Means Testing - Upper and Lower Limits
If you own more than the upper limit currently £23,000, (which includes
your property, any cash or savings and stocks and shares) you will be expected
to fund the full cost of your care fees. You would not be able to receive any
financial help from your local council until your savings (assets) have been
reduced to the upper limit.
If you have less than the upper savings limit or, when your savings drop to this
limit, the local council will then assess your ability to pay based on both your
capital and income.
If you have assets below the lower limit currently £14,000 then any contribution
you may be required to make towards the cost of your care will be based solely
on your income and your assets disregarded.
Losing Your Home to Care
If you own your own home then its value will usually
be counted as capital. There are some important exceptions
to this rule.
- Your property will be disregarded for the first 12
weeks after you enter care permanently.
- If your husband, wife, unmarried partner or civil
partner lives in your home then its value will not
be counted as capital.
- If a relative aged 60 or over
lives in your home, it’s value will be ignored.
- If a relative under the age of 60 who is incapacitated
(ie. receiving Incapacity benefit or disability Living
allowance) lives there, then again the value will be
- If your home is occupied by
your estranged or divorced partner and he or she
is a lone parent with a dependent child, it’s
value will be ignored.
- The value of your property
should be ignored if you are liable to maintain a
child under the age of 16 and your house is the child’s
main home. The child must be either a relative of
yours or a relative of a member of your family.
There are other situations in which the council may
ignore the value of your home at their discretion.
If you jointly own your home with someone who does not
fit into any of the above categories ie. a relative under
the age of 60 or a friend, then in this situation the
council will designate a value to your Interest in the
property. The value will depend on the price that your
share of the property could be realistically obtained
from what is termed as a willing buyer.
If your co-owner is unable or unwilling to buy your share
from you, your interest in the property could be held
to be worth nothing. This is because it is highly unlikely
that an outsider would want to buy into a property when
this would involve sharing it with someone else. (Charging
for Residential Accommodation Guide- Department of Health-
C.R.A.G Regulations Section 7.014 of the Social Securities
You are most at risk of losing your home to care costs
when you enter care after owning your home jointly with
a spouse, unmarried partner, or civil partner and they
have passed away. The full capital value of your home
will have passed to you and you will be assessed on the
property’s full value along with any formerly joint
held assets, such as savings.
Whilst the council cannot force you to sell your home,
if you are unable to cover your care home fees the money
you owe your local council will mount up. However, the
local council can allow you to defer part of your contribution
if you are unable or unwilling to sell your home and
you do not have enough income or other assets to cover
your full fees. This will be seen as an interest free
loan or a deferred payments agreement and will be paid
back when your property is eventually sold, or when your
estate is wound up.
The deferred payments agreements could involve a legal
charge being placed on your property. The amount of money
you owe will then start to incur interest 56 days after
your death, or the date you terminate the deferred payments
agreement. You may also have to cover any legal costs
involved in placing such a charge. These costs will have
to be paid up front and will not be added to your deferred
Although you are able to defer the part of contribution
that is based on the value of your home, you will still
have to contribute any other assets or income you may
have towards the costs of your care home fees.
In certain circumstances the local council may refuse
to enter into deferred payments agreements. They must
state their case in writing to you and you will have
the option to complain about their decision.
How Can I Prevent My Home Being Sold?
Most people work hard throughout their lives and want
whatever assets they have built up to be passed down
to their children and grandchildren, so losing their
property to care costs is a severe blow.
The simplest way to avoid this happening is to firstly
change the way in which your property is owned. Most
people when buying a property with another person have
the property set up as Joint
Tenancy and whilst this may be the correct
way to own a property in certain circumstances, for the
vast majority of people this is not the best way to own
a property for either Care Cost issues or Inheritance
Severing the tenancy on the property and changing the
ownership to Tenants
In Common, so you now each own 50% of the
property (percentages of ownership can vary according
to individual requirements) and then by setting up mirror
Wills, each bequeathing the Testator’s share of
the property to either a Property Trust or Family Trust
can ensure that your home is not lost to care.
On the first of you to die their share of the property
is left to the Trust, whose beneficiaries will be the
spouse or partner, children, grandchildren or other named
beneficiaries. Whilst the surviving partner continues
to reside in the property there are no issues but once
the survivor goes into care this is when property and
assets will be assessed for care costs.
Once again the council would designate a value to the
survivor’s interest in the property and once again
the value would be dependant on the price that could
be obtained from a willing buyer.
As before, it is highly unlikely that an outsider would
be willing to purchase a property when part of it could
be legally occupied by any of the beneficiaries named
in the deceased persons Trust (usually his or her children/
grandchildren) and so, the value of the person’s
share entering care would be held as being nil.
So I Can Protect My Property, But What About My Other Assets?
As previously stated, when entering Care all assets,
property and income will be assessed.
Assets such as Cash, Stocks and Shares, Bank and Building
Society accounts, PEPS and ISAs etc will be determined
as liquid assets and in addition to any income received
will be assessed for Care.
By changing the way your assets are both held and invested
will ensure that they are not assessed for care costs.
Call 01444 883100 or 01489 481569 for more information
or simply register to download one of our guides.