Private care for father-in-law

[quackhandle]

Looking for serious advice and not sure where to put this (General not an option).

Maybe a new forum topic? 'Issues with getting old'.

FIL is 85, has Frontotemporal dementia (quite rare form of dementia) and has been a full alcoholic for around a year or so and we have been estranged as he had been nasty to his immediate family (told my wife to eff off on Christmas morning ).

However he has come a week or so ago and asked for help as he was close to killing himself with the booze and he hadn't moved off the sofa for 24 hours. He is now in hospital and it seems the dementia has taken over, he cannot look after himself anymore. Doctors said his liver is fine though! But mentally he has fallen of a cliff.

So, it is a care home.

He owns his bungalow, has good savings and has a good private pension, so he will have to pay for the care home costs. Wife has POA.

Can you ask for pension lump sum to help with the care costs? Anyone gone through this before, similar issues?

Cheers

qh

[cojak]

That’s ok Quack, I know it’s not light relief and expect replies to reflect that.

*Looks meaningfully around the regulars*

[eek]

With my gran the bungalow was rented out which brought in enough (£20,000) to cover what was needed to cover the gap between her pension and the amount required.

[ladymuck]

There is such a thing called a Care Annuity that an IFA can advise on. I enquired about one when my Mum was diagnosed with Alzheimer's. It's purchased at the point of need. However, it may require the sale of the home if there isn't cash available to cover the payment.

I know nothing about using pension draw down, unfortunately, that feels like something for an IFA or a call to the pension company.

eek's suggestion might well be a good option and is one I hadn't considered when thinking about what my brother and I may have to do when the time comes for my Mum.

[quackhandle]

Thanks for the comments so far.

qh

[malvolio]

Thanks for the comments so far.

qh

I agree that an IFA or a Wealth Manager are the people to ask for how to sort the finances. Also, have a word with Social Services - some care costs can be claimable but the application process terrifies most people (and certainly all likely OAP candidates) so an insider view is valuable.

Renting the house means you have assets that stop you claiming any relief on fees. Selling it and putting the proceeds in trust for later generations given you have PoA in place is one option - but equally may stop you getting the best care available.

You two and FiL have my sympathies - anyone who's been there will know what a minefield you are entering. Get expert help as much as you can!

[quackhandle]

Thanks Mal.

qh

[Snooky]

There is such a thing called a Care Annuity that an IFA can advise on. I enquired about one when my Mum was diagnosed with Alzheimer's. It's purchased at the point of need. However, it may require the sale of the home if there isn't cash available to cover the payment.

I know nothing about using pension draw down, unfortunately, that feels like something for an IFA or a call to the pension company.

eek's suggestion might well be a good option and is one I hadn't considered when thinking about what my brother and I may have to do when the time comes for my Mum.

When my father ended up needing to move into a care home, we purchased one of these with some of the proceeds of his house sale. Depending on age, you can get very good rates. For example, my Dad is in his early 90s and he got a annuity of something like 32%. What that means is that if you spend £100k buying the annuity, it's guaranteed to pay out £32k every year until death.

The advantages of this are:

• You know that money will be coming, no matter what, so it removes some or all of the worry about funds completely disappearing after several years (so there might be something left for any beneficiaries of a will, for example)
• It's paid directly to the care home and is entirely tax free, so doesn't affect the tax due on any other income

The disadvantages:

• It only lasts as long as the person is alive, so you're taking a gamble on how long they might live. The percentage return figures are carefully calculated using actuarial methods so that the insurance company makes a profit overall. So they clearly think that, on average, men of my Dad's age are unlikely to survive more than a couple of years. If the person lives 4 years, they'll have received more than they put in; if, however, they only last 1 year, that's £100k gone from the estate with only £32k income to show for it.
• The lump sum is gone forever and the remaining funds plus any pension may not be enough to meet total costs, especially in future years
• The lump sum has to come from somewhere, usually the person's main property, so this isn't suitable if that amount of money can't be raised; e.g. if a spouse wants to remain in the property, or if the family don't want it sold for some reason.

[eek]

I agree that an IFA or a Wealth Manager are the people to ask for how to sort the finances. Also, have a word with Social Services - some care costs can be claimable but the application process terrifies most people (and certainly all likely OAP candidates) so an insider view is valuable.

Renting the house means you have assets that stop you claiming any relief on fees. Selling it and putting the proceeds in trust for later generations given you have PoA in place is one option - but equally may stop you getting the best care available.

You two and FiL have my sympathies - anyone who's been there will know what a minefield you are entering. Get expert help as much as you can!

Also don't just use Social Services (they will often try to avoid spending money) it's also worth speaking to Age Concern...

[ladymuck]

Also don't just use Social Services (they will often try to avoid spending money) it's also worth speaking to Age Concern...

That reminds me. Our local Dementia Service (in Sussex) has been a great help. They told my brother about getting an application in for Attendance Allowance so my Mum gets a few bob extra. That means she can claim a discount on her council tax and gets her eligibility for other benefits. I'm fairly sure they'd be able to advise on managing care costs too. Hopefully qH's area has such a service too.