How to Pay For Care – Veteran Support:
As another, albeit different, Remembrance Sunday passed, we were mindful of the debt we owe to those who have served. And with the current situation, we’re more aware than ever of financial hardship. As such, how to pay for care will undoubtedly be posing a problem for many people. But it’s a problem many of our veterans were facing on a daily basis even before the pandemic hit. So, we wanted to take the opportunity to discuss what you should know about how to pay for care; and what veteran support there is under the Forces MoneyPlan scheme.
First things first – the ‘Healthcare’ and ‘Social care’ divide
‘Health care’ and ‘social care’ are often thought of interchangeably. But, when it comes to determining the availability of financial support, they are treated very differently. So, it’s important to establish where you stand when it comes to how to pay for care.
‘Healthcare’ is represented by the NHS – and is freely given at the point of need. In comparison, ‘social care’ is the responsibility of local authorities. As such, the expectation is that those who can pay should pay for their social care.
What it means for veterans
Many veterans, including those with dementia (!), are expected to pay for their own social care. Costs can often be in excess of £1000 per week for even a reasonable quality residential/nursing home. So, it doesn’t take long before life-savings become depleted, or selling the family home becomes the only option.
The news is equally worrying for those requiring social care support to fund their place at a care home, or for care to be provided at home. The means test assesses ‘eligible capital and income’ (aka, how much you’re worth!) to determine what, if any, local authority support you can have.
Veterans living in England with capital of £23,250 or more, are expected to pay for their social care costs. That is, until their money falls below this level. At that time, their remaining capital and income will be taken into account to determine their ability to pay.
As veterans, some capital and income are disregarded from the ‘means test’ including:
Guaranteed income payments
made to veterans under the
Armed Forces Compensation
War Pension Scheme
payments made to veterans
except for Constant Attendance Payments
The first £10 per week
of War Widows and War
War widows and widowers
The value of any ex-gratia
payments made post 01/02/2001
due to a person’s internment by
the Japanese during the WWII.
A gallantry award such as
the Victoria Cross Annuity
or George Cross Annuity
When do the authorities step in?
Veteran support is limited. In fact, many veterans end up paying for their social care costs out of their own income. They find themselves liquidating capital assets, including property, as they go along until all their money has gone.
This is usually the point when the local authority will step in. But, you should be aware that they generally only pay the care provider a set local authority rate. This is typically below the amount that care providers charge self-funders. So, if the care home that someone is in when they run out of money has no local authority places available, then they will need to find the additional funds to pay for their place.
‘How to pay for care?’ then often becomes a question that friends or family have to address by paying the difference. But, if no such solution is available, the person may have to move to another care home, possibly in a less than ideal location, and with all of the upheaval and distress that comes with it.
What can be done to avoid the possibility of running out of money?
As with all financial matters, arming yourself with knowledge is half the battle! So finding out what veteran support is out there is essential. The first thing to appreciate is that there are many ways to answer the ‘how to pay for care’ question. And to prove it, we’re going to describe two of them here:
Since April 2015 (following the introduction of the Care Act 2014), local authorities in England are required, subject to eligibility criteria, to offer a loan to meet care costs. This is secured on the home of an individual in care, at a fixed rate of interest. Repayment of this loan is deferred until a later date, such as the death of the person in care.
A much-underused means of payment comes in the form of the ‘Immediate Needs Care Annuity.’ This is an insurance policy offered by specialist insurers. It works in much the same way as an annuity in retirement does. So, in return for a one-off set premium, the policy pays a regular income. This is intended to cover an individual’s care costs for the rest of their life.
So, why is solution two so under-used? The simple answer is that only a regulated financial adviser who has passed a designated exam can help. Not many people have a relationship with such an adviser, or even know where to find one!
Well, look no further!
We are proud to give pro-bono guidance via Forces MoneyPlan.
And we have the qualification required to provide this much needed veteran support!
So, if you would like to speak to us about Forces MoneyPlan, do give us a call. We’d be happy to help!
Want to Speak to a Financial Adviser?
As always, if you would like to speak to one of our reputable, independent financial advisers, please do call us on 01243 767 469. Alternatively, you can email us from our contact page, and an adviser will be in touch.
Written by Steve Burns
Steve is a chartered financial planner who has been with Lewis Brownlee for over 20 years, who now heads up Lewis Brownlee Financial Services. Under his directorship, the firm has established itself as a specialist provider of professional, informed and impartial advice.