Understanding the Care System Cont...

Broadly speaking, Local Government meets a proportion of the cost of care for you if you have assets of less than the following  amounts:-

UPPER MEANS TEST LIMITS - 2008 / 9

England - £22,250
N. Ireland - £22,250
Wales  - £22,000
Scotland - £21,500

If you have in excess of the Upper means test limit, including your home (there are certain exceptions to this), then you will be responsible for all your long term care costs.

LOWER MEANS TEST LIMITS - 2008 / 9

England - £13,500
N. Ireland - £13,500
Wales  - £19,000
Scotland - £13,000

If you have below the Lower means test limit, including your home (there are certain exceptions to this), then you will generally be funded by the state for your long term care costs.  

So in summary, if you have been prudent and managed to save for your later years, or own your home, it is likely that you will be liable for the majority of your long term care costs.

It is important to understand that Local Authorities have the right of investigation to confirm that your home or assets have not been gifted to avoid liability for your care costs (known as Deprivation of Assets). If it is believed that this has taken place they have far reaching powers to recover the value of any assets disposed of in this way, including the right to demand their return. (If within 6 months of their disposal) or treat them as notional capital. 

A result it is likely that many people will need to sell their homes to enable them to pay for their long term care. Many of these elderly people had planned to pass on their assets to children and grandchildren, but in many cases the majority of those assets have been used to pay care fees.

The total value of the care home market for elderly and physically disabled people at April 2003 was estimated at £10.2 billion, of which private sector operators accounted for £6.9 billion. At April 2003, there were an estimated 501,900 places in residential settings for long stay care of elderly and physically disabled people across all sectors (private, public and voluntary) in the UK.

The latest Laing & Buisson fee survey in March 2003 found average weekly fees of £455 for private nursing care for elderly people and £329 for private residential care in the UK.

Average fee inflation is estimated at 8% for both private nursing and residential care for older people between 2001/2002 and 2002/03.

Looking forward, similar levels of fee inflation are likely in 2003/04 as supply becomes tighter and as more local authorities have been forced to raise baseline fee rates. Thirty per cent of local authorities supplying figures for Laing & Buisson's most recent (July 2003) baseline fee survey increased some or all rates by at least 10 per cent in the negotiating round for financial year 2003/04. A further 30% of local authorities increased some or all residential fees by 5% and above. However, 18% of local authorities implemented increases at or below 3% for some residential care rates - barely sufficient to cover wage increases.

Market size

The following table provides details of the number of homes for all client types. This includes elderly, physically disabled, elderly mentally ill, learning disabled and alcohol and drug dependency clients.

Extract from the Laing & Buisson Care of Elderly People Market Survey 2004.

The result is, that those homes with a large proportion of socially funded residents cannot survive, and subsequently close. This causes heartache to residents who are forced to move to a home not of their choice, sometimes far from friends and family.