Dementia Tax, what can be done about it?

Those with close family members faced with the prospect of requiring domiciliary or residential care, by now, should be well aware of the changes that will affect social care policy.

The proposed manifesto will see our vulnerable having to pay for their own care fees if the combined total of their savings and property exceeds £100,000. Granted this raises care fee assessments from £23,250 but, with all things considered is this truly a saving when most assets are tied up in properties anyway? With the housing market as it is today, most people who own their own property will be tasked with paying for their own care fees should the need for care arise.

Of course, payment can be deferred until death, in which case the deceased’s estate would incur the burden of payment, meaning that leaving a healthy inheritance for the family may soon become a thing of the past.

Where domiciliary care was not an issue, its successor ensures that certain degenerative and debilitating diseases will attract care fee obligations and others will not, regardless of where care is provided. Does the discrimination between illnesses, geography and means serve any real benefit when the aim is to make care policies fairer?

The worry now is that in order to protect one’s assets or estate, those in need will shy away from much needed assistance until their circumstances are so dire that they require nursing care under the NHS. The other solution would appear to be transferring ownership of assets before care applications are submitted. However, setting aside the fact that it is unclear how such transfers will be treated under the new policy, there are Inheritance Tax provisions that could adversely affect your estate if certain conditions are not satisfied.

At best it is not yet clear whether there will be a way to receive care assistance without losing your property, diminishing the value of your estate, or putting your own health at more risk. However, if you would like to explore the options that are available which would reduce the blow delivered by the “Dementia tax” reach out to Garden House Solicitors today via email or LinkedIn.

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