25 April 2024

Do I need to sell my home to pay for residential care?

By Kieran Athow, Associate Solicitor, Hayes + Storr.

A common concern for certain clients and their families is the prospect of having to sell the family home to pay for care costs.

The current rules

If you require care, then the local authority will undertake a means assessment to determine whether or not you qualify for funding support. As part of the means assessment, you must declare your income and capital assets. Capital assets include, but are not limited to, savings, investments and property.

If the capital value of your assets is over £23,250 then you would be considered ‘self-funding’ and you would need to pay for your care costs. If your capital is between £14,250 and £23,250, then the local authority may contribute to the costs of your care. If your capital is less than £14,250, then whilst you may be required to contribute to the costs of care from your income, the local authority would typically pay the remaining costs of your care.

The rules surrounding local authority funded care may be changing as of October 2025. However, until the proposed changes come into force, the current funding rules apply.

Will my home be included in a means assessment?

Your home would not typically be included as your capital in any means assessment if it relates to funding for care and support at home, or if you were to go into a care home on a short term/temporary basis. However, if you move into permanent residential care, then your home would typically be considered unless the local authority agree to disregard the property. A mandatory disregard would typically apply in circumstances including but not limited to; if your property is still occupied by your spouse/partner as their main or only home, by a relative who is over 60 years of age, a relative who is disabled, or your child – if they are under the age of 18 years of age.

Further, your property may be disregarded for the first 12 weeks after you become a permanent care home resident, which gives you and your family time to consider what to do with the property.

If your property is taken into consideration and you have insufficient other assets to pay for your care, then you could avoid the need to sell the property by entering into a DPA (deferred payment agreement) with the local authority, which may result in a charge being placed on your property. A DPA could last until you die, after which the costs will be paid from your estate, or could be a temporary arrangement to give you time to sell your home when you choose to do so.

It is important to note that if you gift your home to your children or into trust during your lifetime, the local authority could deem that the gift was a ‘deliberate deprivation’ of your assets for the purposes of avoiding paying for care. If so, then the local authority may treat the (then gifted) property as forming part of your notional capital during any means assessment. Legal advice should be taken if you are considering gifting your property during your lifetime to avoid care costs.

How can we help?

We can provide tailored advice relating to all aspects of care costs, including confirmation as to whether your property should be included in any means assessment.

For further information, please contact Kieran Athow on 01328 863231 or email kieran.athow@hayes-storr.com.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.