Selling your home is one of the most commonly used methods by seniors when paying for care homes. Sometimes, even the local authority can force a sale of the home to help cater for the fees. But what if your home is jointly owned? Will you still be required to work out a plan to sell the home, and can the local authority force a sale on the house to pay for care home fees?
Will my jointly owned property be included in the means test?
If you’re having challenges paying for the care home care fees, reaching out to the local authority for assistance is the next best thing. However, during the means test, the house is usually included.
In the case of a jointly owned property, if your partner is still living in the property, it will not be included in the property.
Why not also read: Types of Care Homes
But if you’re separated or divorced but still living together, the house will be included in the means test unless there is a child who is lives in the house or a relative who is 60 years or older, or a disabled relative. The person being cared for must live in the property for it to be excluded from the means test.
Your jointly owned property will also not be assessed if you’re moving to the care home temporarily or if you will be receiving care from home.
If you no longer live with your partner, the local authority considers that you have equal shares if the mortgage is fully paid. That means you will assess for half the value of the house. If the shares are unequal, then the asset is calculated accordingly.
Will my partner continue living in our jointly-owned property?
Your partner will continue living in the jointly-owned property as long as it is not included in the means test. If the house is included in the means test, it’s better to consider alternative accommodation for your partner.
In events where the house is included in the means test, there is a 12-week disregard from the time you enter into the care home. During this time, the value of the house is not considered for your care home fees. Within this period, you can place the home on the market or obtain a landlord’s license and rent out the unit.
Another solution when a jointly owned home is included in the means test is to apply for a deferred payment agreement. Under this arrangement, the local authority can take the money owed to them when you sell the house.
You can delay using the asset to pay for your care home fees, usually until after death. But you have to pay administration fees for this, and not everyone is eligible for a DPA. You can check with your local authority. If you qualify, it’s a great opportunity because the interest does not accrue over time. It allows your partner to keep the house longer as they come up with alternative solutions.
Can we give our home to our children to avoid selling it?
A home is one of the most valuable assets you can have. Most people have a problem selling it and believe that signing the deed over to their children can help to avoid paying inheritance tax and also reduce your chances of self-funding for your care home fees.
You’re well within your rights to give away your home. But this can be seen as deliberate deprivation of assets by the local authority, in which case, they still count the property as part of your assets even though you can’t use it now.
You should also be cautious about handing over the house to another person. If the person is not willing to sell the house, later on, to cover your care home fees, they are within their rights, and this might deprive you of the much-needed funds to pay for your care.
You should keep in mind that if the property is worth more than £325,000, you have to survive for at least seven years after signing it over for it not to account as part of your taxable estate.
A jointly-owned home complicates the aspect of disposing or selling the house, especially if only one of the occupants is moving to a care home. If the other occupant is above 60 years old, or there is a minor that leaves in the house, it is much easier.
For instances where both parties are adults, the local authority will assess your share of the house. If you don’t want your partner to lose the house, you can consider other methods of paying for home care fees like self-funding, or if you’re in dire long-term medical need, you can consider NHS funding, which doesn’t require a means test.
If you have income streams like a pension scheme or investments, these can also help to pay for your care home fees.