Duty of Care Golborne
Duty of Care
It may be possible that the care costs can be met and some capital protected to fulfil your mother’s wish of being able to leave an inheritance. This is as things stand now, but if her health deteriorates, requiring more intensive care, the costs could increase significantly, or possibly she could become eligible for fully funded NHS care.
At the moment, however, if your mother’s savings apart from the value of her property are below £21,000 then she is entitled to 12-week property disregard funding from Social Services, which could amount to around £3,500 to cover the first 12 weeks’ fees. She should also claim higher-rate attendance allowance, worth £62.25 per week, rather than the lower rate of £41.65 per week she is currently getting. After the 12 weeks, because she is receiving attendance allowance, she may also be eligible for pension credit with severe-disability premium whilst her property is on the market, worth another £160.80 per week less her pension.
Having clarified her state entitlements, you need to find a solution to deliver the certainty of a regular income to meet the fees over the possible long term that does not use up all her capital.
To provide this, consider an Immediate Need Care Fee Payment Plan, normally at a lower cost than a traditional annuity because the purchaser is deemed to have an ‘impaired life’; the income, if paid direct to the care home, is tax-free. The cost of this plan based on her health is £46,143 and will continue meeting the shortfall from the outset, increasing by 5 per cent compound per annum for as long as she needs care.
Alternatively, because of the uncertainty of her life expectancy, you could purchase a Deferred Care Plan to commence payments after a two-year waiting period. That would cost £29,238, significantly less expensive than the immediate plan.
It would be sensible to keep, say, £15,000 on deposit for contingencies. Because the care plans are potentially capping the cost of the care, you could invest the remainder for growth to provide the potential inheritance your mother so wished to leave.
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