Legal Questions and Answers by
Jonathan Stones of John Barkers
Question :-
My 80 year old mother is considering going into a residential home. She currently owns
her own home and we have to face the decision about what to do with it.
Should she give the house away to the family now and if she does will it mean that she
is eligible for state aid to pay the residential home fees?
Answer :-
You are facing a situation which is now very common in a home owning society, when
people are living longer and when increasing numbers of elderly folk consider a move into
residential care.
The direct answer to your question about your mother’s eligibility for state aid
if she makes a gift of the house to the family before going into a home is that when she
comes to apply for financial assistance she will have to complete a long questionnaire
about her income and capital - and of course the house forms part of that capital.
She will be asked on the form if she has given away any capital recently and she would
have to disclose if she had just given away her house
In these circumstances, if she had given the house to the family shortly before
entering the home, there would certainly be further questions asked and it would more than
likely mean that she would not receive the full contribution to home fees that she had
expected.
If someone gives away their property well before there is any indication that they may
have to go into residential accommodation - in other words if the gift of the property was
not to deliberately avoid the payment of home fees - then that gift cannot be touched
later.
However, even then it is not a simple matter. The making of the gift can create
numerous legal problems. There have been situations in which the person to whom the house
was given has unexpectedly died, before the elderly parent . . . or they have gone
bankrupt . . . or they have been involved in divorce proceedings . . . and mother’s
or father’s house has been caught up in all that.
There are more sophisticated ways, to deal with the matter, such as putting the house
into a trust or taking out insurance to cover the situation.
At the end of the day it may not even be necessary. Surprisingly perhaps, statistics
indicate that only around 3 % of people actually end up in residential homes, so what
seems to be a major problem may never actually arise in your circumstances.
Another issue which you may like to take into account is the loss of choice. People who
haven’t got the private means to pay home fees will almost certainly lose the choice
of which home they enter and they will more than likely end up sharing a room with
somebody else, regardless of whether or not they wish to do that.
If your mother retains her assets and use them for home fees then at least she will be
able to select the home she wishes to enter, she will be able to choose to have her own
room and so on.
She will be entitled to retain a certain amount of capital and once she has dipped
below that figure, state aid kicks in to contribute to the home fees. There is a sliding
scale: If she has over £16,000 she has to pay all the home fees. Below £16,000 there is
increasing assistance.
Looking at your situation it would make sense to have a family conference and it would
make sense to involve a solicitor to advise on all the pros and cons, from both sides,
because what may be in the interests of the children may not necessarily be in the
interests of the parent.
Amongst other things, the process will produce a balanced view about whether or not
your mother is likely to be one of the people who end up in a home. You may decide that
the family will care for her - and in that case the home fees issue becomes irrelevant.
|
