Can we protect family home from care costs?

My husband has gone into a care home on a permanent basis. We own our family home jointly. We have yet to go through the local authority’s financial assessment but I understand that, as long as I continue to live in the property, my husband’s half will be exempt from his care costs. But what if I were to move, to be nearer my husband? Would selling the existing property mean that the local authority would lay claim to his half-share for funding his care? Or could I use his equity to help fund the new property purchase?

Pauline Thompson, policy advisor at Age Concern and Help the Aged says that, depending on the cost of the property you move to, it should be possible to use at least some of your husband’s equity for the new purchase – rather than it all being available to the local authority to fund his care costs.

However, you would be expected to use up your half-share first when buying a property, with your husband’s equity only being used to pay any remaining cost. Any surplus from his share would then be available to the local authority to cover his care fees.

For example, were you to sell your current home for £400,000 and buy a new property for £300,000, your £200,000 plus £100,000 of your husband’s equity would be exempt. But the other £100,000 of the proceeds could be claimed for funding his care.

Costs such as stamp duty and solicitors’ fees can also be included in the overall purchase price. Some local authorities are more generous than others, and may also allow some of your husband’s share to be used to pay for carpets, curtains and “set-up” costs for your new home.

The relevant exemption is contained within the current Charging for Residential Accommodation Guidance (Crag), which sets the rules that local authorities must follow when carrying out means tests for residential care. This says that when the other partner decides to move to a smaller property, the care home resident can make available part of their share of the proceeds from the sale for the new purchase. It would “not be reasonable” for a local authority to treat the resident as having deprived themselves of capital in order to reduce their accommodation charge.

By contrast, where an individual is deemed to have deprived themselves of capital, local authorities can include that money as if it were still owned by the resident and, in some cases, pursue a beneficiary.

While the exemption talks of downsizing, in practice there is no requirement for the property to be smaller or of lower value. And if you are planning to move properties to be nearer your husband, it is worth approaching your own local authority to confirm how it would treat your situation.

It may also be worth considering whether the local authority could offer your husband a suitable care home nearer to where you live now. If there are suitable local care homes, but not at the price the local authority is prepared to pay, you may challenge its assessment. The local authority should look at the resident’s need to be near a spouse.

The Age Concern/Help the Aged advice line is on 0800 00 99 66.