Q My wife and I are considering downsizing to move nearer to our daughter. However, the difference in property values between where we live and where my daughter lives means that we’ll need to take out a small mortgage of around £50,000.
We are easily able to finance the mortgage as we both have private pensions as well as our state pensions. What concerns us is what would happen if one of us required residential long-term care. How would the remaining partner continue to finance the mortgage if the other partner’s pensions were used to pay the care fees? Would the authorities involved take this into proper consideration?
We understand the rules regarding the assessment up to a point and realise the spouse not in care can continue to live in the property. PS
A As you mention in your last line, jointly owned property is not included in the local authority’s financial assessment of someone going into care if the property will be lived in by that person’s partner. So if you went into care but your wife remained in your home, the value of the property would not be included in the means test to determine how much of your care fees you should pay and how much the council should fund. Currently, if you are assessed as having capital of more than £23,250 (excluding any jointly owned property such as your home), you are expected to contribute to the fees.
What may be less well known is what’s known as the “50% private pension and annuity disregard”. What this means is that if you go into a residential care home, you can choose to pass half of any of certain types of income – including private, personal or occupational pension, or retirement annuity – to your partner who will remain living in the property that you jointly own. In your case, you could choose to pass half your total private pensions to your wife.
As well as giving her money to help pay the mortgage, any money you passed to your wife under the “50% disregard” must not be included in the assessment of your finances for the purposes of determining your care home fees which works in your favour. The same rules apply if your wife went into care and you stayed in your jointly owned home. More information is available in Age UK’s factsheet 39 – Paying for care in a home if you have a partner.
