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Yvonne Goodwin: Where clients get caught out with care home funding

Continuing the theme of later life care my previous columns have centred on, it seems not a week goes by without some other great revelation hitting me in the face.

This time, it is the legislation surrounding care home contracts and top-up fees. Who knew so many care homes attempt to get friends and family to commit to paying the top-up fees that kick in once a resident reaches the monetary limit where the local authority steps in? Also, that the care homes and local authority agree a rate lower than the self-funding rate?

If a client has a relative that is a self-funder but will reach the threshold where the local authority is financially involved, it is important they know the following information when starting on the arduous search for that perfect place:

  • The social services department of their local authority should offer them a choice of care homes that will meet their needs and accept residents funded by a local authority.
  • If there are no care home places available to meet their assessed needs at the council’s standard rate, the local authority should pay the extra for them to move to a care home that meets all of their assessed needs.

For example, if they need to be in a particular area to be near to family but the only homes available in that area are more expensive, the local authority where they have been assessed should pay the additional cost. It is essential these needs are recorded up front in the relative’s care plan, so clients can prove the care homes the council is offering do not meet them.

Yvonne Goodwin: Advisers need to be ready for a client’s health failing

On 16 November 2018, the Competition and Markets Authority published guidance for UK care home providers spelling out their responsibilities in connection with consumer law and stamping out unfair contract terms.

Similar to the lines we follow in financial services, there should be certain key features available to view before signing a contract. All advisers who work in this area should familiarise themselves with the updated information here and make sure clients faced with the prospect of placing their loved ones into a care home know they have a right to read the proposed contract before committing to it.

The law around top-up fees and when they might be illegal are all in the document too.

Advise clients not to sign up to a personal contract without the local authority being involved. They may end up making a commitment that could go on for years or fighting a battle with the care home when they should be focusing on the welfare of their relative in their final years.

The average stay in a care home is apparently 400 days. However, our clients and their parents are not average, and it is important to remember that when committing funding in this area. Also, if this is the experience now, who will be paying for our clients’ own care home fee top-ups if needed in later life?

Yvonne Goodwin: Care sector hiding an elephant in the room

All of that said, make sure your client explores the possibility their relative may have a primary health need and insist upon an NHS Continuing Health Care checklist and subsequent assessment if qualifying as soon as social workers are involved, but before the local authority even starts to talk about who pays for what.

This is such a complex area that will have a huge impact on your client trying to do what is best for an aging relative. So if you are advising in this area, make sure you at least read up on these latest publications. Your clients will thank you for pointing them in the right direction.

Yvonne Goodwin is managing director of Yvonne Goodwin Wealth Management

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  1. It really is a minefield isn’t it.

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