Chapter 8 - Long Term Care Flashcards
Long term care is typically needed when an individual is unable to carry out a number of activities of daily living (ADL) what are they?
- Bathing and showering
- Personal hygiene and grooming
- Dressing
- Toilet hygiene
- Functional mobility, often referred to as “transferring”, as measured by the ability to walk, get in and out of bed, and get into and out of a chair
- Self-feeding (not including cooking)
What is the personal expense allowance?
Once in care the local authority must leave individual with a weekly amount of income to pay for personal expenses
Over what level of assets would an individual be expected to pay for their own care?
£23,250
Under what level of assets would an individual be entitled to care paid for by the local authority?
£14,250
What is tariff income?
For every £250 of assets between £14,250 and £23,250 the individual is expected to contribute £1 per week to their care
Doris has to go into a nursing home. The non-nursing cost of this is £19,500 per annum. Doris’ net income is £8,050 p.a and she has assets of £16,500.
Tariff income £16,500 - £14,250/250 = £9 per week that she must pay
What is significant about the surrender value of Life Assurance bonds when means testing for long term care?
The are excluded from the calculations. This is because they are classed as life insurance and are excluded for this reason
Under what circumstances is the home not included for means testing purposes?
- Spouse still lives there
- A lone parent who is claimants estranged or divorced partner
- A relative over 60 or a child is living there
How long is the home value disregarded for means testing purposes?
12 weeks
What does deliberate depravation relate to?
An individual intentionally transferring assets out of their estate in an attempt to reduce their assets for means testing purposes.
Under these circumstances then it may still be considered by local authority.
Summarise the key points of an immediate needs care plan?
If an individual needs care immediately then a lump sum can be exchanged for a guaranteed income to pay the care fees.
This is a form of impaired life annuity and can be very expensive.
The income goes direct to the home but if it goes to the individual it is taxed as a purchase life annuity.
Poorer the health the bigger the income as the less time it will be paid out.
Can’t be cancelled ceases on death.
Summarise the key points of an pre funded care plan?
No insurers offer these products currently.
Traditional insurance based was a policy that was taken out before care needed and pays out when can’t complete activities of daily living (ADLs).
Investment linked was where a single premium bond was purchased which aimed to pay for care if needed.
If needed the provider withdraws the care fees from the bond each month. If never needed it does have a surrender value.
Summarise the key points of an equity release plan?
Exchanging some of the equity in a house for a capital sum. Typically appropriate for people with high asset levels but low income.
2 main types
o Lifetime mortgage – release equity from home and is repaid with accrued interest on death or sale of house. Can be interest only or roll up
o Home reversion – sell a portion of the property to a reversion company say 30% they still own 70%. Major restriction is the client would require permission from the reversion company before making any changes to their home.
What is a viatical settlement?
Selling a life policy by a terminally ill person to an intermediary effectively converting a life policy to a critical illness policy.
What are the 2 types of lasting power of attorney?
1) Health and welfare
2) Property and financial affairs
