Products
What type of people take out Immediate and Deferred Care Plans?
These plans are taken out by people who are about to enter a care home and want to make some provision for taking care of the cost. Partnership Care Plans provide some reassurance, for both the care home and the person needing care, that a guaranteed regular income will be paid for a person’s care for the rest of their life.
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Is a Care Plan guaranteed to cover care costs?
No – you will be told the annual income it is guaranteed to pay out so you can match this against a care home’s fees. Should fees rise in the future there may be a shortfall. However, care homes may be open to negotiation, knowing they are assured of the income. Our Care Plans offer inflation-proofing or annual increases to help address rising fees.
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Can income from a care plan be used to fund care at home?
Yes – income can be used at any stage to fund either residential or home-based care.
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How much does a care plan cost?
Our Care Plans are taylored to the individual and therefore the cost will depend on personal circumstances, such as health as well as how much you need to cover the care fees once any pensions, benefits and other income has been taken into account. However, as a guide, the average cost of a Care Plan is around £85,000. This is a one off cost that guarantees you an income to pay for care regardless of how long it is required.
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Why are Partnership's Care Plans good value?
Many people underestimate how long they will spend in care and therefore do not make adequate provision to pay for it, often relying on their savings or funds from the sale of a property. The unfortunate result can be that people can very quickly run out of money and have to rely on the Local Authority for help - and there is no guarantee the services and facilities you want will be able to be maintained. Care Plans provide the reassurance that an income will be paid to help cover the cost of care for the remainder of life, regardless of how long that may be. And, because Partnership underwrites each case individually, you can receive a much better level of income than might be offered elsewhere.
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What happens if care is no longer required after taking out either an Immediate Care or Deferred Care Plan?
If care is no longer required, the Plan can be converted to a standard annuity (comprising an income and a capital element) and you would be liable for tax on the income element. If you decide to do this, you will be able to convert it back to a care annuity to pay a registered care provider at a later date, if required.
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If I die early into the plan will any capital be returned?
If you die in the first six months of taking out a Care Plan, a percentage of the capital you invest will be returned to your estate / beneficiaries. That percentage depends on how far into the six month period death occurs. Any income paid will be deducted from the capital amount returned. If you select the Capital Protection or Capital Protection Plus options when you take out your Immediate Care Plan, you will be able to protect a specified percentage of the amount you paid when purchasing the product.
Capital Protection is a decreasing term assurance policy that protects up to 75% of the plan purchase price and pays out any amount remaining to the client’s estate or beneficiaries, if they die during the policy term.
Capital Protection Plus is a whole of life insurance policy that pays out a specified amount to the client’s estate or beneficiaries on their death, regardless of when that occurs.
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Process
Is a medical required?
A medical examination is not required for the Immediate and Deferred Care Plans.
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Are there health restrictions?
There are no health restrictions when purchasing an Immediate or Deferred Care Plan
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How do I apply?
You (or a Power of Attorney if you have one) should speak to your Financial Adviser in the first instance. Find a suitably qualified Adviser in your area.
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Property
Our parents own their home jointly and have around £30,000 in savings. My father needs to go into nursing care but my mother wants to remain at home. Can we be forced to sell the property to pay for Dad’s care?
No. So long as your mother continues to live in it, the property won’t be included in the means test for care funding. However half of their joint savings will be. With £15,000 in assets, your father is above the lower
capital limit of £14,000 and will be expected to make a contribution of £4 a week towards the cost of his care.
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My widowed father needs to go into care now. He doesn’t qualify for local authority funding but the property slump means it may take months to sell his bungalow to help with costs. What can we do?
The local authority must disregard the property from the cost of care for the first 12 weeks. If the property is still not sold after this time, the authorities will still continue to pay costs but will look to recoup these against the proceeds from the property when it is finally sold. Make sure your father claims Attendance Allowance to help with the cost of care.
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Can we put our house in trust for our children to avoid a forced sale in the event that we need to go into care?
Putting property in trust for future generations is a complex issue because the Inland Revenue is keen to prevent people trying to avoid inheritance tax, so legal advice is essential. Under the means test, your local authority may ask about your property ownership over some years. If it deems property was placed in trust deliberately to take it out of the means test, it may still be included. Plus, the means test upper threshold is low (currently £23,000) so other assets could disqualify you from support in any case.
My sister and I have lived together for 20 years and are now in our early 80s. What will happen to our property if one or both of us needs to go into care?
The property will be disregarded from the care funding means test when the first of you goes into care. If the second needs care, the value of the property can then be included. If the property then needs to be sold to help with the cost of fees, the local authority may help with funding intil the property is sold. Should you both need to go into care at the same time, half the property's value will be allocated to each of you for the means test.
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Benefits and Support
Does having a care plan affect any means-tested benefits that I am entitled to?
Before anyone goes into care, a means-tested benefit assessment should be carried out by their local authority to identify any benefit that they should be receiving and any shortfall that may exist. It is important to note that any income being received may effect eligibility for grants and allowances.
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We have paid for my mother to be in a nursing home for three years. Her condition has now deteriorated and she requires round-the-clock care. Can we get any more support?
You can ask that your mother is reassessed by the NHS. If she is in need of 24-hour nursing, the NHS should pay for all of this as ‘continuing care’.
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My parents own their home and have £80,000 in savings. Will they get any financial help with the cost of care?
Their assets put them well above the threshold of £23,000 per person at which help is given with funding care. However, if they need help with basic daily tasks such as bathing and dressing they can claim for the Attendance Allowance – worth up to £70.35 a week personal care allowance in Scotland. If they require nursing, their local authority will pay a Registered Nursing Care Contribution (RNCC). It’s important to discuss with care homes how the RNCC is accounted for in their fees.
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My mother is quite wealthy. Is her local authority under any obligation help her find the right kind of care?
Yes – the local authority has a duty to assess her care needs and ensure she has access to suitable care, even if she funds it.
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Taxation
We have sold my father’s house to help with his nursing home costs. Are the proceeds still liable for inheritance tax?
If the capital is simply held in his bank account then it can be included in his estate for inheritance tax purposes on death. If the capital is used to purchase a Care Plan to fund care, then it may be ‘lifted’ out of his estate. If inheritance tax is a major concern for the family, speak to an accountant or Financial Adviser who specialises in estate planning.
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I want to use income from some of my investments to help pay for my father’s care. If he is the beneficiary, who will the income be taxed on?
If the investments are in your name, they will continue to be taxed at your rate of income tax. It may be possible to set up a trust, naming your father as beneficiary of income but this may mean losing rights to the assets. Trusts can be complex so it’s advisable to talk to a solicitor. Also, be aware that any income or capital you pay to your father may be included in the means test for care funding.
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Power of attorney
Can I set up a Lasting Power of Attorney and still control my own affairs?
Absolutely. Your attorneys would only take control if you lose mental capacity – and you can include a restriction to this effect in the Lasting Power of Attorney document. Conversely you can stipulate that your attorneys can act on your behalf while you are still mentally sound, if you wish.
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Can an attorney change my Will?
No. They can only see your Will if you give them permission to and cannot change anything in it without permission from the Court.
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Can I cancel a Lasting Power of Attorney?
You can cancel or amend a Lasting Power of Attorney at any time before it is registered. Once registered, you must give notice to the Office of the Public Guardian. You cannot cancel a Lasting Power of Attorney once you lose mental capacity, although a third party can complain to the Court if concerned your affairs are not being dealt with properly.
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I have made a Living Will. How would a Lasting Power of Attorney work with this?
A Living Will is a legally-binding document that enables you to specify when life-sustaining medical treatment should be withheld. A Living Will usually takes priority over a Lasting Power of Attorney so it’s important to discuss your wishes with your appointed attorneys.
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Who should I inform about the Lasting Power of Attorney?
It is advisable to provide anyone who might have to act under the Lasting Power of Attorney with a solicitor’s certified copy of the Lasting Power of Attorney document. This could include your bank and your GP.
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What happens if an attorney dies after I lose mental capacity?
If you have appointed your attorneys to act together, the Lasting Power of Attorney will lose validity if one of them dies, becomes bankrupt or incapacitated. The solution is to nominate substitutes or request that attorneys can act ‘together and independently’
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Can I choose which attorney handles what?
You can stipulate various restrictions or conditions in the Lasting Power of Attorney document. You can also appoint different attorneys for your personal health and welfare Lasting Power of Attorney and a property and financial affairs Lasting Power of Attorney.
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