NHFA Care Advice say they are taking calls from families of older people unable to meet their care costs – caused by both delays in the Office of the Public Guardian (OPG) processing applications to register Lasting Powers of Attorney (LPA) or appoint deputies; and the disastrous slump in house sales. Figures from The Ministry of Justice show that in the six months to end of March, only 1,256 applications out of a total of 9,623 were registered.
The consequence of this is that families are under sudden financial pressure to fund their relatives’ care. Whilst some care homes are allowing unpaid fees to accrue as a debt, they are penalising that debt with a punitive rate of interest.
Without OPG authority it is impossible for families even to begin to process the sale or rental of an older person's property – or to access any other capital reserves of that person to fund care fees in the interim. Critically, also, without an LPA in place it is not possible to obtain a commercial loan or bridging finance against another person's property.
Councils can assist with the funding of care home fees for the first 12 weeks of care. Beyond that they can enter into deferred payment agreements, where funding is charged against the value of the property. Without a registered LPA, no such agreement can be entered into. Councils also have the discretion to offer financial assistance in certain cases, but rarely have the resources to do so. If an older person's capital at outset is above the current limit of £22,250, have no duty to do so.
Similar difficulties can also arise for older people entering care with sufficient initial available capital and an LPA in place. They can find that, when liquid capital is depleted, their property has not been able to be sold. This leaves them vulnerable and their families under intolerable financial pressure.
Philip Spiers, Managing Director of NHFA Care Fees Advice says: “Without being able to sell properties and access capital, the choice of how best to fund care can be lost. An example would be the potential ability to cap the cost with an Immediate Need care fee payment plan. If properties remain unsold due to the housing slump and/or delays by the OPG, then older people could be forced to remain at home with inadequate care packages – long after it is safe or advisable for them to do so."
Every year in the UK thousands of families are being forced to sell cherished homes, to meet care home fees. Often, these sales are unnecessary and avoidable – when the older person, too ill to live on their own, should have their nursing home fees met by the NHS under 'continuing care' status.
Long term care insurance: News update: October 2008