Advice: ‘Will we have to sell our home to keep my mother in care?’

Pat Hutchinson MBE.
Pat Hutchinson MBE.

By Pat Hutchinson MBE, District Manager, Newtownabbey CAB

Q: I am a 35-year-old man, I work full time and live with my mother who has serious health problems and needs to go into nursing care. She owns the property. Will it be sold to keep her in care? There is no mortgage on the home and I have paid for everything in the house, but my name is not on the property deeds? She does not have any savings.

A: The value of the resident’s former home is generally counted as part of her/his capital, after deducting any outstanding mortgage. There is an allowance of 10 per cent of the value to account for the sale costs, therefore only 90 per cent is actually taken into account. However, the health trust must disregard completely the value of the resident’s former home in certain circumstances, for example, if the client’s partner still lives there.

• When is the value of the home disregarded?

If the resident owns a property which is occupied by a spouse, civil partner or other partner from whom the resident is not estranged or divorced, the value of the property must be disregarded.

If the resident owns a property which is occupied by a spouse, civil partner or other partner from whom s/he is estranged or divorced, the value of the property must be ignored if the wife or partner is a lone parent.

If the resident owns a property which is occupied by one of her/his other relatives, the value of the property must be disregarded if the relative occupying the property is aged 60 or over, or is incapacitated, or is a child under 16 whom the resident is liable to maintain.

There are other instances where the health trust may disregard the property. For example, the property may be the sole home of someone who has given up her/his own home to care for the resident.

In some circumstances, a resident might consider giving away capital in order to avoid this being included in her/his assessment. However, there are rules and health trust powers which are designed to prevent this.

An owner occupier may consider it would be a good idea to give away her/his home, provided s/he can preserve her/his right to live there during her/his lifetime. There is a legal process for doing this. The consequences for donor and recipient of taking such action could be both complex and far-reaching. The general rules about deprivation of capital apply.

Alternatively, the recipient might lose control over the property by, for example, the property being treated as an asset in a divorce settlement, the recipient dying before the donor, or the recipient being made bankrupt. A resident considering doing anything of this kind should take independent legal advice.

• Jointly-owned home

The assessment of the value of a jointly-owned home can be complex. The treatment of property depends on whether the resident is a legal owner or beneficial owner (entitled to the proceeds of the sale of the property). Usually, the legal and beneficial owners will be the same people. However, if they are not, it is beneficial ownership which is relevant for determining the resident’s share of a property. If the resident is a joint beneficial owner, her/his beneficial interest (amount of the sale proceeds s/he would receive) must be calculated.

Government guidance clarifies that it is the resident’s interest in the property which must be valued, and not just the property itself. The value of the interest depends on whether s/he can sell it and whether anyone would actually want to buy this interest. The guidance states that in many cases the only likely buyer would be a relative, and without a potential buyer the value of the resident’s interest could therefore effectively be nil.

It looks like in this case the home will be taken into account to keep the mother in care.

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