5 June 2017
Understanding the 12-Week Property Disregard
Funding residential care is a topic we are frequently asked about. There are many different aspects to consider, one of which is the value of property. Here, we offer advice on the 12-week property disregard.
Nicky Cave is a Care Fees Adviser and Managing Director of Eldercare Solutions Ltd and is an Advisory Board member of the Society of Later Life Advisers.
What is a 12-week property disregard?
Your local authority must disregard the value of your property for the first 12 weeks of you moving into a care home on a permanent basis, provided your other savings total less than £23,250 in England and £24,000 in Wales and provided you meet their ‘eligibility criteria’ (i.e. they agree you need to move into a care home).
How much will they pay?
Your local authority will have a standard amount that they will be prepared to pay towards your care and, if this is less than the fee charged by your chosen care home, the home may require a top-up payment. This can be made from any remaining savings you have or a ‘third party’ could pay the top-up.
It is only the difference between your assessable income and the local authority’s standard contribution that will be paid by them. For example, if your local authority’s standard contribution is £500 per week and you have assessable income of £300 per week, they will be paying just £200 per week. If the fees at your chosen care home are £1,000 per week, for example, the care home will probably expect a £500 per week top-up to be made. This money (i.e. the £200 per week contribution x 12 weeks) does not have to be repaid to the local authority.
What happens after the 12 weeks?
If the property has still not been sold, or you have decided not to sell it, the local authority should be able to lend you the money to pay for your care through a ‘deferred payments agreement’ to be recovered when your property is eventually sold. Before entering such an arrangement, you should take independent advice from a care fees planning specialist, such as ourselves, so that you can fully consider any alternatives.
If the local authority knows you own your own home but do not tell you about available disregards, they could be liable to reimburse you if they fail to allow a statutory disregard and you pay more towards your care costs than you should have as a consequence.
For more information on all aspects of financing a stay in a care home, please visit www.eldercaregroup.co.uk where you can download a free copy of our Guide ‘Paying for Care’, or call us for a chat on 0800 082 1155. Or find your nearest Hallmark care home for more advice.