Arranging care for a loved one can be a sad and daunting process. Understanding how social care planning works will take a great deal of stress and anxiety away during this time. It will help everyone involved to make a solid plan to achieve the best quality of care in the most appropriate setting.
What type of care is needed?
The need for care is most commonly determined when the individual demonstrates a reduced ability to carry out day to day tasks due to mental or physical deterioration. As a family, you will then need to discuss the type of care that the individual might need.
The first question is whether they are able to remain in their home with the help of live-out carers or whether they need to move to a residential unit. Where more specialised medical care is required, a nursing home may be deemed the best option.
Paying for care
The question of how to pay for care naturally takes precedence during the process. The average monthly cost of living in a residential care home in the UK is £2816 while receiving nursing care in a care home costs on average £3552.
Key financial questions will usually include:
- How much capital does the individual have available to contribute towards the cost of care?
- Will their dependents want/be able to contribute financially?
- How might all of the above financial considerations impact on the legacy that the individual will leave behind and wider intergenerational wealth planning?
Social care reform
While financial support is available from your local authority, the savings and assets threshold in England for 2021/22 is extremely low. This states that any individual with capital of more than £23,250 will have to pay all of their care costs themselves. If you have ongoing physical or mental health needs, you may qualify for financial support in the form of NHS Continuing Healthcare Funding. You may also qualify for NHS funded nursing care, even if you are self-funding your care costs.
Thanks to COVID-19 highlighting the urgent need for systemic change in the care home system, the landscape is changing. National Insurance tax will increase 1.25% from April 2022, in part to fund social care reform. As of October 2023, the social care system will change so that anyone with assets worth less than £20,000 will have their care costs fully covered by the government (if they are starting care). Those with assets between £20,000 and £100,000 will be expected to contribute to the cost of care but will also be eligible for state support covering some of the costs, based on means testing.
The guidance of a professional financial adviser will prove invaluable in navigating sensitive and often-complex issues surrounding care planning. Contact TR Wealth today to find out more.
The information contained within this communication does not constitute financial advice and is provided for general information purposes only. No warranty, whether express or implied is given in relation to such information. Vintage Wealth Management or its associated representative shall not be liable for any technical, editorial, typographical or other errors or omissions within the content of this communication.