Residential Care for the Elderly – Funding Options
While living at home is still a possibility for many elderly people, others find that it becomes more difficult to remain independent as they grow older.
A residential care home facility can be a good way for older people to get the services they need in one place. There are even homes that provide nurses who can look after residents with complex or advanced medical conditions. In addition, they can benefit greatly from being around other elderly residents and having a social community with which to interact on a daily basis.
However, residential care is not fully funded in most cases. People who choose residential care either for themselves or their loved ones will have to think about how to fund their stay in a residential care facility.
Working with Your Local Authority
If you are considering moving into a resident care facility but you are concerned as to how you will finance the process, then you can contact your local authority for advice. Most people will be expected to contribute to their care costs either through their savings, income, or any assets that they may have. Many local authorities utilize a means test in order to assess your costs as well as the value of your property and assets.
Typically, (for the UK) the first £14,250 of your assets and savings are not counted towards the assessment of your means. If you have assets with a value between £14,250 and £23,250, then your local authority will help subsidise the costs of your care.
If you have any assets above £23,250, then you will be responsible for funding your own care. In addition, the Government has recently handed down legislation dictating that caps will placed on the monetary amount of care that they will cover. There will be a lifetime cap of £75,000 on care costs, and an additional cap of £12,000 per year for hotel (“room and board”) costs.
In the US, some local authorities participate in schedules where your residential care costs are deferred and are paid out of your estate when you die. If you have a significant amount of assets and no heirs, this may be a good choice for you if you qualify for the program. You may also qualify to have some of your nursing care costs covered on the NHS or Medicare, though this will not provide for your room and board.
Making Residential Care a Part of a Retirement Savings Plan, or Asking for Help from Loved Ones
While a pension might provide enough money to cover some of your basic costs, it will not be enough to pay for the costs of a residential home or care facility. By making additional savings a part of your retirement plan, you can provide for yourself or a loved one who needs residential care when they are elderly. Increasing your pension contributions while you are still working can go a long way towards covering costs. In addition, you may be able to receive some financial help from your loved ones. The benefits of professional residential care often outweigh the costs.
Funding Your Residential Care – A Smart Choice for the Future
Entering a residential care facility is not a decision to be taken lightly. Funding your care can be done through use of your assets and help from your local authority. Don’t leave arranging your finances until it is too late.
Author: Ryan Hughes writes about Health and Aging.