Sold home to pay care costs
Discussion
Looking for some input on this situation. My mother went into a care home with dementia last year. I have both POA's in place. Following a financial means test by the local council, mum is declared as self funding. I have an offer on her house at the moment. There is no mortgage on the property and we are talking around 190k post sale which will have to go towards her care home fees of around 950 per week. She has no other assets or investments etc, just her state pension.
My questions are, I am assuming this money is not liable to income tax?
Shall I just speak to the bank about any investment options for this money to try and squeeze a bit of interest on it while still having to pay her care home fees monthly?
I am not resident in the UK, I am in the US and have dual citizenship.
My questions are, I am assuming this money is not liable to income tax?
Shall I just speak to the bank about any investment options for this money to try and squeeze a bit of interest on it while still having to pay her care home fees monthly?
I am not resident in the UK, I am in the US and have dual citizenship.
geeman237 said:
My questions are, I am assuming this money is not liable to income tax?
Shall I just speak to the bank about any investment options for this money to try and squeeze a bit of interest on it while still having to pay her care home fees monthly?
No, as long as it's her primary residential home etc it's not subject to income tax or capital gains in the UKShall I just speak to the bank about any investment options for this money to try and squeeze a bit of interest on it while still having to pay her care home fees monthly?
As regards investing the money, it will probably only last for 4 years at the rate of costs you indicate, which is far too short a horizon to play with any riskier assets - maybe you could squeeze 100 bps over best buy long-term deposit rates with a global bond fund but I wouldn't bother.
You need to consider what your plan is for when your mother runs out of money. Make sure that you are not paying more than you need to in the first instance as another posted suggested and make sure you fully understand whether your mother can stay where she initially goes when the money runs out or whether you have to move her etc.
With regards to concerning yourself over the best returns for the proceeds of the sale of property I would suggest that you are currently looking at the wrong thing at the wrong time. The money raised needs to be kept secure and low risk for obvious reasons and that means the return you can expect to achieve will be very low. So in terms of the overall economic and cost picture you can put it down on the price of paper under the ‘irrelevant and misleading’ heading.
What’s important is to focus primarily on the acts that will yield the highest and best returns not the one that will yield the lowest.
As with most situations it is the cost savings that generate the largest return and by magnitudes.
The first big return is to be had from ensuring that your mother is in the right home to begin with and that she isn’t paying more than she needs to or is setting up a guaranteed expense of moving in x years time. The return from getting that right will be double digit year in year.
The next big return comes from pre-paying the fees. Paying monthly so that the capital can sit earning 3% is obviously mad if you can negotiate a 5,10 or 15% fee reduction by paying a year upfront.
With regards to concerning yourself over the best returns for the proceeds of the sale of property I would suggest that you are currently looking at the wrong thing at the wrong time. The money raised needs to be kept secure and low risk for obvious reasons and that means the return you can expect to achieve will be very low. So in terms of the overall economic and cost picture you can put it down on the price of paper under the ‘irrelevant and misleading’ heading.
What’s important is to focus primarily on the acts that will yield the highest and best returns not the one that will yield the lowest.
As with most situations it is the cost savings that generate the largest return and by magnitudes.
The first big return is to be had from ensuring that your mother is in the right home to begin with and that she isn’t paying more than she needs to or is setting up a guaranteed expense of moving in x years time. The return from getting that right will be double digit year in year.
The next big return comes from pre-paying the fees. Paying monthly so that the capital can sit earning 3% is obviously mad if you can negotiate a 5,10 or 15% fee reduction by paying a year upfront.
Thank you all for the input and food for thought. Just to clarify, mum is in the U.K. I know what the threshold is for when social care cuts in again, about £24k allowed.
She has to be in a care home equipped for dementia sufferers with additional safeguards in place, hence the higher costs. She’s in Cornwall, and I know costs vary by location.
She has to be in a care home equipped for dementia sufferers with additional safeguards in place, hence the higher costs. She’s in Cornwall, and I know costs vary by location.
My sympathies to you...especially being remote from your mother. Dementia is a terrible illness.
Nothing to add on the investment side but I would strongly suggest that you research all the rules around self/social funding. The prescription of certain medications, for example, can justify a switch in where funding comes from (as this would signify changing diagnosis). This information will not be forthcoming from healthcare professionals and you have to petition to local authority for a review. They will drag the process out but in the end you'll get there.
My late mother was a career nurse who later shifted to work in continuing care for a local authority. She helped many families and advised friends/friends of friends on the technicalities of the system. It's such a shame seeing life-savings (in most cases family homes) being eroded away by care costs.
Good luck.
Nothing to add on the investment side but I would strongly suggest that you research all the rules around self/social funding. The prescription of certain medications, for example, can justify a switch in where funding comes from (as this would signify changing diagnosis). This information will not be forthcoming from healthcare professionals and you have to petition to local authority for a review. They will drag the process out but in the end you'll get there.
My late mother was a career nurse who later shifted to work in continuing care for a local authority. She helped many families and advised friends/friends of friends on the technicalities of the system. It's such a shame seeing life-savings (in most cases family homes) being eroded away by care costs.
Good luck.
geeman237 said:
Looking for some input on this situation. My mother went into a care home with dementia last year. I have both POA's in place. Following a financial means test by the local council, mum is declared as self funding. I have an offer on her house at the moment. There is no mortgage on the property and we are talking around 190k post sale which will have to go towards her care home fees of around 950 per week. She has no other assets or investments etc, just her state pension.
My questions are, I am assuming this money is not liable to income tax?
Shall I just speak to the bank about any investment options for this money to try and squeeze a bit of interest on it while still having to pay her care home fees monthly?
I am not resident in the UK, I am in the US and have dual citizenship.
Firstly, sorry to hear about your situation. I'm following this thread with interest as I'm in a very similar position. I lost my father in February and my mother is also in a demetia care home. I have both POA for her. I've been told the home will start to cost about £2k per month after a new financial assessment is done post inheritance. She has income of over £1k per month so the savings she has and whatever I get from the parental home (no mortgage) will cover the deficit. I was also wondering about how best to maybe generate some extra income from the house sale to slow down the draw down on her funds. It'll be a while before the house is in a position to sell as it needs a lot of updating and TLC. My questions are, I am assuming this money is not liable to income tax?
Shall I just speak to the bank about any investment options for this money to try and squeeze a bit of interest on it while still having to pay her care home fees monthly?
I am not resident in the UK, I am in the US and have dual citizenship.
Far Cough said:
You should Google the following to see if your mother qualifies. It may extend her nest egg that bit further. Don't want to be a downer but the care fees only go one way.
Funded nursing care
Continuing nursing care
Attendance Allowance
All the best
FNC currently nursing assessed and payable here in the east at £158/weekFunded nursing care
Continuing nursing care
Attendance Allowance
All the best
Not sure on continuing nursing care
Attendance allowance was £86/week
K
DonkeyApple said:
The next big return comes from pre-paying the fees. Paying monthly so that the capital can sit earning 3% is obviously mad if you can negotiate a 5,10 or 15% fee reduction by paying a year upfront.
I know nothing about this topic but I would be wary about that in terms of what if the place goes under? Many of them are privately owned aren’t they? I can imagine it going into administration and you getting back f-all. Unless you can also buy insurance against that risk? (Don’t know)My Mother went in care in December she pays £1270 a week and if she needs 24 hr medical care in the future then it will go up to £1400
She pays for it from her estate my father died last July and she could not live at home because she lived in rural area and kept on having falls and could not look after herself
I arrange for carers to come in twice a day initially for the first 4 months
She suffered a stroke three years ago and has Parkinsons but hardly any dementia so she is aware of what is going on
I have both LPA activated
Please see the link below for info I found it very helpful
https://www.ageuk.org.uk/information-advice/care/p...
I think it is travesty that people work hard all there life and see there savings eaten up
My mother is lucky she can fund her care but i think other people are falling through cracks of society
The goverment does not care about this timebomb
rant over
She pays for it from her estate my father died last July and she could not live at home because she lived in rural area and kept on having falls and could not look after herself
I arrange for carers to come in twice a day initially for the first 4 months
She suffered a stroke three years ago and has Parkinsons but hardly any dementia so she is aware of what is going on
I have both LPA activated
Please see the link below for info I found it very helpful
https://www.ageuk.org.uk/information-advice/care/p...
I think it is travesty that people work hard all there life and see there savings eaten up
My mother is lucky she can fund her care but i think other people are falling through cracks of society
The goverment does not care about this timebomb
rant over
CoolHands said:
£70 grand a year, what could be the solution? After the house proceeds is used up in 3 or 4 years who pays?
In our case and others we know ofThe state will cover £560/week, you top up the rest, if you are unable to , then your loved one is moved to a more affordable care home of the social care choice; your input is limited
I tried to negotiate a better offering, short answer = no.
£70k /yr over here, dreading the long term outcome to be honest.
K
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