Means Testing Property

Means testing property

If you need care to remain in your own home, the means test won’t include the value of your own property. If you need to move permanently into a care home, the test may include the value of your property. This is calculated at present market value, less any mortgage or loan you have on it, and less 10% of its value where there would be expenses to sell it.

The test must consider joint owners who own different amounts of the property. The value of your property won’t be counted if it’s still occupied by:

  • Your partner or former partner unless they are estranged from you.
  • Your estranged or divorced partner if they are also a lone parent.
  • A relative who is aged 60 or over.
  • A child of yours aged under 18.
  • A relative who is disabled.

If your property is going to be included in the permanent care home means test, the council must ignore it for the first 12 weeks of your care. This is to give you time to decide what to do with your property and how to pay the fees. You will likely qualify for help with fees from the council for the 12-week period if your other capital assets are below £23,250.

If your home is included in the means test, you may be able to delay selling it to pay fees by entering into a “deferred payment agreement” (DPA) with the local council.

This is where the council makes a legal agreement to provide financial support for your care costs, on condition they will be repaid from your property later.

This usually involves the council placing a legal charge on your property with the Land Registry to secure repayment.

A deferred payment agreement could last until you die, after which the costs will be paid from your estate. Or it could be a temporary arrangement to give you time to sell your home when you choose to do so. Your local council must offer you this option if you meet certain qualifying criteria.

It may be tempting to consider reducing your assets to avoid paying care costs, but if a council has reason to believe you have done so, they may still include the value of those assets you no longer have in the means test.

This includes:

  • Giving away a lump sum of money to relatives or to a charity.
  • Transferring the title deeds of your property to someone else.
  • Suddenly spending money in a way which is abnormal.
  • Using savings to buy a car, which would be excluded from a means test.

The means test will assume you are receiving all the benefits you are entitled to, even if you are not claiming them. Benefits you may be eligible for include:

If you are assessed as eligible for council funding for some or all your care needs, you can decide to let the council arrange care and manage payments on your behalf, or to take the funding as a direct payment.

Some people with significant ongoing health needs may find they are eligible for NHS Continuing Health Care (CHC) Funding. Your local Integrated Care Board (ICB) is responsible for the commission of NHS Continuing Healthcare. Eligibility isn’t based on whether you have a specific health condition. To qualify, you must be deemed to have ongoing significant physical and or mental health needs and having taken account of all your needs, it is judged that most of the care you need is focused on addressing and or preventing health needs. This definition is subjective, and it may be challenging to secure NHS continuing health funding.

Good to know:

Several organisations provide free and practical advice on paying for care including:

You can also seek support from a specialist in financial advice if you need more detailed help on paying for care. You can find accredited advisers at the Society of Later Life Advisers:

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