Coping with care costs – Northern Ireland

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elderly couple

Like many people, you may be concerned about the potential impact of care costs on your finances and your children’s eventual inheritance. Many people seek advice on how their family home and any other savings and investments can be protected if they become unable to care for themselves in their own homes and require either a package of care at home or need to move into a residential or nursing home on a temporary or permanent basis.

Proposals to change care fees announced in the national press will only affect England, since health and social care varies across the UK. So what’s the position in Northern Ireland?

What are the rules around care costs?

The rules around care fees are complex. Broadly speaking, care provided in a person’s own home is not currently charged for but residential and nursing care is subject to a formal ‘means assessment’.

Put simply, if an individual has capital over £23,250 then they may be liable to pay for their care, although a limited number of exemptions do apply. For example, the main home would be disregarded if occupied by a spouse or one of a number of other relatives mentioned in the applicable regulations.

If a person’s capital falls to £14,250, then it will be fully disregarded and the relevant Health & Social Care Trust must meet any shortfall after the individual’s income has been exhausted.

It should be noted that, following a Judicial Review case in Northern Ireland, there is now some much-needed clarity on what is known as ‘Continuing Healthcare’. Put simply, if a person requires a high level of medical care, this cannot be charged for by a Health & Social Care Trust even if it is being provided for in a nursing home. This has been the position in England & Wales for some time but, until now, the position was less clear in Northern Ireland.

How does the means assessment work in Northern Ireland?

The rules governing the means test procedure are contained in the Department of Health, Social Services and Public Safety’s ‘Charging for Residential Accommodation Guide’. A resident will be required to give full details of their income and capital as part of the means test. However, it should be noted that there is no power for a Health & Social Care Trust to assess the financial resources of a person’s spouse or any other third party in calculating their liability to pay for their own care.

Get advice on care fees

Anyone facing a possible liability to pay care fees, , or who believes that they may be eligible for Continuing Healthcare, should always take advice from a qualified professional before completing any formal means assessment or dealing directly with the Health & Social Care Trusts over their finances. It is important to be familiar with the rules, especially those relating to the various exemptions that apply, before submitting any financial information.

Michael Graham TEP is Head of the Private Client Department at Cleaver Fulton Rankin, Belfast, Northern Ireland

How do I make an Enduring Power of Attorney?

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older man

While the benefits of drawing up a will are widely known, making provision in advance for the possibility of you becoming incapable of managing your financial affairs is less so.

It is, however, very important to think about this, and becomes increasingly more so as the risk of mental incapacity grows through age, illness or accident.

Provisions for this vary within the various parts of the UK, either in the form of an ‘Enduring’ or ‘Lasting’ Powers of Attorney.

In Northern Ireland, by making an Enduring Power of Attorney (EPA), you can appoint one or more people to act on your behalf in relation to all of your financial affairs in the event that you are unable to do so yourself in the future.

The EPA can include restrictions if you wish, but generally it is advisable to ensure that the attorneys can deal with all of your assets if they need to, including giving them the power to sell your home. The attorneys would be able to manage your assets and income, and deal with any expenses that you have, such as nursing care fees.

Just in case

An EPA should be viewed as being like an insurance policy, in that it is hoped that it will never be needed, but would nevertheless be available should the worst happen.

You should make an EPA when you are still healthy and capable, rather than waiting until capacity has become an issue.

How would an EPA work?

In the event of a loss of capacity, the EPA would need to be registered with the High Court. Registration is not required until your attorney believes that you are no longer capable of managing your own affairs. As a safeguard, notice must be served on you and your next of kin prior to your EPA being registered. Should you or your next of kin feel that you are still capable of managing your own affairs, you may object to registration at that time.

Is it expensive?

Creating an EPA is relatively inexpensive. And you should bear in mind that if you lose capacity without having made an EPA, your next of kin or carer may need to make an application to the High Court to be appointed as a ‘Controller’ instead. As with all court applications, this is a more expensive procedure that is best avoided. Controllers are subject to the continuing scrutiny of the court and must submit annual accounts for approval together with payment of an annual court fee. In practice, neither of these obligations apply to attorneys acting under an EPA.

What about Lasting Powers of Attorney?

In England & Wales, EPAs have been replaced with ‘Lasting Powers of Attorney’ (LPAs), which enable people to appoint attorneys both in relation to their financial affairs and ‘health and welfare’ issues such as those around medical treatment and long-term care.

Northern Ireland is due to follow suit as a new Mental Capacity Act was introduced in March 2016, but this has yet to be implemented. Any EPAs made now will still be valid even after the act comes into operation as, unlike in England & Wales, they are being retained alongside LPAs for the time being.

Michael Graham TEP is Head of the Private Client Department at Cleaver Fulton Rankin, Belfast, Northern Ireland