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A complex set of rules means many people are missing out on state help with care home costs

When Harry Denham’s wife Florence died after an unexpected heart attack the family was forced to sell the family home of 30 years to pay for his care.

Harry, who had Alzheimer’s disease, was living at Beachwood nursing home in Newport, south Wales. “We were in a state of shock. My father didn’t even know my mother had died,” recalls daughter Jane Czyrko.

Florence died in April 2003. The family sold the home for £140,000 and, shortly after, received an invoice for £7,500 from the nursing home for fees backdated to her death. The cost of caring for Harry had increased from £85 to £740 a week as the rules meant the now vacant property would be taken into account in assessing his ability to pay.

Harry’s assets quickly dwindled to the £22,500 threshold, then the level at which the state helped with care costs. At that point the family was told it had to pay £40 a week top-up fees. Czyrko says: “Dad didn’t have enough money from his pension and we were told we’d have to pay the difference. They’d had my dad’s money and now they want us to pay.” What about state support? “No one ever suggested that. Not once. We were never advised that Dad could expect continuing care.”

The government is expected to publish its green paper on the funding of care services next month. It has been estimated that 70,000 people have been forced to sell their homes to pay healthcare fees over the past 10 years – although some of them, including Czyrko, have since discovered they were entitled to more state support.

What is available

The rules surrounding long-term care are complex. For most people the first port of call will be social services, which will assess their needs.

People whose healthcare needs are high might be entitled to NHS funded continuing care, says Lizzie Feltoe, from Age Concern and Help the Aged. “The critical thing is whether someone’s primary need is a healthcare need. But this doesn’t mean that if you have an illness or a medical condition you’ll automatically qualify.”

The government revised its guidelines in October 2007 with the aim of clarifying what had been criticised for being an overly complex regime and ending a postcode lottery whereby funding varied dramatically from one primary care trust to the next. But the rules are still difficult to negotiate and based on a number of factors such as whether an illness deteriorates quickly, the behaviour the condition causes and restrictions on mobility. If you are not eligible for continuing care and have capital exceeding £23,000 (the threshold increased from £22,500 this year), you have to pay all care fees.

If your capital is between £14,000 and £22,999 and your local authority has assessed you have care needs it will pay for those costs. If you choose a home which charges more than the amount it is prepared to pay you may be asked for a top-up fee. This can only be paid by a third party – in other words, the resident in the home is not allowed to pay.

If you are paying your way, you should be aware of the possibility of attendance allowance. It is a non-means-tested benefit and paid, depending on need, at either £47.10 or £70.35 a week.

Compensation

Harry Denham’s family only became aware of continuing care when he died in February 2007 and daughter Jane Cyzrko started work at the Alzheimer’s Society. They also learned they should never have had to sell the house. They recently received more than £100,000 compensation for the fees they had erroneously paid over the years. “I’d been led to believe – wrongly – that Alzheimer’s wasn’t regarded as a health issue but a social issue. People treat the condition as almost socially unacceptable,” says Cyzrko. “If you are entitled to state support, you shouldn’t have to ask.”

The funding of dementia cases is especially complex, says Feltoe. “Someone might have an illness but their primary need isn’t for healthcare, it is for social care. Some people who have dementia don’t qualify for continuing care funding,” she adds.

Lisa Morgan, a solicitor at Hugh James solicitors acting for the Denham family, is advising 750 families in England and Wales who claim to have been wrongly charged nursing home fees. “Most people are told as soon as they leave hospital or need to go into long-term care they must either sell the property or use savings to pay for care whereas in fact an assessment should be undertaken,” she says. On average, weekly nursing home fees are about £600 a week. “It adds up very quickly,” Morgan says. “We find that such claims tend to be around £40,000 to £100,000.”

What possible solutions to the funding crisis might the forthcoming green paper offer? Philip Spiers, chief executive of First Stop Advice, an independent and free service that provides information and advice about care and housing in later life, believes the paper is likely to set out options “rather than be more prescriptive”.

Funding models are likely to range from the promotion of private insurance and equity release through to a social insurance fund (contributed to via a lump-sum payment at retirement) and an inheritance tax “care” duty. “I think any social fund has to be compulsory so people can’t opt out,” says Spiers. However he adds that options could be combined. “So one could opt out of paying your premium but remain part of the scheme – and there would be a charge on your estate payable on your death as part of the inheritance tax care duty.”