The family home and means testing – tips on disregarding property

Thinking about care? Learn how local authorities means test your home

Means testing the family home and paying for care

One of the great fears that many older people and their families have is that they will be forced to sell the family home to pay for the cost of their care.

Means testing rules are used to work out whether an older person qualifies for financial support to pay for their care fees. If the person owns their own home the value of the property will usually be taken into account as part of their financial assessment.

But there are situations in which the local authority must disregard the value of the family home when carrying out means testing. A situation I’m often asked about is where someone else also lives in the property with the person who is being assessed.

Disregarding the family home – when and why

Local authorities must disregard the family home from means testing in certain circumstances.

The most common example of this is where the person’s spouse or partner is still living in the property. Under the rules the property can’t be taken into account for means testing. This is the situation even when the spouse or partner is not named as a joint owner of the property on the deeds or Land Registry register of title.

Local authorities must also disregard the property if there is a relative of the person needing care or of a member of their extended family living at the property who is themselves either:-
>aged 60 years or older or
>who is under 18 years and is a child that the person being assessed is maintaining
>or is someone who is ‘incapacitated’.

There isn’t a definition of what is meant by ‘incapacitated’ but it is usually that they are eligible to receive benefits relating to their condition such as Attendance Allowance.

Are there other reasons why the family home could be disregarded?

There are other circumstances in which a person’s family home could be disregarded from local authority means testing.

For example, if a person moves into a care home on a temporary basis intending to return to live in their own home the local authority should disregard the value of that property when assessing whether the person is eligible to have their care costs paid for by the council.

And, even if a person moves into a care home on a permanent basis then during the first 12 weeks of their residence in the care home the value of their own property should be disregarded under the guidelines local authorities must follow when carrying out financial assessments.

Top tips on means testing the family home

Here are some tips on preparing for means testing for care costs.

#1. Make sure that any arrangements you set up with family members involving your property are recorded in writing between you. Then, if you have to explain the arrangement years later, as part of a means testing assessment, you will have all the details available.

#2. Be able to explain your intentions behind any arrangements you make with relatives or friends, for example, if someone comes to live in your property make sure the reasons why you agreed to this are clear.

#3. Take professional legal and financial advice before agreeing to transfer the ownership of your property to someone else.

#4. If a relative helped you buy your property under the Right to Buy scheme don’t assume the local authority will automatically disregard the property from your financial assessment – you may need to prove that you don’t have any financial interest in the property.


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