Residential care - assessment of Quilter products

This article looks at how each Quilter product is likely to be considered by a local authorities when assessing an individual’s capital and income.

General guidelines

The Care Act 2014 maps out the process of assessment, charging, establishing entitlement, care planning, and the provision of care and support. This process determines whether individuals need to pay for their own care or receive support from their local authority.

If a local authority charges i.e. they make the individual pay for some or all of the care, it must follow the Care and Support (Charging and Assessment of Resources) regulations and have regard to the Care and support statutory guidance: 

www.gov.uk/government/publications/care-act-statutory-guidance/care-and-support-statutory-guidance#charging-and-financial-assessment

Within the guidance there are a few key limits:

The ‘upper capital limit’ currently set at £23,250. Below this level, an individual can seek means-tested support from the local authority. Above this the individual will be deemed to be able to afford the full cost of their care

The ‘lower capital limit’ currently set at £14,250. Below this level an individual will not need to contribute to the cost of their care and support from their capital.

For adults receiving care and support in locations other than in a care home the limits listed above are simply minimums and local authorities have discretion to set their own higher capital limits if they wish, provided they are no lower than £23,250 for the upper limit and £14,250 for the lower limit.

Where a local authority has chosen to charge, it must financially assess that person's income in addition to capital.

Financial assessment - treatment of Quilter products

Deliberate asset deprivation

Depriving oneself of an asset is defined as:

• the deprivation of capital in order to avoid or reduce care and support charges
• the deprivation of income in order to avoid or reduce care and support charges

Examples of deprivation include an investment into a bond where the motivation of the investment was an increase in the payments from a local authority. Placing assets into trust is also highlighted as a possible method of deprivation of capital.

The guidance would imply that if withdrawals from an investment bond were terminated (where possible) before entering care, these payments would not form part of the assessment, although careful consideration needs to be applied on this point to ensure that the significant motivation for ceasing withdrawals is NOT to increase the local authority payments. This would apply to personally owned bonds as well as bonds held in trust for the settlor's benefit or where an interest is retained such as a discounted gift trust.

If a local authority decides that a person has deliberately deprived themselves of assets in order to avoid or reduce a charge for care and support, they will need to decide whether to treat that person as still having the asset for the purposes of the financial assessment and charge them accordingly.

Summary

Clearly there is a need for advice in this specialist area. Any recommendation should not be to improve an individual’s chance of receiving funding though as a local authority might declare that it was only undertaken to obtain remove capital and/or income from assessment.

¹ (19% UK average in 2024 from 15.93% in 2004) Population aged 65 and over - ONS

² 37%² in care homes Care homes and estimating the self-funding population, England - Office for National Statisticsand 23.5%in home care Estimating the size of the self-funding population in the community, England - Office for National Statistics