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10 Common Myths when Sourcing and Paying for Care
Sep 20, 2019
1. It’s free!
Well only sometimes. Firstly, if you don’t already, you’ll need to understand the difference between ‘social’ and ‘health’ care. Social care is best described as care needed to help with activities of daily living (washing, eating, mobility etc). It is the responsibility of your local authority who will assess the needs you have, and they will also assess how much you are able to pay towards the care you need. If someone in need of social care owns a house or has much in the way of savings, the chances are they’ll have to pay for all or at least some of their social care. On the other hand, health care is where your needs are of a medical nature, and this is the responsibility of the NHS. So, if your need is for health care, this is currently free at the point of need.
2. Information in respect of care from my Local Authority or Clinical Commissioning Group (GP) will always be accurate, so why do I need to speak to anyone else?
These organisations always start from the position of aiming to treat the public fairly and they seek to provide accurate information. However, the current complexities of our social and health care services and the related funding challenges they face, mean that unfortunately it’s a bit of a postcode lottery when it comes to how reliable the information and advice is. That’s why we believe it’s so important that our clients have access to expert, independent advice to help them navigate the social and health care systems from the start, establishing a clear pathway and comprehensive approach to ensure they get the best care available and any help with funding to which they are entitled.
3. f I run out of money, the State will pick up my social care costs
Again, only in some circumstances, and you’ll potentially limit your choices. Your local authority has a statutory responsibility to identify what are called ‘eligible’ needs. They must provide care sufficient to meet those needs, and they must pay for this care if you run out of money (or your income and assets are below the financial threshold). However, if your care needs do not meet the eligibility criteria, the local authority is not obliged to pay for them. If they do meet the criteria, you might find that the amount the local authority will pay gives you limited or no choice as to where you receive care, and how the care is delivered, unless a family member or other benefactor is prepared to pay the difference between what the local authority will pay and the cost of your choice of care provision (this is known as a ‘third party top up’).
4. I hear that if I gift my assets to loved ones, the State will pick up my care costs
Beware! If you deprive yourself of assets by gifting them or disposing of them in some other way, where the main or significant purpose in doing so is to avoid paying for care and making the state pay instead, your actions are likely to fall foul of a rule known as ‘deliberate deprivation of assets’. Local Authorities have extensive powers to investigate whether this rule applies to your past actions. If they decide that you have deliberately given your assets or income away then when they are assessing your eligibility for financial support they will ask you to pay the amount that you would have paid if you had never given those assets away.
5. I’m told it’s not worth applying for free NHS Continuing Health Care (CHC)
Where your care needs are primarily health related and severe (known as a ‘primary health need’) you might be eligible for free NHS CHC, which will cover all the costs of your care, including your accommodation if you need to be in a care or nursing home. Many people are wrongly told that they shouldn’t bother applying as they won’t qualify. For example, it is not unusual for NHS CHC assessments to be denied on the basis that dementia is never a ‘primary health need’, but this isn’t always the case. If you are assessed for NHS CHS, and told that you will not receive it, you would be well advised to quote relevant case history and law. The use of this has resulted in many successful appeals to date, and this is an example of why professional advice is so important.
6. Attendance Allowance (AA) isn’t paid when receiving care in a residential care home.
Well only sometimes. Firstly, if you don’t already, you’ll need to understand the difference between ‘social’ and ‘health’ care. Social care is best described as care needed to help with activities of daily living (washing, eating, mobility etc). It is the responsibility of your local authority who will assess the needs you have, and they will also assess how much you are able to pay towards the care you need. If someone in need of social care owns a house or has much in the way of savings, the chances are they’ll have to pay for all or at least some of their social care. On the other hand, health care is where your needs are of a medical nature, and this is the responsibility of the NHS. So, if your need is for health care, this is currently free at the point of need.
7. Care in my own home will be more expensive than in a residential care home
Not always. For one thing, receiving care at home will mean you won’t have to pay the accommodation costs that you would in a residential care home. Furthermore, if more than one person needs care in the same home, ‘live in care’ or full-time care can often work out significantly cheaper than both people going into residential care
8. I will have to sell my home to pay for the care that I need
Not necessarily. The rules concerning property and care are lengthy and complex, but it’s important to understand that if you or a dependant (including a spouse or civil partner) are still living in the property then its value will be disregarded by the Local Authority when they assess your ability to pay for your care. In any event, your Local Authority should disregard the value of your property for 12 weeks after an assessment or until the property sells, if sooner.
9. If I lose mental capacity, my spouse/civil partner can make necessary decisions on my behalf.
This is something many unfortunately assume to be the case. If you haven’t established an official legal Power of Attorney, then in many cases you spouse or partner will not be able to fulfil your wishes or make decisions on your behalf. This can become especially problematic where you own property or assets jointly and they need to be sold to pay for care fees.
10. If I have to pay for my own care, I don’t need a financial adviser
The importance of advice from a registered and suitably qualified financial adviser is often underestimated. For example, did you know they are the only people who are legally allowed to advise on all the ways you might consider paying for your care. Significantly, only they can advise you on the only way that is currently available to guarantee the payment of your care fees for life (often referred to as an Immediate Care Annuity or Care Plan)?
If a person’s medical condition is unpredictable and/or unstable and they need constant 24 hour acute or specialist nursing care, they may be entitled to NHS Continuing Healthcare. NHS Continuing Healthcare will cover all the costs of your care, including accommodation if you need to be in a care or nursing home. The eligibility for NHS Continuing Healthcare is based on the individual having a “Primary Health Need”. In order to determine whether an individual has a primary health need, a detailed assessment and decision-making process must be followed, as set out in the National Framework. Where an individual has a primary health need and is therefore eligible for NHS Continuing Healthcare, the NHS is responsible for commissioning a care package that meets the individual’s health and associated social care needs. A primary health need is not about the reason why someone requires care or support, nor is it based on a diagnosis; it is about the level and type of actual day-to-day care required and it is the nature and intensity of these needs that must be considered when determining eligibility for NHS CHC. The first step is the completion of a Checklist. The Checklist is a screening tool and the first stage of the NHS CHC funding assessment process. It is intended to be relatively quick and straightforward, so it is not necessary to provide detailed evidence along with the completed Checklist. A positive outcome in the Checklist does not mean the individual is automatically eligible for NHS CHC funding; it simply means that they progress to stage two. Stage two involves a multidisciplinary team (MDT) and the use of the Decision Support Tool (DST). This stage is often known as the ‘full assessment’ and it is much more involved.
Kirsten attained her Later Life Adviser Accreditation (LLAA) in 2011, having proven her professional commitment to the area of Later Life advice.
Corporate Chartered status is awarded by the Chartered Insurance Institute – the professional body for insurance and personal finance, to firms that have made a public commitment to aligned ethics and values, to providing knowledgeable advice backed up by qualifications and continued professional development, and to seeking good customer outcomes.
These are two questions that people often ask themselves when they start thinking about financial planning. And that’s only natural. We expect our money to help us feel safe, especially as we grow older and start thinking about retirement. Unfortunately, if you view your savings and investments only as numbers on a page that you’re trying to nudge upwards, then there’s no such thing as “enough.” You could always be saving more. You could always be investing more. You could always be spending less. But does doing so make you feel any happier? Your financial plan should be a vehicle that takes you where you want to go. If you’re fixated on “having enough money,” then your plan, and the life it provides you, will be stuck in a cul-de-sac. You’ll find yourself trying to justify every minor and major financial decision as you circle around and around wondering if you “have enough.” That’s not a trip that’s going to make you feel secure. It’s not going to make you feel happy either. Ask New Questions Today, people are starting to ask a new question about their financial plan: “Am I getting the best life possible with the money I have?” Instead of focusing exclusively on their traditional return on investment (ROI), these people are starting to focus on their Return on Life ™ (ROL). But how do you know if you are getting a good ROL? We concluded that people need to measure where they are presently against the ideals they are striving for in the context of ROL. This is how the ROL Index was born. The ROL Index helps you answer the question: “Am I getting the best life possible with the money I have?” It consists of 20 questions that are grouped into three categories: Well-Being , Progress , and Freedom. You can think of the ROL Index as a measure of life satisfaction and how well you are using your money to live your best life possible. Let’s look at the three categories and some of the resulting conversation points.
Consider these two scenarios: Mark spends lots of money on trips and entertainment. His father was a workaholic who never took time to really enjoy what he had earned. Nancy never feels she saves enough, despite the fact she is a millionaire. She grew up in a large family that constantly struggled to make ends meet; at one point the family was homeless. Both examples illustrate the impact your individual backstory can have on how you think about money and investing. These stories are an essential part of your Financial Philosophy. Have you ever thought about how and why you make money decisions as you do? Before talking about strategies, tactics, allocations, and categories, it is essential that we both understand how you think about investing and money matters. Every decision we make involves both money and values. Financial Philosophy is understanding the connection between the two and using that connection to make the right decisions when it comes to investing. Understanding your own Financial Philosophy begins with answering a series of questions designed to help you develop a plan that works for your unique set of values and circumstances: Debt: How much debt do you have? Are you comfortable with that level of debt? Savings: How much savings do you have? Are you comfortable with your level of savings? Spending: What is your level of spending? Are you comfortable with your level of spending? Giving: What is your level of charitable contributions? Are you comfortable with your level of charitable contributions? Stock Market: Does investing in the stock market make you nervous? Are you comfortable with your level of investment in the stock market? Insurance: How do you feel about insurance? Are you comfortable with your level of coverage? Children: What is your attitude regarding supporting your children? Do you expect them to earn their own way, or do you want to give them every advantage? Somewhere in between? Are you comfortable with what you can provide them? Retirement: When do you plan to retire? As soon as possible? Never? Somewhere in between? Are you comfortable with your current retirement plan? Answering these questions completely and honestly will help us ensure that your plan supports your values.
With ROL, money becomes a tool to help you live the life you want. Accumulating as much wealth as possible is no longer the primary objective of your financial plan. The traditional path to saving and investing has been to focus on the future (retirement) and rely solely on numbers and return on investment (ROI). However, this approach often can be misleading because it doesn’t consider your individual circumstances. “Beating the market” is often an artificial objective because it is not likely to have a substantive impact on your unique situation. Consider this: what does beating the market by one percent less (or more) mean to how you live your life? Do market returns have an impact on how you live your life? What is relevant is developing a financial plan that considers the following: How much do you currently have invested? What is your current cash flow? What transitions are you currently experiencing, or expect to experience (examples include paying down debt, divorce, concern about illness, job loss, retirement, purchasing a home, providing financial assistance to a family member)? Do I feel comfortable with my level of financial obligations (examples include housing expenses, leisure activities, and healthcare expenses)? By incorporating these factors into your planning, we can begin to understand what needs to change (or not change) in order to live the best life possible without overextending yourself. You may even be pleasantly surprised to learn you can enjoy the fruits of your labours sooner than expected! Money does not exist for its own sake. Money exists as a utility that we use to improve our lives. How your returns compare to any index, fund, investment category, or another person are less consequential than whether you are meeting your own ROL goals. Measure your success against your objectives, not someone else’s. You don’t need to keep up with the Jones’—or anyone else. In order to enjoy ROL, you need to understand where all your money is coming from and where all your money is going––and why. Understanding the “why” enables us to create a plan that works for you and your individual circumstances. You may be living above your means and need to make changes to your lifestyle. Or you may already have enough and be able to take a trip or enjoy another experience you have been putting off.
