Will mum and dad’s home have to be used to pay care costs?

My mum is going into care due to dementia. Her and my dad own their bungalow and are tenants in common, each owning 50 per cent. 

They only have £9,000 savings between them.

Dad will continue to live in the bungalow. Will mum’s share of the house be used to pay for her care home fees? I tried researching it myself but I’m bamboozled by the information.

Ruthe Isden, head of health influencing at Age UK, replies:  It’s always difficult having to move a friend or relative into a care home, and unfortunately the financial side of things can get pretty confusing.

Usually when someone needs care the local authority arranges a care assessment – although you may have to contact the local authority yourself to request one.

This includes a needs assessment to see what kind of care someone requires, and whether those needs are serious enough that the authority will step in to help.

If your mum has reached the point of going into a care home, she will almost certainly reach the needs threshold.

Assuming she does meet this threshold, a means test will be carried out as well. The means test looks at a person’s savings, income and assets to see whether they are entitled to any help to pay for their care.

Ruthe Isden: Usually when someone needs care the local authority arranges an assessment – although you may have to request one yourself

The rules are that an individual would be considered a ‘self-funder’ if they either have an ‘eligible income’ greater than the cost of meeting their needs, or they have capital above £23,250. 

In this case they must pay all their care home bills down to the capital threshold of £23,250. 

Those with assets between £14,250 and £23,250 must contribute something towards their care. 

Anyone with assets below £14,250 won’t have them taken into account. However they may still have to cover all or part of the costs from their eligible income.

As the means test excludes any capital below £14,250, your mum’s half of the joint savings would not be taken into account for paying for care.

In calculating the value of capital the means test does include the value of someone’s home though, and in this situation your mum owns half of your parents’ property.

However, there are some circumstances where the value of someone’s home is disregarded from the means test, including when someone’s current or former partner still lives there. This will continue to be the case for as long as that living situation remains the same.

In your specific situation, your parents’ bungalow should not be taken into account as a way of paying for your mum’s care, as your dad was living there before she went into care and plans to stay there.

However, if your dad does decide he needs to move in the future for whatever reason and the property is sold then the local authority could reassess the situation.

If the bungalow was sold because your dad moved into a care home himself, the same tests described above would be applied to him, with his share of the proceeds being taken into account for his care and your mum’s share going towards hers.

If your dad stays in the property until he dies then likewise your mum’s means test will be revised taking into account of her share of the proceeds from the property and anything she inherits from your dad’s estate.

But it is worth noting that any changes are not applied retrospectively. 

So a revised means test would set out how care will be paid for moving forward. It wouldn’t require your mum to ‘repay’ any financial assistance she’d already received.

If the property was sold because your dad decided he wanted to move, perhaps to downsize, then it does get more complicated. 

But the local authority should take into account the fact your dad needs to have sufficient funds to buy himself a new home. However, there are no clear rules for how funds left over after a purchase should be apportioned or whose name the new property should be put into. 

Age UK has factsheets that may provide additional help in this situation. ‘Property and paying for residential care’ describes how property is affected in care payments, and ‘How to get care and support’ will walk you through the process of getting needs assessments. 

You can download the factsheets from Age UK’s website or order a free copy from the charity’s advice line, free of charge, on 0800 169 6565.