Care home residents failing to claim thousands of pounds in benefits

Care home residents and their families are failing to claim for thousands of pounds in benefits as well as funded nursing care from the NHS, due to a "knowledge black hole", says a care home fees expert.

Paying for care is the most expensive thing you will pay for in your entire life and yet very few families ask for guidance, according to Owain Wright who runs a not for profit care home fees guidance service. This is despite the whole care fee funding process in the UK being hugely complex.

Nearly half a million people in the UK live in a care home and around half of these fund themselves and the other half receive local authority funding, with a quarter of these paying top-ups.

The amount you pay towards your care will depend on where you live in the UK. If you are a self-funder, it is vital that you find out how much the care home will cost each year, the benefits you are entitled to, how much income you need and how best to generate this income from your assets.

However people are often unaware what benefits they are entitled to and Mr Wright, founder of Care Funding Guidance, says: “We see so many families who aren’t claiming Attendance Allowance which is the easiest of all state benefits to be entitled to. In the worst case we’ve seen a family which had lost around £48,000 of what is essentially free money.

'Lack of knowledge is startling'

“The lack of knowledge is startling, right across the board. As well as families themselves, I include care home staff, hospital staff, GPs, etc. I’ve had dozens if not hundreds of solicitors who are acting as attorney for someone who hasn’t even claimed Attendance Allowance. It’s like a knowledge black hole.”

He has also found that “very few self-funding families bother to find out the cost of the care fee annuity which allows you to ‘solve’ the care funding problem with just one cheque”.

“The cost of the annuity can vary enormously so getting quotations should be almost the first thing that self-funding families do,” he adds.

Some care home residents in England, Wales and Northern Ireland are eligible for Funded Nursing Care (FNC) where a flat rate contribution is paid by the NHS towards the cost of nursing care. In Scotland, everyone, regardless of income, assets or partner status, aged 65 and over, receives free personal and nursing care (up to a certain limit) if they need it.

Some residents in the UK are also eligible for Continuing Healthcare Funding (CHC), which is not means tested and pays for a person’s health and social care needs as well as their care home accommodation.

Funded Nursing Care and Continuing Healthcare Funding can make a huge difference “to many families and generate further income” for their relatives who are in a care home, yet the whole process of applying for it can appear very daunting.

Mr Wright says: “Funded Nursing Care is easy to obtain, provided you meet the criteria, but getting Continuing Healthcare Funding can be an uphill battle. The trouble is that a lot of families have unreasonable expectations of their family member being eligible for it.”

Families can be unaware of the best ways to invest their money

Sometimes families are unaware of the best ways to invest their money to ensure they generate enough of an income to pay for the care home.

Mr Wright reveals that he recently helped a family to pay for a better quality care home by simply helping them generate an extra £20,000 a year of income for their mum by making the suggestion that £500,000 of house sale proceeds be moved from bank accounts into low risk income producing investments. He says: “This is probably the most common mistake at the moment as interest rates are at an all time global low and so income generated from cash is almost negligible.”

Ensuring families receive detailed guidance on how to fund their relative’s care is also important for care homes, as they can be put in a very difficult situation when a resident runs out of money and can no longer fund their care.

Care Funding Guidance, which is not-for-profit, offers a unique Financial Assessment Service where the care home pays £10 a month per care home for Care Funding Guidance to financially assess would-be new residents.

This helps care homes to ensure families can afford to meet the care costs and at the same time helps the families to decide what they can afford.

Individuals wanting guidance can get it for free. “We look and listen to establish what the facts are, we deduce what the problems are and we provide guidance to families on what they might potentially do to solve those problems,” says Mr Wright.

He adds: “Families generally call our helpline, although visits can be arranged, we chat through their actual position and we give them guidance that is appropriate to their circumstances.

“With self-funding rates at around £1,000 per week and local authority rates around £500 per week, it is more important than ever that care homes know how long families will be self-funding for.

“We can help care homes to either institute a minimum self-funding period (two to three years is average) or we can simply carry out the Financial Assessment so the care home has a good idea of how long the resident will be self-funding for. This alone can really help in terms of allowing the care home to plan its likely revenue.

“Some care homes get their managers to do the Financial Assessment but this never works very well as the staff tend to hate doing the assessments, they are generally unable to add any value, it takes up lots of their time and it is somewhat confrontational to the family at a time when the care home and the family are supposed to be building a good relationship.”

To find out more about Care Funding Guidance click here. Email info@carefundingguidance.org or call on Freephone 0800 055 6225.