Following the recent announcement that those living in England will be asked to contribute no more than £75,000 towards their social care and that each person will have a protected capital threshold of £123,000 from 2017 is it likely that those older in Wales will receive the same protection from the Welsh Assembly Government?
Claire Davis, Head of the Private Client Department at Howells Solicitors and a Director of Solicitors for the Elderly a National Organisation of Lawyers representing the interests of older people says that she can see no reason why the Welsh Assembly would not consider putting in place similar rules to those being proposed in England although, of course, there are no guarantees that the limits set out for older people in England will be the same as those in Wales.
Miss Davis explains, “The current situation is that social care is means tested in both England and Wales. The protected capital threshold is currently £23,250 in both countries. This means that when an individual’s assets reach that figure their income will still be used towards the funding of their care costs but no further inroads will be made into the capital. In England there is a tariff banding which takes the effective protected capital threshold to a significantly lower level of £14,250. In my opinion, even with the proposed restructuring of care costs there is ample opportunity for older people to take proper advice to ensure that their estates and finances are constructed in such a way that as much as possible is protected from the potential impact of care home fees. "
“Even under the proposed new rules, if they were to apply in Wales, there will still be a significant number of people whose assets are in excess of the £123,000 proposed threshold. As yet the details of the funding are not clear and we would need to have further details as to whether the threshold is to protect against the total cost of care (including accommodation) or merely the actual social care costs of any residential home bill.”
The Impact on Couples
Where a couple’s joint estate exceeds the proposed threshold of £123,000.00 it is still worth considering whether a Will leaving everything to the surviving spouse or civil partner is the wisest option? Miss Davis says, “If the survivor were already in a care home or likely to go into a care home as a result of the death of a partner then any cash assets (or the value of a property) above £123,000 will be used towards care costs subject to the proposed £75,000 limit for such costs whatever they may be defined as at some point in the future. This may be a small amount of money or may be a significant amount of assets depending on the individuals concerned. However, by considering more flexible options in estate planning there is always the possibility of ring fencing half the assets of a couple such that, potentially, from the death of the first one to die the local authority would be responsible for the funding of such care albeit subject to any income contribution. Even where this is not the case a more flexible approach to the drafting of Wills and the use of Trusts allows for consideration of the best way to manage an individual’s estate at the relevant point in time and not merely fixed at the date of death or under the rules of intestacy.”
Miss Davis strongly recommends that it is extremely important that older people, and their families, take appropriate advice from specialist Solicitors (such as members of Solicitors for the Elderly) who will ensure that all matters are taken into consideration including the best interests of the older client themselves and their family whilst maximising the preservation of assets through estate planning and, in some instances, the use of lifetime Trusts in relation to property.
Miss Davis advocates that older people should not be influenced by “products” advertised through unregulated providers either on street corners or in the press and, indeed, “free Wills” from Banks as these may well not take into account the true interests of the client nor provide the client with the adequate protection that such specialist advice would offer. Whilst Miss Davis concurs that the cost of such advice “is not cheap”, as a general rule, a suitable Will is likely to cost less than 20% of the costs of one months care!
Concluding, Miss Davis, hopes that the social care proposals for England will be implemented by the Welsh Assembly Government and that there is no significant delay in them endorsing the proposals as announced by the UK Government or any reduction in the threshold set by the UK Government and that, hopefully, such confirmation will be announced soon.
