A row of houses

Selling a home to pay for care: Is it always necessary?

Some people have to sell their home to help pay for their care, but there are many situations where people do not have to do this.

‘My aunt has dementia and may need to move into a care home soon. Will she need to sell her home to pay for her care?’ 

Your aunt won’t necessarily have to sell her home to pay for her care – it depends on her circumstances. 

Her local authority will assess her finances to see how much of her care fees she must pay herself. There are situations where her property wouldn’t be included in this financial assessment. Even if it is, there might be alternatives to selling her home. 

Care at home 

While your aunt has a care package at home that meets her needs, this home will not be included in her local authority’s financial assessment.

Many people with dementia live well at home for many years, adjusting their care package as their needs change. 

If your aunt needs to move into residential care, her local authority must ignore her home in its financial assessment when particular people also live there. 

‘Qualifying’ people 

If your aunt needs to move into residential care, her local authority must ignore her home in its financial assessment when particular people also live there. 

This is called a ‘mandatory property disregard’ and it applies while a ‘qualifying person’ lives in your aunt’s home.

A ‘qualifying person’ could be a partner or spouse, or an estranged or divorced partner if they’re a lone parent. It also includes certain relatives who are disabled or aged 60-plus. If your aunt has children aged under 18 who live there, it applies to them too. 

More leeway 

If there isn’t a compulsory reason for the local authority to ignore your aunt’s home in its financial assessment, it may still use its discretion to not include it. 

For example, it might do this if someone has given up their own home to move in with your aunt and care for her. This isn’t guaranteed – it’s the local authority’s choice over whether it provides this leeway. 

Rent or defer 

If your aunt’s home is included in her local authority’s financial assessment, she may need to sell it to pay for her care. However, there might be ways to avoid or delay this. 

Some people can rent out their property and use the rental income to cover care fees. This wouldn’t suit everybody, but it could work for some.

For legal advice, Solicitors for the Elderly could help find a solicitor near you with relevant experience.

Others make an agreement with the local authority to ‘defer’ or delay paying for care. Costs usually need to be paid back within certain timeframes, with fees and interest added. For some people, this means they don’t have to sell the home, at first or at all. 

You can complain to the local authority if you disagree with it including a person’s home in a financial assessment for care costs. 

For legal advice, Solicitors for the Elderly could help find a solicitor near you with relevant experience. 

Legal and financial

Financial and legal issues for people with dementia and their carers, including assessments and paying for care.

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My mum is 90 this year she has Alzheimer’s, which seems to be rapidly declining, she is fit and healthy apart from this.
If she were to need to go into a home, would she have to sell her house as use all her money to fund this.
My brother and I have Power of attorney should we be doing anything now before my mum get’s to bad ?

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Hello Sarah, thanks for getting in touch.

If there was a partner remaining living in the property then a mandatory property disregard would apply and the value of the property wouldn’t be included in the financial assessment. A mandatory disregard would also apply if there was a close relative remaining living in the property who is incapacitated or aged 60+. The relative/partner usually needs to have been living in the property as their main home, prior to the person going into residential care.

However, assuming none of these mandatory disregard reasons apply, then it’s likely that your mum’s property would be taken into account in the financial assessment. She would be likely to be regarded as a self-funder as she would have capital over £23,250. This means that she would need to pay her own care fees. However, she shouldn’t need to sell her property in her lifetime to pay the fees, if she doesn’t wish to. The Care Act 2014 is clear on this.

For the first 12 weeks after she moves into the care home, the property should be disregarded in the financial assessment if she doesn’t have other capital/savings over £23,250.

If she doesn’t have other capital/savings aside from her house, or the other capital drops to below £23,250 at some point, then she could request a Deferred Payment Agreement (DPA) with the local authority. The DPA should be set up in the 12-week initial property disregard period if she’s eligible for this.

A DPA would mean that the local authority would pay the care home fees owed and place a legal charge on the property. When the property is later sold (which could be while your mum is alive or just after she passes away, if preferred) then the debt to the local authority is repaid, along with interest and administrative charges.

To set up a DPA for someone who lacks the mental capacity to request one themselves, you would need to either be an attorney under a Lasting Power of Attorney (or Deputy) for Property and Financial Affairs.

You mentioned that you have Power of Attorney already, so assuming this is a Lasting one for Property and Financial Affairs, that should allow you to set up a DPA (or sell the house if you decide to do that anyway) so long as you are acting in your mum’s best interests.

If your mum still has the mental capacity to make decisions on her property and finances, any decisions should be hers rather than yours and even if she lacks such capacity you should involve her as much as possible. It would be a good idea if you can to discuss with her now what she would like to happen with her house if she goes into care and what sort of care she would like. There may be other things that she can do to plan ahead such as making or reviewing her will and she and you may find our Planning ahead booklet helpful: https://www.alzheimers.org.uk/blog/4-ways-plan-ahead-future-when-living…

The Money Advice Service has useful information about the different options for self-funders: https://www.moneyadviceservice.org.uk/en/articles/self-funding-your-lon…

For example, some people choose to rent out their property while the DPA is in place, to contribute to their care fees, reducing the deferred amount. We aren’t able to offer financial advice and you may wish to seek independent financial advice to discuss the options available to your mum.

If your mum’s needs at some point become very complex and could be regarded as a ‘primary health need’, then she should be considered for NHS Continuing Healthcare (CHC). If assessed as eligible, a package of care is arranged that is fully funded by the NHS. We have information about CHC funding on our website: https://www.alzheimers.org.uk/get-support/help-dementia-care/nhs-contin…

Please call our Dementia Connect support line on 0333 150 3456 if you and your brother would like further dementia information, advice and support. Our advisers are available seven days a week: https://www.alzheimers.org.uk/dementia-connect-support-line

We hope this is helpful.

Alzheimer's Society Knowledge team

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Myself and my mum have POA for my Nan. We are having to put her into full time care due to her dementia. We are going to have to sell the house to fund it. Do I need to tell my uncle (nans son) that I am selling the house? He doesn’t have POA but he’s a a trustee in her will. He’s had nothing to do with her for over 10 years abs is t even aware of her condition.

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Hi there, John. Thanks for getting in touch.

If you have a Lasting Power of Attorney (LPA) for property and finance for your Nan, that will normally give you and any other attorneys the power to sell her house if she lacks mental capacity to sell it herself. Whoever is an executor and/or trustee under her Will won’t have any power over her property until she dies (when your power as attorneys will stop). So while your Nan is alive, the power to sell her house rests with you as attorneys.

It can, however, be a good idea for attorneys and executors/trustees to liaise with one another because there may be actions taken during the lifetime of the person that impact on what they own after they die, and it can also be useful for financial attorneys to know what the Will says.

Any decisions you take as your Nan’s attorneys (including selling the house) must be made in her best interests. Under the Mental Capacity Act, that means consulting, if possible, with those close to the person - including anyone “interested in their welfare”- about what their best interests are. As a general rule, the more people who are involved in a best interests decision, the less likelihood of there being any arguments about it later.

You should also check the wording of the LPA to see if it says anything about the house or consulting the uncle or anyone else.

If your Nan still has capacity to decide about selling the house and/or whether she moves into residential care then those are decisions she should be allowed to make. If she does not then you should still involve her in any decision-making as far as possible.

You may find our Lasting power of attorney factsheet helpful for more detail - download it here: https://www.alzheimers.org.uk/sites/default/files/migrate/downloads/fac…

It’s also worth knowing that your Nan shouldn’t have to sell her property in her lifetime to pay the care home fees, if she doesn’t wish to. The Care Act 2014 is clear on this.

If there was a partner remaining living in the property then a mandatory property disregard would apply and the value of the property wouldn’t be included in the financial assessment. A mandatory disregard would also apply if there was a close relative remaining living in the property who is incapacitated or aged 60+. The relative/partner usually needs to have been living in the property as their main home, prior to the person going into residential care.

However, assuming none of these mandatory disregard reasons apply, your Nan would be likely to be regarded as a self-funder as she would have capital over £23,250. This means that she would need to pay her own care fees.

For the first 12 weeks after she moves into the care home, the property should be disregarded in the financial assessment if she doesn’t have other capital/savings over £23,250.

If she doesn’t have other capital/savings aside from her house, or the other capital drops to below £23,250 at some point, then she could request a Deferred Payment Agreement (DPA) with the local authority. The DPA should be set up in the 12-week initial property disregard period if she’s eligible for this.

A DPA would mean that the local authority would pay the care home fees owed and place a legal charge on the property. When the property is later sold (which could be while your Nan is alive or just after she passes away, if preferred) then the debt to the local authority is repaid, along with interest and administrative charges.

To set up a DPA for someone who lacks the mental capacity to request one themselves, you would need to either be an attorney under a Lasting Power of Attorney (or Deputy) for Property and Financial Affairs. Assuming you are, that should allow you to set up a DPA (or sell the house if you decide to do that anyway) so long as you are acting in your Nan’s best interests. As above, if your Nan still has the mental capacity to make decisions on her property and finances, any decisions should be hers rather than yours and even if she lacks such capacity you should involve her as much as possible.

Our website information on Paying for Care might be useful: https://www.alzheimers.org.uk/get-support/legal-financial/who-pays-care

Age UK’s guide to Paying for Permanent Residential Care would also be worth reading: https://www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs10_…

There is also some basic information about NHS Continuing Healthcare on these pages, which is a package of care arranged and fully funded by the NHS if a person has complex needs and a ‘primary health need’. This may not be relevant to your Nan at the moment, but may be useful in the future.

Please call our Dementia Connect support line on 0333 150 3456 if you and your mum would like further dementia information, advice and support. Our advisers are available seven days a week: https://www.alzheimers.org.uk/dementia-connect-support-line

We hope this is helpful.

Alzheimer's Society Knowledge team

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I have POA on my aunt who has been in a care home for the past 10 years with Alzheimers and other degenerative problems.
She was never married, no civil partner and no children.
For these past10 years she has been self funding via savings, pensions and rental from tenants in her property and therefore has not cost the state any money for this period of care.
Unfortunately her funds will run out in approx. 2 years time and I therefore want to know if I will be compulsorily required to sell the property to fund any further care or is it possible that a local authority would take over. Bearing in mind there will be sitting tenants (over 65 years of age) that may well be made homeless in the process. Thank you for any advice you can give me.

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Hello Alan, thanks for getting in touch.

Your aunt will be a self-funder until her total capital including the value in her previous main home, falls below £23.250 at which point the local authority would be likely to start contributing, along with continued contributions from her.

However, when your aunt’s savings/capital (other than her previous main home) falls below £23,250, and as you hold Power Of Attorney for Property and Financial Affairs, you will be able to request a Deferred Payment Agreement (DPA) from the local authority.

This is when the local authority pays the care home fees that the person owes (as well as the person often contributing from their income) and puts a legal charge on the property until such a time that the property is sold and the debt repaid, including interest and administration fees. The sale of the property could be delayed until your aunt’s death if you wish.

A deferred payment agreement usually allows for a person to rent out their property so this should enable the tenants to remain in the property. Your aunt could continue to use the money from the rent towards her care costs, which should reduce the amount that is deferred.

If for any reason a DPA wasn’t agreed, then it’s possible that the local authority could discuss the sale of the property being required for care costs if there wasn’t another means to pay. As the tenants are older and if they were going to suffer hardship, the local authority could be asked to exercise their discretion but we aren’t aware of any legal requirement for them to do so.

However, as mentioned above, hopefully this situation won’t arise as a Deferred Payment Agreement should enable the tenants to remain in the property (until the property is sold in the future).

We hope this is useful.

Alzheimer's Society Knowledge Officer

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Hello There
Mum has recently passed away after being in care suffering with Dementia. We were self funding for the first few years, however once her savings had gone the local authority put a legal charge on her property. We now have it on the market to pay the outstanding charge, my question is are we allowed to keep a minimum amount ie 23,250 once the house is sold even if this means all the care charge will not be paid off?

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Hello Sue,

We are really sorry to hear about your mum's recent passing. This must be a very difficult time for you. Please know that you can call our Dementia Connect support line on 0333 150 3456 to talk with one of our advisers. They can provide you with emotional support, should you need it. They're available seven days a week: https://www.alzheimers.org.uk/dementia-connect-support-line

From what you’ve said, it sounds like a Deferred Payment Agreement (DPA) was set up for your mum. This is where the local authority pay the care home fees that the person owes (as well as the person usually contributing from their income) and put a legal charge on the property until such a time that the property is sold and the debt repaid, including interest and administration fees.

When the person has deferred around 70 per cent of the value of their property, the local authority should discuss with the person (or their Power of Attorney or Deputy for Property and Financial decisions) whether a DPA continues to be the best way for the person to pay their care home fees and whether they may be entitled to any means-tested support from the local authority.

The Care Act 2014 statutory guidance is clear that the maximum amount that can be deferred is the value of the property, minus 10 per cent, minus £14,250.

However, while the local authority isn’t allowed to defer more than this amount, this doesn’t prevent them from recovering the full debt when the property is later sold, so unfortunately you aren’t guaranteed to be left with a certain amount from the sale of the property. For example, interest to the local authority may still accrue even when the maximum deferral amount has been reached.

Sometimes local authorities end a DPA when the person’s overall capital falls below £23,250 and they become eligible for some local authority funding towards their care home fees. The person continues to pay fees from their income.

In the event that the cost of the care home fees was more than the amount recovered through your mum’s property sale, then the local authority does have a power to recover the debt but they aren’t required to and can choose not to recover it. The Care Act is clear that the local authority should act reasonably at all times when recovering debts and if repayment is required, the repayments should be affordable.

We hope this is helpful for now. Remember to ring the support line if you need someone to talk to.

Alzheimer's Society Knowledge Officer

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Nana passed away recently from covid after being in a (dementia) carehome and has left an outstanding bill of £111k to pay for her care, myself the grandson (POA) have been given 56 days to pay the bill. As she had no savings, her property which she owned was used as deferred payment. My question is, as the house was not technically left to her next of kin (son), my dad, do I also have to pay the inheritance tax on top of the outstanding bill, after selling her house?Sadly its over the £325,000 threshold.

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Hello Michael.

Thank you for getting in touch. We are very sorry to learn of your recent loss. Please be aware we cannot give legal or financial or advice, but we can give you a few pointers.

It sounds like the death of your Nana has triggered payment to the Council of the deferred payment amount plus accrued interest. This would usually be like a mortgage on the property so would be deducted in calculating the value of your Nana’s estate for inheritance tax purposes.

Payment to the Council would be the responsibility of her executor (if she left a will) or administrator (if she didn’t). That might be you - it hasn't been mentioned in your message - but if so you would be responsible as executor or administrator of the estate, not personally. Family members might decide to pay the deferred payment amount from sources outside the estate to avoid the house having to be sold (and they can do that if they want) but it is the estate that is responsible.

Any Power of Attorney (POA) you have will no longer be effective now that your Nana has passed away. It is her executor/administrator who takes over.

Payment of inheritance tax is separate and is also something that your Nana’s executor or administrator is responsible for (though as we’ve said you’d normally deduct the deferred payment amount in calculating what inheritance tax is payable on). It’s unclear from your comment who her house was left to, but if it was to children or grandchildren of your Nana, then the additional “Residence Nil Rate Band” should be available on top of the ordinary nil rate band of £325,000.

The following links have more information:

- https://www.moneyadviceservice.org.uk/en/articles/a-guide-to-inheritanc…

- https://www.gov.uk/guidance/work-out-what-part-of-your-estate-pays-inhe…

We hope this helps for now. Please do call our dementia advisers if you're seeking any emotional support during this tough time: 0333 150 3456

Alzheimer's Society Knowledge Officer

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Hi my mum passed away last April we had to do a deferred payment on her house, the council has only got intouch to tell us we need to pay £50.000, this means we now need to make my brother and myself basically homeless, I find it so unfair, as my mother worked all her life, only to end up with dementia, she ended up a self funded, while other people in the home on benefits get to keep their homes and everything its making me sick with worry.

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My brother may have to into a care home and although I don't live with him, I own 40% of the property and have done so for over 20 years. The house was left to us both by our late Mother.
Could you tell how I stand if he did actually have to go into a home.

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My father in law resides in England and is currently in hospital. He has now been deemed to lack capacity and they advise he needs to go into a nursing home.
He owns his own home and has a pension and some savings.
We do not have power of attorney and are currently unable to go diwn to England due to covid.
How much of his assets are the local authority permitted to seize to fund his care

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Hello Gillian,

Thanks for getting in touch.

If your father in law has a partner who would be remaining in the property, then the value of his main home would not be included in the financial assessment for permanent residential care. This is called a Mandatory Property Disregard. This would also apply if there was a family member who is over-60 or assessed as incapacitated who would be remaining living in the property.

If the above mandatory disregard doesn’t apply, then your father in law is very likely to have over £23,250 in capital and savings as he owns property. He would therefore be a self funder for permanent residential/nursing care.

If the value of his remaining capital fell below £23,250, his local authority should usually start contributing towards his care home charges.

A person with assets between £14250 and £23250 will pay from their income, plus a means-tested contribution from their assets (calculated as £1 per week for every £250 of capital between the capital limits, called ‘tariff income’).

If the value of his capital/savings fell below £14,250 then he would not be expected to contribute from his savings/capital at all. The local authority would contribute to the costs and he would continue to contribute from his income.

A person who’s receiving some financial support from the local authority with residential care charges must be left with a minimum weekly Personal Expenses Allowance (PEA) of £24.90 per week after any charge towards their care.

If your father in law doesn’t wish to sell his property to pay for the care/nursing home charges at the moment he can apply for a Deferred Payment Agreement (DPA) with the local authority. This would mean that the local authority pays the care home charges and put a ‘legal charge’ on the property. When the property is later sold, the local authority are then repaid the care home fees in full including some interest and administrative charges. This could be after your father in law’s death, if he wishes.

If your father in law requires a nursing home rather than residential care due to his needs, he should be eligible for the NHS funded nursing care contribution of £183.92 weekly. This isn’t means tested and is designed to cover the extra costs of nursing care. The remainder of the fees would be paid via the usual means testing discussed above.

If your father in law is assessed as having a primary health need then he may be eligible for NHS Continuing Health Care funding which is a package of care fully funded by the NHS. More about this: https://www.alzheimers.org.uk/get-support/help-dementia-care/nhs-contin…

You’ve mentioned that you don’t have Power of Attorney. If no one has Power of Attorney for your father in law for Property and Financial Affairs and he has lost the mental capacity to make financial decisions, it’s likely to be necessary for someone to apply to the Court of Protection to become a Deputy. You can read more about this on our website: https://www.alzheimers.org.uk/get-support/legal-financial/deputy-dement…

The above information is general information rather than legal or financial advice. If you want to talk the situation through, you may wish to contact our Dementia Connect support line on 0333 150 3456. Opening hours are listed at https://www.alzheimers.org.uk/dementia-connect-support-line Alternatively, we would recommend seeking legal advice.

We hope this is helpful.

Alzheimer's Society Knowledge Officer

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Hi,
My sister and I are both power of attorney on my grans account and my gran is currently in a dementia home and has been for the last 5 years. My gran had one child who passed away (this was my mother). My gran is currently on a deferred payment with the council to pay for her care fees and she does not have savings only the home. If my sister were to buy her home and we paid back what we owed to the council, would the home still continue to take money off then sale of the home? How much savings in Wales can the care home take and leave you with? Thank you

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Hi Shannon, thanks for getting in touch.

Once your gran’s property is sold (whether to your sister or someone else), the local authority would expect the full amount owing to be repaid and the Deferred Payment Agreement (DPA) would be terminated. The local authority would then be required to relinquish the charge on the property.

The Social Services and Wellbeing (Wales) Act 2014 Code of Practice (Part 4 and 5-Charging and Financial Assessment) says the following about DPAs:

'A deferred payment agreement can be terminated in three ways:

a) at any time by the person by repaying the outstanding care costs (including any outstanding interest and administrative costs) due in full (this can happen during a person’s lifetime or when the agreement is terminated through the agreement holder’s death);

(b) when the property is sold and the authority is repaid;

or (c) when the person dies and the amount is repaid to the local authority from their estate.

12.2 On termination, the full required amount deferred due must be paid to the local authority.

12.3 If a person decides to sell their property, they should notify the local authority during the sale process. They will be required to pay the amount due to the local authority in full from the proceeds of the sale, and the local authority will be required to relinquish the charge on their property.'

If your sister wanted to fully re-pay the debt owing to the local authority prior to the sale of the property, then the DPA would be terminated at the point that she paid in full including interest. And the local authority would be required to remove the charge on the property.

Here’s what the Code of Practice says regarding this situation:

‘A person may decide to repay the amount due to the local authority from another source, or a third party may elect to repay the amount due on behalf of the person. In either case, the local authority should be notified of the person’s/the third party’s intention in writing, and the local authority must relinquish the charge on the property on receipt of the full amount due.’

If your sister wasn’t able to repay/fully repay the local authority before she bought the property from your gran, then the DPA would remain and your gran would be required to repay the debt once the sale had taken place.

As your sister is an attorney under a Lasting Power of Attorney for your gran, it’s worth noting that there are likely to be some extra steps involved in the sale/purchase.

If your gran doesn’t have mental capacity around financial decisions then The Court of Protection need to be satisfied that the sale to your sister is in your gran’s best interests and they will require an application to be made to the Court.

You can read more about best interests and the process for applying to the Court in the current government guidance for Property and Finance Attorneys here: https://www.gov.uk/government/publications/how-to-be-an-attorney/how-to… (The information at 5.7 and 5.8 is particularly relevant.)

In Wales, if someone has assets and/or savings worth £50,000 or more, they are expected to meet the full cost of their residential care. So if your sister purchased the property from your gran, and your gran would then have savings over £50,000, your gran would continue to fund her future care fully from the savings until they fell below £50,000.

At this point, your gran would no longer be required to contribute from her savings. However, she would contribute from her income, such as pensions and certain benefits. She would be required to be left with a certain amount each week from her income.

We have information on our website about Charging for Residential Care in Wales here: https://www.alzheimers.org.uk/get-support/legal-financial/who-pays-care…

Age UK has a factsheet on Paying for a Permanent Care Home placement that you may find useful: https://www.ageuk.org.uk/globalassets/age-cymru/documents/information-g…

At some point, depending on her needs, your gran may be eligible for an NHS-funded nursing care contribution or be eligible for NHS Continuing Health Care Funding. You can read more about both of these here: https://www.alzheimers.org.uk/get-support/legal-financial/nursing-care-…

The above information is general guidance rather than legal or financial advice. If you want to talk the situation through, you may wish to contact our Dementia Connect support line on 0333 150 3456. Please take note of the seasonal opening hours: https://www.alzheimers.org.uk/dementia-connect-support-line We also have Welsh-speaking support available on 03300 947 400. Alternatively, we would recommend seeking legal advice.

We hope this helps, Shannon.

Alzheimer's Society Knowledge Officer

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My parents own their home outright as tenants in common. My mum has dementia and my dad wants to sell his share of the house to my brother so that he and his family can move in an help with care. He is under 60 and has no disabilities. Should my mum go into care, she will still own 50% of the house, along with my brother. Will my brother be forced to sell the home? If my mother dies and my brother then decides to sell the home years later, would be have to pay back the care fees then?

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Hello Sally, thanks for getting in touch.

This is a complex area. Please note that the following information is general guidance, rather than legal or financial advice.

Only the capital, savings and income that belong to your mum, as the person needing residential care, should be considered in any financial assessment.

If she has savings or capital (including the property that is her main home) over £23,250 then she would be regarded as a self funder.

As the likely value of half the home would be over £23,250, your mum would be likely to be a self-funder for care home fees, until her capital and savings fall below this amount at which point the local authority should start contributing as well.

In cases of a joint account or shared ownership of property or other assets, it would be assumed that she owns a 50 per cent share, unless there is evidence showing otherwise.

As your mum would not be selling her half of the house at the moment to fund her care home fees, she can apply for a Deferred Payment Arrangement (DPA) through the local authority. This basically means that the local authority would help to pay the care home charges, until such a time that your mum sells her half of the house. It’s worth noting that your mum would still need to contribute to the cost of care from her income while she’s in the care home.

As your mum owns 50 per cent of the property, which is clearly defined by the tenant in common arrangement, your dad should be able to sell his half to your brother if he wishes and your brother should not have to sell the home if your mum dies.

However when the property is later sold, and assuming there is a DPA set up on your mum’s half, this will then need repaying to the local authority. The Care and Support Act 2014 statutory guidance makes it clear regarding DPA’s that the payment for care is deferred rather than written off and that the costs of provision of care and support will have to be repaid by the individual (or a third party on their behalf) at a later date.

You may wish to read more about Paying for Care and Support in England on our website: https://www.alzheimers.org.uk/get-support/legal-financial/who-pays-care

Age UK also has a Property and Paying for Residential Care factsheet: https://www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs38_…

If you want to talk the situation through, you may wish to contact our Dementia Connect support line on 0333 150 3456, or seek legal advice.

We hope this helps.

Alzheimer's Society Knowledge Officer

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Hi my mother in law has recently been diagnosed with dementia, she has singed the house over to her two son's but she is really worried that it will be taken off them or the money if they decide to sell it, could you possibly give me some information on this matter please it would be very helpful

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Hello Shirley. Thank you for your message.

The Local Authority may question this if a financial assessment for care took place, now or in the future. If the Local Authority believe a deprivation of assets has occurred, they can take the matter to court to claim back the money from any benefactor and can assess the person as still having the asset they gave away.

However, whether it is deemed a deprivation of assets depends on the individual circumstances and someone having a diagnosis of dementia does not necessarily mean a deprivation has occurred or they cannot use their money as they wish.

When considering deprivation of assets, the Local Authority will look at the motivation, the timing and foreseeability of needing care at the time the transaction/gift was made.

For more information please see Annex E: Deprivation of assets of the Care and Support Statutory Guidance: https://www.gov.uk/government/publications/care-act-statutory-guidance/…

We hope this is useful.

Alzheimer's Society Knowledge Officer

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If the house is split 3 ways by a trust would the house need to be sold to pay for the care of one of the 3? The other two do not live in the house.

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Hi Jonathan, thanks for your comment.

Unless there is a reason for the Local Authority to disregard the property (for example; someone who is over 60 or someone who is ‘incapacitated’ has been continuously living there) the share value of the person entering residential care can be included in their financial assessment. This means they are assessed as having that money available to use for care fees.

If their share, along with any other capital, takes them over £23,250 they would be classed as a self-funder and would usually get no contribution from the Local Authority with their fees.

If they didn’t then sell the house and couldn’t access their money which was tied up in the house, this would pose a problem regarding how their care fees (which would be their responsibility as a self-funder) were going to be paid.

There are a few things to bear in mind when considering jointly held property;

1. Normally to work out the share amount of any jointly owned asset, its value would just be split by the amount of owners. However it can work differently with property, it is the ‘beneficial interest’ of each owner that should be taken into account. If you jointly own property, it is your individual beneficial interest in the property that should be taken into account and valued in the financial assessment. The amount taken into account will need to reflect the current market value, which is the price a willing buyer would pay to a willing seller for that share. In some areas and for some properties the value of a part share may be very little, even nil, whereas in other places there is demand. If someone’s share is deemed to be above £23.250 they will be classed as a self-funder and expected to pay their own care fees for residential care. You can find out more information regarding the process for determining market value for property shares in the Care and Support Statutory Guidance Annex B paragraphs 14-18:
https://www.gov.uk/government/publications/care-act-statutory-guidance/…

2. The value of a share might be affected if it can’t be realised i.e. if the whole property can’t be sold. If the other owners refuse to sell and there is no other way the person in care can pay their fees, they may look to the court to enforce a sale. If this was to happen the court would consider the reason the trusts were set up and whether that purpose still exists. If it does that may prevent a sale and affect the value of a part share. Age UK cover the considerations of the court if this were to happen on page 12 of their Property and Paying for Residential Care' factsheet: https://www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs38_…

There are a lot of variables in this area, everyone’s circumstances are different and so are local market values. Local Authorities can also always exercise discretion. The information above is general guidance only, not legal advice. You may wish to ask for information and advice from your local authority and/or seek independent legal advice.

We hope this is helpful,

Alzheimer's Society knowledge team

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My sister (58) has lived with my dad for more than 20 years and has cared for him for the past few years. His dementia has worsened and he is becoming more aggressive. If he needs to be cared for in a home, will his house be sold to pay for it? Will she be made homeless?

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Hi there Jo,

Thanks for getting in touch.

Your dad's home will not be taken into account if one of the following people also lives in the property, and will continue to live there after he has moved into a care home:

• husband, wife or partner
• close relative over the age of 60
• dependent child
• relative who is disabled or incapacitated.

A mandatory property disregard should be applied in these cases, his property ignored in his financial assessment and not expected to be used towards his care fees. If your sister is under 60 and not ‘incapacitated’ then a mandatory disregard would not be applied.

However, as it says in our 'Paying for Care and Support in England' factsheet (https://www.alzheimers.org.uk/sites/default/files/2019-05/532lp-paying-…) -

“If your house is also the permanent home of someone who has been caring for you, for as long as they are living there, your Local Authority has discretion to decide whether or not to include the value of the home in the assessment. This applies especially in cases where the carer has given up their own home to care for you.”

Therefore the Local Authority may choose to use their discretion and allow your sister to stay, ‘ignoring’ the home in his financial assessment. They don’t have to do this as they would with a mandatory disregard, but they may choose to. There is more information on both these types of property disregard in Annex B of the Care and Support Statutory guidance (https://www.gov.uk/government/publications/care-act-statutory-guidance/…).

If permanent care may be needed soon (before your sister turns 60) she may wish to speak to the Local Authority about her situation. They may be able to offer some reassurance how they would treat this - essentially whether they are likely to use their discretion or not.

If they didn’t use their discretion they should be able to signpost to their housing department so your sister could look at local housing options. Shelter also have Housing Advisers who may be able to help if she was facing homelessness (https://england.shelter.org.uk/get_help). Hopefully this won’t be necessary, but it’s good to know what is available just in case.

We hope this is useful, Jo.

Alzheimer's Society Knowledge Officer

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My cousin lived for many years in an alztheimers care home and died in March. Towards the end of his life was completely cognitively incapacitated. During that time he owned a house which was sold 3 months before he died and the proceeds minus 40,000 put into a bank account in his name . I am wondering under what circumstances his house could be sold from under him

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Hello Les,

If someone no longer has mental capacity to make the decision to sell their property, another person could only do it if they had the legal power to do so. For example, someone who was appointed a Lasting Power of Attorney (Property and Finance) or someone who applied for deputyship.

If no LPA’s or deputies are involved, the Local Authority may themselves apply for permission from the court so they can sell property to fund someone’s care fees.

All decisions made on a person’s behalf would have to considered in their ‘best interests’ to comply with the Mental Capacity Act.

Here are some pages with more information -

> Lasting Powers of Attorney and deputies: https://www.alzheimers.org.uk/get-support/legal-and-financial/lasting-p…

> Mental Capacity Act: https://www.alzheimers.org.uk/get-support/legal-financial/mental-capaci…

We hope this is useful.

Alzheimer's Society Knowledge Officer

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I'm the sole owner of my house ..if I died and my husband had to go into care because of dementia would my house have to be sold to pay his care home fees

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Hello Sheila,
Thanks for getting in touch.
It may beneficial to seek legal advice - however, in the meantime, we can provide you with some general information:
Regardless of who is the owner, the house would be disregarded if your husband entered permanent care ('disregarded' meaning ignored and not included in the financial assessment for his care fees) as you are still living in it as your main home. This should be the case for as long as you are alive.
If your husband has no legal interest (i.e. his name isn’t on the property deeds) and no beneficial interest (i.e. he hasn’t significantly contributed to the initial or ongoing costs of the house) your house would usually be disregarded on that basis too. Only your husband's own capital and income should be included in the financial assessment for his care.
If you died before your husband, the property would be subject to your Will. If you have left your property to him in your Will, then the house could then be sold and the money used for care fees as it would then be his capital. If you left the property to someone or something else, it should go to them instead. It shouldn’t automatically transfer to your husband if you haven’t left it to him in your Will and he isn’t a joint tenant on the deeds.
We hope this is useful.
Alzheimer's Society Knowledge Officer

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