So you have worked hard all your life. You have paid your mortgage and finally, you own your property outright. In your later years, your health starts to fail and your need for long term care has arisen. Many people feel that their only option at this stage is to use their only asset which is their home.
However, it is worth looking closely at how property is treated in the assessment of paying for care. Where an elderly person has a spouse or partner still living in the property or if that home is the main residence for an elderly relative over the age of 60 the value of the property will not be taken into account.
If the individual has a dependant who is under the age of 16 living in the property the value will also be ignored. In some other instances the Local Authority may have the discretion to use the perhaps where someone has given up their own home to move in with the elderly person in order to provide life in care.
For a single person living alone the local authority will disregard the value of the property for a period of 12 weeks following their admission to a residential care home. This is known as the 12-week property disregard. This would only apply however if the individual had assets below the upper means test limit of $23,250 without the inclusion of the property value. Those that fail the means test would have to pay for their own care from day one.
At the end of a12-week property disregard, the local authority would bring the value of the home back into the equation when doing the financial assessment. Some local authorities may at this stage be able to provide funding in the form of a deferred payment scheme. This is essentially a loan for the cost of your care that is secured as a charge on your property and only becomes payable once the property is sold either before of just after death. The main benefit of this would be that the loan is interest free until 56 following the death of the individual.
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