But I am worried that if I do sell the property when my mum dies, the council will activate a charge on the property to cover the cost of my mother's care. Is this likely to happen? P.H
Expensive: Paying for care in later life is a serious concern for many current and future pensioners.Adam Uren, of This is Money, says: Not only does having a close relative residing in a care home take a significant emotional toll on families, but the huge cost of providing the care is a serious concern for pensioners and their relatives.
Some background. The Government is taking steps to cap the total amount individuals have to pay for care at £72,000, but this is still a hefty amount that does not take into account accommodation costs that have to be paid on top of care.
As such, those without decent retirement savings still face the prospect of using their properties to pay for their care, either by selling or downsizing, or through products such as equity release.
More... Lack of retirement savings 'biggest threat to British quality of life' as many pensioners still expected to sell home to pay for care Pension payouts tumble by 29% since money printing began - but there's hope on horizon with rates tipped to rise Is equity release right for you? Find out using this free guide Retiring soon? Search for an annuity quoteProperties can also be used to pay for care through local authority 'deferred payment schemes', when a person's property is used in the assessment to determine how much they will contribute towards their care.
This scheme allows a person to keep their property while they are in a care home and still get help from the council to pay their fees - with this financial assistance recovered from the proceeds from the sale of the property when that person dies.
But there are exceptions that prevent people having to put up a portion of their homes as a guarantee on their care home under deferred payment schemes, and in this case it would appear the the reader qualifies because of her age and because she's living in her mother's home.
Janet Davies, of care home fees planning firm Symponia, says: 'As you quite rightly say a person’s home is disregarded if a relative over 60 lives in it. So providing that your mother’s home is your main residence and you lived there (and only there) for a while before she needed formal care, then it should be excluded.
'Your comments about your mother already being in receipt of local authority contributions would suggest that this is the case. This key fact should have been documented in the letter confirming the outcome of the assessment and the contributions.
'If the property is subject to the disregard it will continue to be excluded whilst it remains your main residence. If however you sold it during her lifetime, then the proceeds would be included in her assessment from the completion date and she would stop receiving any contributions.
'After your mother’s passing the house and/or its value will form part of her estate, and how this is treated thereafter will be determined by the details and wishes set out in her will or by the laws on intestacy if she doesn’t have a will.
'Sorry if this sounds obvious, but once your mother passes, she will no longer need care and the need for the Local Authority to provide funding will cease. There should be no need for you pay back any of the money contributed by the council.
'The only exception to this will be if the property is actually being included in her assessment and the council are offering the “deferred payment scheme”. If this is the situation then yes, the all monies paid out towards her care would need to be repaid after her passing.
'From what you have said the latter is unlikely to be the case, but it will be worth double-checking with the social worker to put your mind at rest.'