Government Proposal to Secure Long Term Care Fees on Your Home

The government has just announced a new proposal to offer homeowners local authority loans to fund the cost of long term care for the elderly. At present, if you have assets exceeding the upper threshold of 23,250 which includes your home you are required to fund the cost of your care yourself. The cost of the home is disregarded however if it will remain the home of a spouse or partner or a relative over the age of 60, an incapacitated relative still lives in it or a child under 16 still lives there and the person needing care is responsible for maintaining them.

If you need to pay for care at present the options for funding may be to sell your home to release the capital, you may consider letting the property out which would generate an income to help with the cost of care. The new proposal by the government is to offer loans which will be secured on your home and would only be repayable on death. This will effectively remove the stress of needing to sell the home straight away. This option will work in a similar way to equity release. They are going to charge interest but at this stage the level of interest is unknown.

Some local authorities run in their localities. These schemes are a loan from the local authority to cover the cost of care and the debt is secured on the home and repaid on death or the prior sale of the property. These schemes have the added benefit of being interest-free until 56 days following death.

Although the proposal of this loan scheme will offer reassurance to the individual or their family that the home will not have to be sold schemes are already in existence that offers similar facilities. This proposal will not cap the costs of care for the individual and in many cases, if you want to ensure the money does not run out, consideration should be given to a long term care plan.