denotes premium content | Jan 9 2009 Feature
posted 1 Sep 1996 in Volume 1 Issue 6
Nursing Home and Residential Care
Treatment of Couples
Philip Spiers examines the way in which a couples assets are assessed when determining who pays for care and provides a simple yet invaluable planning tip
For many couples, what on one day may have been a comfortable retirement the next can be devastated if one or both of them require Nursing Home or Residential Care. In particular, if Local Authorities in applying their charging procedures inadvertently cause them extreme financial hardship. Being able to understand the guidance for assessing married or unmarried couples' liability to meet care costs and entitlement to state assistance can be an invaluable knowledge when advising elderly people on their financial affairs.
Both Partners assessed as needing residential accommodation
If both members of a couple are assessed as needing care, the local authority must carry out separate financial assessments according to their own or jointly owned resources. It has no power under the National Assistance Act 1948 or the National Assistance (Assessment of Resources) Regs 1992 to assess a couple according to their combined resources. Different rules may apply in respect of entitlement to DSS Income Support if it is considered that both members residing in the same residential care or nursing home constitutes being members of the same household. This may depend on whether they share the same room or live in separate rooms or wings of perhaps a dual registered home. There is a strong argument that living in a care home does not constitute living in a household. A submission to a Social Security Appeal Tribunal referring to the case of Simmons-v-Pizzey (1977) 2 All ER 432 may be successful in this respect.
One Member of a couple assessed as needing residential accommodation
If only one member of a couple is assessed as needing residential or nursing home care, that member only, should be financially assessed according to their own resources and their share of joint resources. In practice, many authorities use financial assessment forms which ask details of both members' capital and income. In obtaining this information, it may be said that they are able to advise the spouse remaining at home on perhaps their entitlement to DSS income support, however, in many cases, this information will be used to determine whether a liable relatives contribution is appropriate.
Liable Relatives Contributions
Section 42 of the National Assistance Act 1948 states that spouses are liable to maintain each other if one member is being accommodated at the expense of the Local Authority. This applies only to married couples. Unmarried couples are not legally obliged to maintain each other under this Act.
Although the Local Authority can ask the member of a couple remaining at home to contribute towards their spouse's care costs, as mentioned above, it may ask for details of their income and savings but has no power to insist on being provided with that information. Furthermore, neither the Benefits Agency nor Local Authority has the power to set a fixed amount which a spouse should pay towards their husband's or wife's care costs.
To a degree, therefore, the amount a liable relative should contribute to their spouse's care costs, comes down to "horse dealing". The Local Authority guidance states that in assessing a liable relative's contribution, they should proceed as follows:-
I. Assess the ability of the resident to pay, based solely on his/her resources.
II. If the resident is unable to pay the standard rate, decide whether it is worth pursuing the spouse for the shortfall.
III. If it is worth pursuing the spouse for maintenance, negotiate with him/her how much this should be, considering their normal expenditure and standard of living but, in doing so, not expect them to reduce their resources to Income Support levels.
IV. Ultimately, only the courts can decide what is an appropriate amount of maintenance to pay and the authority should consider whether the amount sought would be similar to what a court may decide.
Varying the Personal Expenses allowance and treatment of occupational pensions
If the spouse remaining at home has been left in financial hardship, the Local Authority does have the discretion under Section 22(4) National Assistance Act 1948, to vary the resident's personal expenses allowance to allow a maintenance payment to be paid to his/her spouse at home. In doing so, however, they must consider the effect such a payment may have on any DSS Benefits Agency as income and may only have the effect of reducing benefit entitlement by the same amount.
From April 1996, if a member of a married couple in a care home receives an occupational pension, half this amount can be paid back to the spouse remaining at home. This, although in my view inequitable, does not apply to personal pensions or retirement annuitities.
Where the resident of the care home has all the financial resources and the Local Authority does not allow money to be returned to the spouse at home, that spouse can use the complaints procedure, complain to the ombudsman or, if that fails, there is no reason why they cannot make their own applications under section 42 of the National Assistance Act 1948 for the Magistrates Court to order the council to release money for their maintenance.
The Marital Home
For the purpose of the financial assessment, when one member of a couple enters residential accommodation, the value of his/her home is disregarded as long as it is occupied in whole or part by his/her partner.
Should the spouse remain at home, decide to sell the property and move into smaller less expensive accommodation, the resident's 50% share of the proceeds could be taken into account in the charging assessment. However, should the resident wish to make available part of his/her share of the proceeds to the spouse to enable the purchase of the smaller property, the local authority guidance states that it would be reasonable for this amount to be disregarded, leaving only the surplus of the partner's share to be taken into account.
Money tip where couples have joint savings
In assessing a resident's entitlement to financial assistance, the DSS and Local Authority will take into account joint savings with a spouse and, until those joint savings fall to £32,000, no financial help is available (i.e. ½ of £32,000 = £16,000 capital limit).
Those residents who are paying for their accommodation from joint savings with a spouse at home, should split those accounts into separate single accounts immediately to benefit from state assistance as early as possible. see figure 1.
Further information on financial planning for care costs and summaries of local authority charging procedures can be obtained from:
Philip Spiers, Nursing Home Fees Agency, Old Bank House, 95 London Road, Headington, Oxford OX3 9AE, Telephone: 01865 750665
