How to avoid selling your house to pay for care

Questions about funding care?

Call us for your free consultation with one of our friendly UK care experts. If you need further support, our Care Concierge service is on hand to provide guidance on typical care costs, help you explore your funding and benefit options, or even negotiate care fees on your behalf.

Find out how Care Concierge can help you, or call now on freephone:

0800 098 8299

(Mon-Fri, 9am-5pm)

12 Week Property Disregard scheme

The Property Disregard Scheme is when the local authority pays for a care home for the first 12 weeks of a person’s residence, if that person owns a property and has no dependents living there.

This means that the local authority will disregard the value of your property for the first 12 weeks of your care when assessing how much you need to pay towards the cost of your care home.

This gives you some time to consider whether you want or need to sell your home to pay for care home’s costs, rather than having to rush into a decision.

This can also be useful if you don’t know whether you plan to stay in a care home long-term, or are requiring some respite care.

After 12 weeks, the value of your property will be counted as part of your capital and you will be required to pay the full cost of your care.

Deferred payment agreements

You may be able to delay the sale of your property by arranging a deferred payment agreement (DPA) with your local authority.

A deferred payment agreement is a loan that can be requested from your local authority.

The local authority will then pay your care home fees, and use your property as security against the loan. It means you are basically borrowing money to put towards your care home fees, and this loan is repaid at a later date.

You can delay repaying the loan until you choose to sell your home in the future, or it can be deferred until after your death. After your death, the costs will be paid from your estate.

See more about deferred payment agreements.

Renting out the property

If you face the prospect of selling your home to pay for care fees, you could first explore renting out your home, even temporarily.

This can be particularly useful if market conditions mean that by selling today you might not get the property’s full value.

However there is a lot to think about when considering to rent out a property to pay for care home fees:

• There may be periods of ‘down time between tenants when the property isn’t providing you with any income
• Using a letting agent to manage the property will incur extra costs
• Costs like repairs and redecorating can crop up unexpectedly
• The income you receive from the rent might push you over the limit for local authority help, meaning you need to contribute more towards care costs

It is recommended to consult a care fees adviser before making any large decisions about your property.

See more about renting out your property to pay for care.

Summary

Do I have to decide whether to sell my property before I move into a care home?

No, you may be eligible for the Property Disregard Scheme. This means that the local authority will disregard the value of your property for the first 12 weeks of your care when assessing how much you need to pay towards the cost of your care home.

This gives you some time to consider whether you want or need to sell your home to pay for care home’s costs, rather than having to rush into a decision.

Can I delay the sale of my property, even if I decide to live permanently in a care home?

You may be able to delay the sale of your property by arranging a deferred payment agreement (DPA) with your local authority. A deferred payment agreement is a loan that can be requested from your local authority.

The local authority will then pay your care home fees, and use your property as security against the loan. It means you are basically borrowing money to put towards your care home fees, and this loan is repaid at a later date.

Could I rent out my property to pay for care home costs, instead of selling it?

If you face the prospect of selling your home to pay for accommodation, you could first explore renting out your home, even temporarily.

This can be particularly useful if market conditions mean that by selling today you might not get the property’s full value. However, you will incur other costs such as repair, redecoration and letting agent fees if you use one, so these costs need to be factored in.

Can I give away my property in order to get more funding towards care?

Giving away your home (by transferring the deeds to someone else) or other assets specifically in order to reduce the amount you need to pay towards care is known as ‘deprivation of assets’.

If the local authority carries out a financial assessment and determines that a deprivation of assets has occurred, they may decide to calculate your financial liabilities as if you still owned your asset. This can mean that you are liable to pay more for your care than you can afford.

Questions about funding care?

Call us for your free consultation with one of our friendly UK care experts. If you need further support, our Care Concierge service is on hand to provide guidance on typical care costs, help you explore your funding and benefit options, or even negotiate care fees on your behalf. Find out how Care Concierge can help you, or call us now on freephone:

0800 098 8299 (Mon-Fri, 9am-5pm)

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