‘DEMENTIA TAX’ THE WAY FORWARD?

 

Edward Jacobs

Solicitor, Wills, Trusts, Probate Department

June 2017 Newsletter

Receiving good care matters to us all, at any age, but is all the more salient as we get older and as many of us move into our 9th decade (and beyond) it is something we will all need to consider carefully.

Every year around 135,000 people are admitted into care and it was against this backdrop that in May 2017, a forward plan was submitted by the current government.

 

1.         Anyone with Assets

Currently if one has anything above £23,250 in assets one must privately fund their own care. The average annual costs for residential care is £29,720 a year, so assets can quickly dwindle if it is needed for a long period of time.

The Conservative manifesto pledged to replace this with a higher threshold of £100,000 and homeowners would not be required to sell their home during their lifetime any sale being ‘deferred’ until both the care home resident, their partner or other dependent has passed away.

 

2.         So what is The Downside?

It is not as generous as it appears for a variety of reasons:

The proposals are not directly comparable as a variety of special exemptions may disappear. At present, there are a number of rules which allow a person to ‘disregard’ their home from any assets they own, including a situation where a spouse, civil partner, partner, close relative who has a disability, or close relative who is over 60, lives at the property.

A ‘Care cap’ of £72,000 over a person’s lifetime was due to come into effect from April 2016 but was delayed until April 2020. The new proposals represent a ‘floor’, rather than a cap which means anyone with more than £172,000 in assets would possibly be worse off than they would have been had the original cap been introduced. With the average UK house price £216,000 in March 2017, this potentially leaves the ‘average’ homeowner in the UK worse off than before.

 

3.         What Has Happened Since?

There was major backlash to the proposals and the government announced there would be a cap on care costs, although no amount disclosed.

 

4.         What Next?

Evidently, social care costs will always represent something of lottery as every person’s needs are different in the latter stages of their life. Some people will require a significant degree of medical attention, others requiring asolutely none at all.

 

Regrettably long-term conditions such as dementia face much higher costs then others and it is therefore

something as a team we will continue to monitor with great interest. With the June 8 election outcome, it will be interesting to see if this issue remains on the agenda at all.

For advice on this or any other care cost issue, please contact me on 01284 763333 or by email ej@gross.co.uk


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