Well done Panorama (Monday 26 July 2010) for provoking some very valid questions about the future funding of adult social care in the UK and particularly to Joan Bakewell for emphasising the point that those in need of care now do not have the time to await yet more political handwringing about how to address the issue.

While solutions for the future remain as Jeremy Vine put it “ a thorn in the side of many governments to come”, attention must surely focus on what is available now and the needs of those currently going through the process of arranging care. “Death, Taxes and Care Fees Planning! There’s never a convenient time for any of them” Margaret Mitchell put it so well in her novel Gone With the Wind (although was of course referring to Death, Taxes and Childbirth!) the sentiment, however, seems appropriate.

Those entering this ‘arena’ will experience a bewildering number of agencies frequently working at odds with each other. Indeed obtaining accurate information is in itself a challenge. I would clarify that the Asset Means Test Threshold for England is £23,250 and not £23,000 as stated in this evenings programme. It may also help to clarify what is meant by the reference to FREE personal care in Scotland, this is a reference to the payment of both a ‘Nursing Care Allowance’ and a ‘Personal Care Allowance’ and does not mean that ALL care in Scotland is ‘Free’.

We believe the first step to empowerment is knowledge and through our ‘Guide to Care Fees Planning’ we provide a truly comprehensive overview of the system you are entering.

We are also tremendously proud of our recently launched ‘Care 2 Plan’ tool, this enables those wanting information specific to their own situation to create an ‘Options Report’ based entirely on their own individual circumstances. Simply go online to www.carefeesplus.co.uk/care2plan .

I would love to hear of your experiences, both good and bad, of the care system if you have or are in the process of arranging care. This helps us model our services to the public need and to lobby government and the financial providers to find solutions for tomorrow, today. Email me please on rene@twcp.co.uk.

So the subject of social care for the elderly is now ‘sexy’ in the journalistic and political sense, anyone would think there was a general election on the cards! Having waited 2 years for the Green Paper on Adult Social Care we now see all main parties using this document, and the debate that followed, as a political football with a view to scoring points rather than achieving effective change, changes it will take years to put in place.

The frustration of those working with families and individuals involved in arranged long term care continues and worry is fuelled by inaccurate and emotive cherry picking of the facts by both politicians and the the media alike. Importantly those in need of care cannot put their needs on hold to await the outcome of the current debate.

As care fees specialists, our advice line continues to answer calls from those concerned by the prospect of being forced to sell their home to fund care as it is this topic that is wheeled out as the focus of the debate whenever the need arises. Let’s be clear, the option to selling a property once the owner has taken up permanent residence in a care home is in the vast majority of cases the most practical and financially viable solution.

In this age of extended and independent families, sons and daughters have their own family homes, often in another area of the country to their loved one in need of care. There is no practical need to keep the property going once their relative has gone into the care home. In the event that a spouse or dependent relative will continue to reside at the property, there is no issue; they will not be forced to sell their property.

Let’s consider the alternative to selling, that of letting, to let the property will change the tax status and the taxable income from the property rarely covers the shortfall in care fees. This option will also incur legal and maintenance costs which will further reduce the income for the letting.

The ideal situation for anyone facing the need to fund their own care fees is undeniably to cap the cost of care and to ‘ring fence’ any residual capital for their future desires or for beneficiaries. Financial products do exist that are specifically designed to achieve this and to ensure no one need worry about ‘outliving’ their capital or have concerns that they may need to change facilities should that happen.

My own great dismay is the reluctance of the public sector to engage with specialist financial professionals and encourage families to explore the financial alternatives that could mean care fees would be guaranteed for life. This would benefit both parties as the care recipient need have no fears about covering the cost of care and the local authority will not be required to fund care when an individual’s money has run out thus preserving funds for those for whom local authority funding is the only option.

The Wealth Care Partnership continues to work towards raising awareness of financial solutions available for those facing the need to fund care NOW whilst engaging in the debate about future funding at every level. We encourage everyone to lobby their MP’s and write to local and national press on the issue’s of current and future funding options, and to continue to do so until a workable solution is found.  Lets have the agenda driven by the electorate for a change.

Arranging and funding care is an issue gradually working it’s way up the national consciousness, however, for those of us that settle down on a Sunday morning with The Archers for a little escapism, it is at the forefront of a continuing storyline.

In recent months the Archers and the Aldridges have had to cope with Jack Wooley’s declining health since his diagnosis with Alzeimers Disease and wife Peggy’s insistence that he must stay at home and that a care home is out of the question.

As a care fees specialist, advising those in just this position, I congratulate the script writers with the gradual way the storyline has developed. I know from experience that Peggy’s reaction is a common one and the stroke she recently suffered is one way in which the strain of coping with a loved one’s illness can manifest itself. The family’s uncertainty of how to achieve a solution to satisfy ‘mum’s concern for Jack’s well being, whilst ensuring that she is relieved of the role of primary carer leaves them feeling at a loss as to how to help and not knowing where to turn.

Then comes the awareness that Peggy is making economies and has developed a certain ‘carefulness’ with money despite being financially ‘comfortable’. Daughters Jennifer and Lillian finally pluck up courage to address the matter of money with mum, and the floodgates open, that the drop in income over the last year has resulted in her worrying about paying for Jack’s care and her own needs, that she has felt unable to cope but not wanting to be a burden to her very busy family. Well, Brian has now reviewed Peggy and Jacks investments and has agreed to set up a meeting with his financial adviser who is ‘an excellent chap’.

It’s how the story is developed from here that interests me, with only 150 advisers in the UK specialising in care fees funding, I wait to see if Brian’s ‘excellent chap’ is one of those and if not, if he will refer Peggy to such an adviser. I hope he does as an experienced specialist will not only be able to advise on exclusive options for funding care but would also be able to provide guidance and valuable points of contact for sourcing possible care solutions. If such an adviser had been consulted early on, not only Peggy, but the whole family, would have had a point of continuing guidance in all matters relating to Jack’s care and Peggy’s finances.

As Peggy herself observed this week ‘who knows what the future holds’, well in her case the script writers do! For family’s in similar circumstances, however, there is no script writer and so they are on their own, until, that is, they talk to a care fee specialist!

With the government’s Green Paper on Adult Social Care finally seeing the light of day we see a mixed bag of politically neutral proposals that face a longer journey into the light than the Green Paper itself.

As Karen and Tim outline below, the consultation period runs until November, we then await the White Paper, the publication of which may well follow a general election and change of Government.

This may sound an extremely bleak proposition but then, with the Government encouraging what it calls ‘The Big Debate’ on the the reform of Adult Care and Support in England, the electorate have the opportunity to turn this to their advantage.

By engaging in the debate, individual voices may shape the future. The results of the debate will provide fuel for any party’s manifesto into the next election, the *demographics tell us that by 2014 over 65 year olds will overtake under 16 in the UK and the over 65’s are the most likely to vote.  This fact will not escape the attention of any political party.

This presents each and every concerned care recipient, their family, care providers, charities and agencies to  make their feelings known and to drive home the need to make change to the care system a top political priority.

As a Care Fee Specialists, the prevailing comment we hear from  the families and loved ones of those receiving, or about to receive care, is the lack of a single agency to guide them through the practical process, let alone the funding.

The frustrations felt by having to deal with several different agencies, none of which seem to have the ability talk to each other, often leaves relatives drained having repeated the same story 2 or 3 times.  It is hard not to blame the individuals within these agencies but they are simply working within a system over which they have no direct influence.

You may be going through this process now for someone, you may be concerned for yourself or a relative, whatever your circumstances, your opinion matters.  Make your thoughts on the proposals put forward in the Green Paper count, The Wealth Care Partnership encourages everyone to engage in the debate.

I shall be lobbying my own local MP, Jeremy Brown, with my thoughts and am tremendously interested in hearing from you with your comments, indeed I’ll be happy to pass those on for the debate if you wish, you may contact me direct on rene@twcp.co.uk.

Remember you have until 13 November to make your voice heard and to ensure you influence the future of care in the UK, PLEASE don’t miss the opportunity.

*Government Actuary Dept 2003 projections

Background

On the 14^th July 2009, Andy Burnham, the Health Secretary announced in the House of Commons the long awaited Green Paper on Adult Social Care.  He is proposing that everyone in England will have access to a National Care Service that is “fair, simple and affordable”.

This, of course, is only the Green Paper, which sets out the Government’s proposals. Nothing becomes law until the White Paper is ratified in Parliament. Indeed, it is not expected to be effective until 2014.

There will now be a consultation process running up to mid-November and it is expected that a detailed White Paper will be published in 2010.  The General Election will have to take place before June 2010. It will be up to the new Government, perhaps a change in colour, to carry these proposals forward, or not.

Tony Blair, the former Prime Minister, told the Labour Party Conference in 1997 that he did not want children “brought up in a country where the only way pensioners can get long term care is by selling their home”.

Twelve years on, we have finally got the Government’s proposals but we have not got any real progress. Families currently dealing with long term care for their loved ones have to act now to protect their family’s capital from erosion.

Proposals

The Secretary of State for Health is proposing that everyone in England will have access to a National Care Service that is “fair, simple and affordable”.

The National Care Service is aiming to create a level playing field and end the postcode lottery of care services currently affecting those needing long term care.

 The Wealth Care Partnership fully endorses the setting up on such a service and feel it is well overdue. The current situation is totally unacceptable where families are bounced around Government agencies with no-one taking full responsibility of guiding and helping those thrust into dealing with a loved one needing care. It is our experience that the levels of service provided by Social Services and The Primary Care Trust differs widely across the country and this simply should not be the case. We do hope that the National Care Service does not turn into yet another inefficient, expensive and confusing, state-funded institution. It simply must be primarily a “Care” service.

Andy Burnham also claims that everyone in England will be guaranteed:

• Prevention services - the right support to stay independent and well for as long as possible and to delay care needs getting worse. 

Karen Rayner, Partner at The Wealth Care Partnership says “Until the Government are prepared to accept that the NHS is not helping an aging population by treating an illness once it has happened, and only then by the over use of prescription drugs and surgery, there will never be a world without long term illness. Substantial investment into educating the population about preventing illness through healthy living, from school age onwards is what is required. This is a “slow burner” and this is unlikely to happen in my lifetime let alone those currently in retirement”.

• National assessment - care needs will be assessed and paid for in the same way across the country.

“We do hope the National Care Service will remove the current Postcode Lottery affecting everyone who is facing long term care”. Ms Rayner continues, “It is to be remembered that Andy Burnham is talking about care costs and not living costs being covered by the new proposals. Living costs for those continuing to stay in their homes are likely to increase. For those moving into a care home the living costs will need to be paid for by the elderly person and may be higher than if they stayed in their own homes.”

• Joined-up services - all the services will work together smoothly.

Tim Anstee, Partner at The Wealth Care Partnership comments, “If Andy Burnham is able to pull this off, he will be seen as the next Nye Bevon, founder of the NHS in 1948.” He continues, “It is a terrific objective, but 60 years of the NHS has proved that it is totally unworkable.”

• Information and advice – the care system will be easy to understand and navigate.

Tim Anstee agrees that this is a wonderful objective. “There is a confusing maze of legislation and information depending on the levels of care and support an individual needs. People are genuinely confused about what is right for their loved one. Even those who work within Social Services or the NHS can find themselves lost in the maze and it is so difficult to know that you are doing the right thing for the elderly person concerned.”

• Personalised care and support - services will be based on personal circumstances and need.

Is this not something that should already be in place?

• Fair funding - money will be spent wisely and everyone will get some help meeting the high cost of care.

Again, these are wise words and make a good political soundbite. However, the reality is that whatever is paid to the care providers it will not be enough to give a high level of care to all. The Government are proposing they will pay towards the cost of care for all, but care costs vary from provider to provider and the support being offered will not be about everybody getting the same. Many care homes now insist on “third party top up” arrangements whereby family members must fund some of the care fees charged because the homes simply cannot provide the high levels of care their residents deserve, on Government payments alone. We cannot see the proposals changing this position.

It is interesting to note that the Government has been running a scheme in Scotland, whereby the person requiring care is able to receive Personal Care at £153 per week. If a person qualifies for Personal Care they are no longer eligible to receive Attendance Allowance (a form of tax free disability benefit worth up to £70.35 per week regardless of capital and income levels).

The Wealth Care Partnership believes that it is likely that this system will be adopted in England and many will not be able to claim this very valuable state benefit in the future if these proposals are adopted.

The Options

The Green Paper has proposed three options to be consulted on:-

The first option would be a Partnership Service, where the State would offer a proportion, possibly a quarter or a third of the cost of elderly care and the individual would fund the rest privately.

The second would be a voluntary Insurance Scheme, where people invest into a scheme before they have to be taken into care with the State part funding the programme. The Government says around 20 per cent of people could take up this option.

The third option would be a compulsory Comprehensive model, where all those over the age of 65 contribute to a national scheme that would, if necessary, offer everyone full state funded health care.

The Green Paper also states that both a fully state funded scheme and fully privatised programme would not be recommended.

Andy Burnham says the Government has calculated that the Partnership Scheme would cost an individual around £22,000. The insurance scheme could cost between £20,000 and £25,000 as a lump sum and he says the comprehensive scheme will cost around £17,000 to £20,000. He also says these proposals will not result in an increase to National Insurance and says the White Paper will include details for those currently in need of care.

The Wealth Care Partnership’s Tim Anstee states, “Each of the proposals are suggesting a cost of around £20,000, paid either during our working lives or towards the end of it. We would question the quality of care that this would provide. In certain parts of England a typical care home costs in the order of £35,000 to £40,000 per annum (including living costs) and we believe the Government has seriously underestimated the ongoing costs of care. People are living longer and spending many more years in a care environment.  It is also not clear whether social care is included, which is particularly important for the growing numbers of people suffering from dementia, who require no nursing care but cannot live on their own.”

Mr Anstee concludes, “The result of the debate will be released with a White Paper which is forecast to become effective in 2014. It is crucial that those in care now or about to go into care seek advice on the best way to plan for the costs involved. It is my belief that whatever option is chosen, although the Government are proposing to provide some support to all, we are still going to be paying for our care.”

When people get older and their health deteriorates, it is common that they feel they have no choice about where they receive their care.  Many are resigned to the fact that they may have to move into a care home, even though they may hate the idea and prefer to stay in their own home.

Couples who have been together for many, many years may feel they have no alternative but to live apart, when one of them requires long term care,.  This can often put pressure on the person who is not requiring care to firstly keep their partner at home for as long as possible, providing the care themselves and secondly, when it all becomes too much, to find a suitable care home and constantly travel to visit their loved one.

Placing a loved one into care can be extremely traumatic for all concerned.  Family members can feel terribly guilty and emotional, particularly if a care home is not where the elderly person wants to be.  Leaving beloved pets and personal possessions behind can also be a huge issue for the elderly moving into a care home.

Care at home could be an option for so many people, but this is often not considered.  There are many good quality providers of care in your own home and the cost is not necessarily more than a care home.  The solution could be to have a live-in carer providing companionship , housekeeping and personal care or, simple someone to come around every day to help with certain activities the elderly person is unable to do themselves.

Employing such individuals can sometimes cause a headache and can put people off receiving care at home. Many agencies do not deal with Pay as you Earn (PAYE) and National Insurance on your behalf but that is not true of all of them.

For those who are self funders (assets of more than £22,250 England) and do not have much by way of liquid capital to help pay for the care may need to consider releasing equity from their homes to fund this care.

Immediate Care Plans are a perfect way of paying for such care as it guarantees the payment each month, for as long as the person requiring care lives and payments can be set up to escalate each year to help deal with increasing care fees costs.

Call me on my freephone number to discuss your circumstances and I will be able to put you in touch with the right organisation and discuss payment options - 0800 6528232

Those who have assets over £22,250 (England - 2008/2009) will not get funding by the Social Services for their long term care.  The rules are brutal for those elderly who have saved all their lives and only have modest savings and the family home.  Most do not have enough income to pay for care and with care fees ranging from around £400 per week to over £1,000 per week, they need to use their savings and/or sell their home.  Here are some tips to help those people who are “self funders”:-

1.  Make sure you claim for Attendance Allowance for the person requiring care from the Department of Work and Pensions (DWP).  You can claim online at www.dwp.gov.uk or print off an application form.  This is not means tested and is tax free.  It could bring in either £44.85 per week or £67 per week - 2008/2009).

2.  Ensure the person needing care is receiving benefits they are entitled, such as Pension Credit.

3.  If a spouse remains in the home, claim for single person occupancy for Council Tax at your local council offices.

4.  The home is excluded for the Local Authority Means Test for the first 12 weeks of needing care.  This is not always made clear.  If the person in care has assets below £22,250 the Local Authority must fund the care for the first 12 weeks.  In certain circumstances the home is excluded from the means test beyond the first 12 weeks.

5.  If your savings are held within single premium life insurance bonds, where there are lives assured on the contract, these savings must be excluded from the Means Test.

6.  You may qualify for Fully Funded NHS Care.  This is not means tested however, you would only qualify if you need long term care following hospital treatment or because of a chronic illness or disability.

7.  If a property needs to be sold, seek specialist help with the sale.  There are companies who specialise in selling homes for the elderly in care.

8.  Seek professional advice from a financial adviser who is qualified for long term care.

9.  Consider purchasing an Immediate Care Plan.  This will pay a benefit to the care provider, tax free, for the rest of your life.  It’s a great way to cap the cost of care and provide peace of mind that you won’t run out of money.  See our other blogs for more information on Immediate Care Plans.

10.  If you haven’t already set one up, get advice on creating a Lasting Power of Attorney which will enable your loved ones to make financial decisions on your behalf if you become mentally incapable of making your own decisions.  You can also set one up to deal with your personal welfare too.

If you would like more information on what to do financially, if someone you love needs to go into care request a free copy of our Guide to Care Fees Financial Planning via our website www.twcp.co.uk.

It is quite common now for people to consider gifting the home so that the state can fund the care for the elderly people concerned. Indeed, I have just put the ‘phone down from a conversation with someone whose grandmother requires care and she has a property worth around £475,000 and £20,000 in cash. He wanted to know how she could gift the property into trust and avoid paying for her care. The chances are, this will not work. The local authorities are likely to consider this an act of Deliberate Deprivation. If the gift takes place within 6 months of needing care they have the power to recover any sums which have to be paid for care as they will consider the gift never took place, but there is no time limit as to how long after any assets has been gifted that they can take them into account.

Having advised on care fees planning for many years, it is my experience that this step can leave the elderly people in a more vulnerable position. Who really wants to lose their financial independence as well as their choice of care provider, by looking to be funded by the local authorities? What about the care providers, who are forced to accept payment well below their level of fees required to provide a quality level of care to their elderly residents, or ask for family members to top up the local authority payment?

By far the best route to keep your financial independence and peace of mind that hard earned capital is not eroded, is to purchase an Immediate Care Plan (ICP). We set up these plans to cover the difference between the elderly person’s income and the cost of care and the ICP will pay that benefit, totally tax free, to the carers, for as long as that person lives. It can be set up to increase each year, to help keep pace with the increase in fees, and capital protection can be purchased also to cover situations where the elderly person dies shortly after purchasing the plan. These plans protect the assets from erosion and the remaining funds can be invested in a low risk growth investment, which can be allowed to roll up and could pass to the family once the elderly person has died.

So many people embark on financial planning for elderly in care without seeking expert advice. It is essential that advice is sought not only from advisers with CF8 qualification, but those who actively work in this market. It is a minefield and you can get caught out if you haven’t properly planned your route.