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Live-in Care: How Do I Pay for It?

If your loved one needs help to remain in their own home, live-in care could be the answer. There are various ways to pay for this type of elderly care, which can be more affordable than you might think. Here are some options you may like to consider when arranging 24/7 care in the home for your loved one.

Local Authority Assistance

You can request the social services department of your loved one’s local authority to carry out a needs assessment. If they are assessed as needing care, you could apply for financial help from the local authority. This would involve a means test that would look at your loved one’s income, savings and other assets, to assess whether they would be eligible for any help towards care costs.

Not everyone qualifies for this kind of help, and if their assets are above the capital limits or their income is too high, they will have to fund their in-home care independently. The rules vary in different parts of the UK, so it is worth checking on the details with the local authority.

If your loved one is eligible for financial assistance, this will probably be in the form of a personal budget that can be used towards whatever home care services they need, including private live-in care. If they don’t qualify for local authority help, you will need to look at alternative ways of meeting the costs of elderly care at home.

Income

Your loved one may be able to meet their care costs by using income from investments or pensions. They may also be in receipt of benefits such as attendance allowance that can be used towards the cost of employing a live-in carer.

Mikis’ care story

In this short video, Nick and Maro explain their reasons for choosing Elder live-in care. They discuss how live-in care has allowed Nick’s father Mikis to stay independent in his own home while making a new friend at the same time.

Savings

If your loved one has substantial savings, these could be used to fund their care. If their savings are below a certain level, they might be eligible for financial assistance from their local authority (see above).

Downsizing

Although moving home can be a stressful experience, especially if your loved one needs dementia care, moving to a smaller property can sometimes release funds that could be used to pay for care. This option can also reduce property maintenance costs and can be a good solution to allow some people to continue their independent living, rather than moving into a care home.

Equity Release

If your loved one owns their own property, an equity release scheme could provide a tax-free lump sum or allow them to draw down smaller amounts as and when they are needed. In this structure, they would retain the right to live in the property until they die or move into permanent residential care. When the house is sold, the money is repaid.

The two main types of equity release scheme are lifetime mortgages and home reversion plans. Your loved one may be eligible for an equity release scheme if they live in the UK and own their property outright. Different companies enforce different age limits, but people usually have to be over 60, or in some cases 55, for an equity release scheme. The value and condition of the property and the health of the homeowner also have some impact on eligibility.

A Lifetime Mortgage

In this option, the owner of the property is loaned money against its value. This may be either in the form of a lump sum or smaller amounts when they are needed. The amount that can be released is usually higher for older people, and will also depend on the value of the property. The money only becomes repayable when the property is sold, however long that is. Interest is added to the amount of the loan on a regular basis so the amount owed can be increased quite considerably over the years.

A Home Reversion Plan

A home reversion plan involves selling part or all of the property to a home reversion company. It is another way of getting a tax-free lump sum to pay for private care, whether this is Alzheimer’s care or employing a caregiver experienced and qualified in another type of elderly care. The money does not all have to be taken at once; a proportion of the home can be sold initially, and further percentages sold as more cash is required. When the property is sold, the home reversion company receives their proportion of the sale proceeds.

With this option, your loved one would retain the right to live in their home for the rest of their life, or until they move into residential care on a long term basis. The property will not be in their sole ownership since this will be shared with the home reversion company.

Before deciding on an equity release scheme such as a lifetime mortgage or a home reversion plan, it is important that you and your loved one understand all the possible costs.

Private care providers should also be able to provide information about what options of paying for care are available to you. Whether your loved one needs live-in dementia care or help with mobility twenty-four hours a day, they can offer you information about potential ways to fund your loved one’s bespoke care plan.

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"Knowing how happy someone is with their care package makes all the hard work worthwhile!"

Katherine, Care Professional at Elder

Katherine Elder Carer

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