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Additional information which may help

March 2010.

Request a deferred payment plan

If your assets, excluding your property, are worth less than £23,000, the local authority cannot force you to sell your home. Instead, you can request that a charge is put on the property to be repaid on your death. This then allows the property to be rented - which may help subsidise care costs. It also allows your estate to benefit from any future property rises. Ms Edmans said: "This does give some families more flexibility. Your dependants could then take out a mortgage on the property after your death to pay the charges if they want to keep the home, or pay this bill from other assets."

Buy an immediate needs annuity

Rather than simply sell the home and use the proceeds to pay care fees, it is worth investigating whether this money should be used to buy an annuity, which pays a fixed income for life.

This can provide a degree of certainty for those moving into care, as they know their fees will be guaranteed to be paid for life; their money will not "run out" and they will not have to move into a local authority-run home later. There is also the reassurance that whatever is left from the sale of the home, once the annuity has been bought, can be left to the next generation.

Of course, the downside is that if the person dies shortly after going into nursing care, this is likely to be a more costly option than simply paying the fees direct. But many families are willing to take this risk for the peace of mind of knowing care fees will be met indefinitely. Figures indicate that one in 10 people in a nursing home live for more than eight years.

There are a number of specialist providers that offer these annuities, including Partnership and Axa PPP. Anyone applying for an annuity will undergo a medical and the exact charge for the annuity will depend on their current health, age and gender. Costs can be significantly reduced if those going into care agree to pay just the first year's care costs.

According to Partnership, the cost of buying an immediate care needs annuity, for an 85-year-old woman suffering the early stages of dementia, would be about £85,000. This would pay an annual income of £16,443. In this example, the person would have to live for just over five years for the annuity to pay for itself.

Claim the correct benefits

Even those who have to pay towards their care costs could still be entitled to higher state benefits. Make sure any relative in care is claiming attendance allowance. This is not means-tested and from this month pays a weekly tax-free amount of either £47.80 or £71.40, depending on your level of need. This higher payment is made to those who need care during the day and at night.

If you are receiving care in a nursing home, you should also be eligible for the registered nursing care contribution, paid at £108.70 a week in England. This is paid direct to the home and offsets the cost of your care.
In Scotland, those needing nursing care will also be paid a contribution towards personal care costs (do not assume they are free north of the border). However, those in Scotland do not claim attendance allowance as well.

Invest in a life-insurance bond

If you have money tied up in any investment plan that has an element of life insurance, and this will include endowments, with-profits bonds and insurance bonds - then this should be excluded by your local authority when calculating your ability to pay care fees. However, if two weeks before you go into care you sell your investment portfolio and put it all in an insurance plan, then this is likely to fall foul of the council's "deliberate deprivation" rules. However, if you have held these plans for several years before needing care this capital is likely to be disregarded from any means test.

Ask for NHS care

If care needs are overwhelmingly medical and deemed "complex and unstable" you may qualify for NHS-funded continuing care, which means all bills are met in full, including residential costs. But the strict eligibility criteria mean few people qualify, and even those who do are reassessed regularly. If their condition stabilises, care costs will revert to local authority control, which means patients will be assessed for an ability to pay again. But if a condition worsens, ask for a reassessment for continuing care.

Keep your home out of the grasp of local authorities.

November 16th 2009

Anyone with assets of more than £23,000 will be expected to pay for their care needs. In most cases, the value of any property owned will be included within this sum. However, there are certain circumstances in which the home is excluded. And those with the foresight to plan in advance may want to make sure they can take advantage of this, particularly if their remaining assets are less than the £23,000 limit.

The house will automatically be ignored if a surviving spouse or partner lives there. This rule extends to other relatives aged 60 or over who live in the property. So if a daughter, niece or brother has moved in as a carer, this could help reduce future care costs. More importantly, many couples don't realise that they may be able to take the home out of the care equation altogether by altering the way in which it is owned.

Most couples buying a house do so as "joint tenants". This ensures that on the death of either party their share is automatically transferred to the other. However, it is possible to own a property as "tenants in common". This gives both parties the freedom to leave their share of the home to whoever they like.

If this is done, and half the home is passed onto the children on the death of the first spouse or placed into a trust on their behalf, then it is possible that the whole home may be disregarded at a later stage if the surviving spouse needs nursing care.

Alex Edmans, a care funding expert at Saga, explained: "At the very worst this would ensure that half of the home is taken out of the means-tested assessment. "But the guidelines state that councils are supposed to look at the market value of the home. It could be argued that this is nil if half of it is owned by a third party who is either unwilling or unable to buy out the other owner, and has no wish to sell their stake."

She stressed though that these were only guidelines and there was no guarantee that the local authority would interpret the rules in this way. Other long term care experts warned that many authorities ignored these guidelines. To effect such a change you would need to alter the deeds to your property, which will cost between £150 and £200

Pension Credit Changes - check your entitlement now

November 2nd 2009

Until now the first £6,000 of savings was disregarded, then every £500 of savings above that threshold was assumed to produce £1 of income and the pension credit tapered accordingly. The basic guarantee part of pension credit entitlement is reduced in line with any assumed income earnings on a £1 for £1 basis, but the taper varies according to which other benefits you claim.

But the threshold has now been raised to £10,000, meaning pensioners with savings could get up to £8 a week extra (£1 for every £500 increase in the threshold).Some people with savings of more than £6,000 who have previously just missed out on benefits might also be brought into entitlement by the change and will need to make a claim. The higher "capital disregard" will also apply to people aged 60 or above who receive council tax or housing benefit.

Age Concern and Help the Aged (the charities merged earlier this year but have not yet changed their name) welcomed the uplift to pensioners' incomes but pointed out that millions of older people are still missing out on the financial help they are entitled to through pension credit and other benefits. Andrew Harrop, head of policy at Age Concern and Help the Aged, said: "The changes to the way income from savings is worked out are good news for hundreds of thousands of older people who can certainly do with a small top-up to their weekly income.

"The fact that savings up to £10,000 will be ignored for the purposes of working out benefit entitlements should encourage more older people on modest incomes to check whether they might be missing out on financial help which is rightfully theirs. "This small improvement, though, won't hide the fact that the means-tested system is failing to help many of the older people who most need its help. Up to £5bn goes unclaimed by older people each year and one in three entitled pensioners aren't claiming pension credit."

The charity has called consistently for the government to introduce a system of paying older people their entitlements automatically, rather than relying on them to claim, and a pilot trial is planned.

But in the meantime it urges people to check whether they could be entitled to benefits by using a simple benefits checker on its website or to call the Pension Service on 0800 99 1234.