Care Home Fees and Your Property

For many families, one of the most pressing concerns when a loved one requires residential care is whether their home will need to be sold to pay for care fees. The rules surrounding care funding can be complex, and misunderstanding them can lead to unnecessary anxiety and costly mistakes.

This article explains how property is treated in care fee assessments in England and highlights some of the key considerations for individuals and families planning for later life.

How Are Care Home Fees Assessed?

When a person moves into a care home, the local authority will usually carry out a financial assessment to determine whether they are eligible for financial assistance.

The assessment considers both income and capital, including savings, investments and, in some circumstances, property. If a person's assets exceed the applicable capital threshold, they may be required to pay the full cost of their care.

Will My Home Be Taken Into Account?

A person's home is not automatically included in a financial assessment.

In many cases, the property may be disregarded, particularly where it continues to be occupied by:

• A spouse, civil partner or partner;
• A close relative aged 60 or over;
• A dependent child under 18; or
• In certain circumstances, a disabled relative.

Where one of these exemptions apply, the value of the property may be ignored for as long as the qualifying person remains living there.

The 12 Week Property Disregard

If a person moves permanently into residential care and their property is taken into account, the local authority may disregard its value for the first 12 weeks of permanent care.

This period can provide valuable time for families to consider their options and make informed decisions without immediate pressure to sell the property.

Deferred Payment Agreements

A common misconception is that a property must be sold immediately to fund care costs.

In many circumstances, local authorities offer Deferred Payment Agreements (DPAs). Under a DPA, the local authority effectively lends money to cover care fees and recovers the debt later, usually when the property is sold or from the individual's estate.

Interest and administration charges may apply, and eligibility requirements must be satisfied.

Can I Give Away My Home to Avoid Care Fees?

Some individuals consider transferring property to children or other family members in an attempt to reduce assets before a care needs assessment.

However, local authorities have powers to investigate whether assets have been deliberately disposed of to avoid care charges. This is known as "deprivation of assets".

If a local authority concludes that a transfer was made primarily to avoid care costs, it may still treat the individual as owning the asset for assessment purposes. In some cases, attempts to avoid care fees can create additional legal, tax and family complications.

For this reason, professional legal advice should always be sought before transferring significant assets.

Estate Planning and Care Fee Considerations

While no legal strategy can guarantee protection from future care fees, careful estate planning can help individuals understand their options and structure their affairs appropriately.

This may include:

• Reviewing wills and inheritance planning;
• Considering lasting powers of attorney;
• Assessing ownership structures for property;
• Understanding the implications of trusts; and
• Planning for potential future care needs as part of a wider financial strategy.

Seeking Professional Advice

The rules governing care funding and property assessments are complex and subject to change. Early legal advice can help families understand their rights, avoid common misconceptions and make informed decisions about future care arrangements.

If you are concerned about how care fees may affect your home or estate, our experienced private client team can provide clear and practical guidance tailored to your circumstances.