funding social care needs to be addressed. A recent “Dispatches” programme highlighted the issues and is available to view on All4 until 20 December.
So what is the “Dementia Tax” and can it be avoided?
Eligibility for financial assistance from the state is currently means-tested. People with assets worth over £23,250 have to pay in full for their care. The value of a person’s home is taken into account when a person is living in a residential care home, but not when receiving care in their own home and this is what the Conservatives proposed to change.
Many people are forced to sell their homes in order to pay for their residential care costs using up assets which might otherwise have been left to their families.
You will come across companies (some of which feature in the Dispatches investigation) who will claim confidently, for a hefty fee, to help you avoid paying for any of your care by placing all of your assets in trust during your lifetime. As with most things in life, if it sounds too good to be true, it usually is. Trusts can be helpful in specific circumstances but often this planning is seen as a “deliberate deprivation of assets” which stops the planning from working for care fees.
The best way to avoid the pitfalls of the funding regime is to take specialist advice on your rights and options including when the value of your property should be disregarded, the possibility of obtaining NHS continuing care funding and the how Wills can be updated to protect assets if a surviving partner requires care. If you do have to pay for your care fees then expert financial advice is invaluable to boost your income in order to slow down the depletion of savings.
If you would like more information, Stephen can be contacted on 01892 506 341 or email email@example.com.