Changes are afoot to the way care home fees are charged. This month, Rosie Dixey outlines how they will impact on your estate…
I’ve heard the government is going to cap care home fees. Does this mean I don’t need to worry so much about my children having something to inherit?
It largely depends on the value of your estate. The government has proposed a cap on personal care from October 2023 of £86,000, but it comes with some caveats. If your home and assets are worth more than that, there’s a good chance something will be left for your children, but professional planning is still essential.
There are currently around half a million elderly people living in residential homes in England and if you have assets/cash of more than £23,250, you are expected to pay for your care personally. Each case is individually assessed, but if your estate is under this amount, the state will part-fund your fees and fully fund them if your total assets are valued at less than £14,250.
The new lifetime cap means anyone – regardless of their wealth – will pay a maximum of £86,000 towards personal care in their lifetime. After that, the state will foot the bill.
However, this change to the care regime is not as good as it looks on the tin. To start with, it will not take account of any fees paid prior to the October 2023 start date. Plus, it is only a cap on personal care.
Care home fees comprise two aspects – the cost of personal care and the costs of living. The latter covers accommodation, food and other associated expenses, whereas personal care relates to the fees you incur to have your welfare and medical needs met, for example, any nursing assistance you require. Under the new rules, living costs will continue to be funded by the individual and are not subject to the cap.
Unfortunately, it is only care and nursing fees that will be affected by the new cap. To put this into context, the average weekly cost of residential care home facilities (living expenses) in 2021 was £681, whilst the average cost increased to £979 if nursing and personal care was needed. Therefore, the cap will only affect the £298 difference between these figures.
My advice would be to stay aware of the changing regulations and make sure you still plan for the future, if you wish to minimise the effect care home fees might have on your children’s inheritance.
To find out more about inheritance tax planning, why not book a free 30-minute consultation with one of our probate specialists? Call (0114) 218 4000 or email info@tayloremmet.co.uk
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