New research suggests that local authorities are placing legal charges on the homes of around 60 people a week to claw back care costs.
Figures published by financial services provider NFU Mutual in September following Freedom of Information (FOI) requests to local authorities found that between 2009 and 2014, 72 councils had taken legal action to secure a share in 15,174 homes, the equivalent of just over eight homes a week.
If councils that did not provide FOI responses took a legal charge on homes at the same rate, the total number would be nearly 17 a day or almost 120 per week.
Figures from healthcare information specialists LaingBuisson suggest that the average 2013-14 cost of residential care was £28,500 a year, with the average cost in the South East exceeding this figure by some way.
Currently, only people with less than £23,250 in assets, such as savings or property, and low incomes receive help from the state with their residential care costs. The government is currently introducing changes that it says will mean that people with around £118,000 worth of assets or less, will start to receive financial support if they need to go to a care home.
The changes include the introduction of a £72,000 cap on each individual’s care costs from April 2016. However, individuals will still have to pay other charges, including “hotel” and general living costs if they are in a care home, such as food, energy bills and accommodation.
Some analysts have suggested that a care home resident could have to pay up to £150,000 in such charges before reaching the £72,000 cap for care costs.
As part of care system reforms, the government will also be making an existing system of deferred payment agreements more widely available in 2015. It says: “People who own their own home will be able to make an arrangement whereby they do not have to sell their home, during their lifetime, to pay their care home costs.
“Instead, the local authority will pay the costs, and recover the money that the person owes, plus interest, at a later date. This right can be offered in certain circumstances where an adult owns their home. Local authorities will be able to charge interest on these payment arrangements for the first time, so that they can cover their own costs of offering such agreements.”
Lee McClellan, a partner in Palmers’ Elderly Client department, who advises on long-term care issues, said: “Although the government cap on care costs will offer some respite for a small number of people, there is the potential for individuals and their families to face very significant costs for residential care and some will be worse off as a result of the changes.
“While an individual’s well-being must be the first priority, it is natural that people want to protect their home and other assets, for which they have worked hard over many years, to pass on to their families. Complex and evolving rules means that someone could easily pay more than necessary and we can provide expert advice to help avoid this. For more information, please contact our Elderly Client team.”