Do you have to sell your house to pay for care?
Whether a home is taken into consideration during a financial assessment depends on where the person with dementia is receiving care. If the person is living in a care home, their home may be included.
Currently, if a financial assessment shows your capital is above £23,250, it's likely you will be expected to pay all of your own care costs.
If your capital is under £23,250, you will pay what you can afford from your own income, and the local authority may contribute towards the fees.
Will the person's house always be included in a financial assessment?
If the person is receiving homecare
If the person is receiving care at home, the value of the person’s home is not counted in their financial assessment.
It should not be used when deciding their contribution towards the cost of this type of care.
If the person is in a care home
If the person is living in a care home, but owns their own home, their home may be included in the financial assessment.
When a house won't be taken into account
There are some situations where your home will not be taken into account, even when paying for care home costs. This is when one of the following people also lives in the property, and will continue to live there after the person has moved into a care home:
- a husband, wife, civil partner or partner
- a close relative over the age of 60
- a dependent child
- a relative who is disabled or incapacitated.
The person’s house might also be the permanent home of someone who has been caring for them, such as a friend.
For as long as the carer is living there, the local authority has discretion to decide whether or not to include the value of the home in the assessment. This is more likely to apply in cases where the carer has given up their own home to care for the person with dementia, but it is not mandatory.
If you do have to sell the person's home
The value of the person’s home should not be taken into account for the first 12 weeks of them living in the care home.
This is called the ‘12-week property disregard’. This may mean that, during this time, the local authority will pay or contribute towards the fees.
The property disregard will end if the property sells before the end of the 12-week period.
To benefit from the full 12-week property disregard, let the local authority know before you become a permanent resident.
This grace period can enable the family to arrange to sell the home, or speak to the local authority about other options.
Alternatives to selling the person's home
Deferred payment agreements (DPAs)
If the home is not sold after 12 weeks, the local authority may be able to enter into a deferred payment agreement (DPA) with the person. If the person no longer has mental capacity to decide, a Lasting power of attorney (LPA) or Deputy can enter on their behalf if it’s in the person’s best interests.
In this arrangement, the local authority pays the person’s care home fees for them. Then, when the person sells their home, they must repay the local authority the cost of the care home fees.
DPAs allow the person to ‘defer’ paying the costs of a care home if they’re not able to sell their home immediately. For instance, this can be used if:
- the person’s professional carer needs to continue living there
- the person lives in a supported living environment, such as sheltered care or extra care housing.
All local authorities must offer a DPA scheme. However, they can refuse to enter into an agreement with people in certain circumstances.
For example, this can happen if the value of their home isn’t high enough to cover the loan. The local authority may charge a fee to set up the DPA, and they may also charge interest on the loan.
DPAs are a complicated financial transaction. The local authority should give the person the advice and support they need before entering into an agreement with them.
Care home costs in England
Learn more about care home fees and when you might have to pay them.
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