8: Long-Term Care Insurance Pt. 1 Flashcards
(40 cards)
When is long-term care required?
When a person becomes ill or suffers a disability that makes them unable to carry our their activities of daily living (ADLs), with a probability that this disability will continue over the long term.
What is the most common form of mental impairment in the elderly?
Dementia
The FCA defines long-term care insurance as a policy that provides what?
…financial support when a policyholder can no longer live independently due to deteriorating health.
Who decides how much funding is available through state benefits, and what severity of need is required to become eligible for long-term care?
Local authorities
Who is responsible for paying long-term care costs in a residential care home due to illness or old age?
Some costs are covered by the State, but if you have savings, you must pay privately (Care Act 2014).
Who gets free prescription drugs under the NHS?
Free prescriptions are available for those over age 60
When does the NHS pay the full cost of care in a care home?
Only when the resident’s main need for care is health-based—this is known as NHS continuing healthcare.
What is NHS continuing healthcare?
Fully funded care for those whose primary need is health-related, covering the full cost of care home services. This for example, would not include support in daily living mainly because of loneliness or a lack of support.
Individuals assessed as needing nursing care in a nursing home are entitled to receive an additional nursing care allowance, known as what?
NHS-funded nursing care
NHS-funded nursing care. Is it means tested and what’s the taxation treatment?
Not means tested, tax-free
What is the definition of nursing care in England?
Care given by a registered nurse in providing, planning or supervising someone’s care in a care home with nursing.
Who receives the payment for NHS-funded nursing care?
Payment is made directly to the care home by the local ICB in England.
What is the weekly payment in England for long-term care, and the higher rate for those with high nursing needs established before October 2007?
£235.88 a week, higher rate £324.50 a week.
Where an individual pays their own care fees, what can they claim if they need help with personal care and/or supervision?
Attendance Allowance, as long as they are over state pension age. If not, then possibly Personal Independence Payment (PIP).
What is the taxation treatment on attendance allowance?
Tax-free
What are the two payment levels of Attendance Allowance?
Lower rate is £72.65 a week (care during the day or at
night but not both)
Higher rate (where care is needed during the day and at night) is £108.55 a week
What is respire care?
Provides temporary relief for caregivers by ensuring the person they care for is looked after by someone else. It allows caregivers to take a break, rest, or attend to personal matters.
Margaret lives in a rented house in London and has savings and investments of £15,300. Calculate her tariff income, and explain what this means?
In England, the lower and upper limits for savings are: £14,250 and £23,250.
£15,300 – £14,250 = £1,050 (she is £1,050 over the lower threshold)
£1,050/£250 = £4.20 a week (£1 on every £250 over the threshold).
Her local authority would therefore expect her to pay an additional £5 a week (rounded) towards her care, but will also contribute to her care.
John lives in his own home in Manchester and has £23,000 in savings. His local authority is conducting a means test to assess his contribution towards his care costs. How would his tariff income be calculated, and would the local authority contribute to his care costs?
- Savings: £23,000
- Lower capital limit: £14,250
- Excess savings: £23,000 - £14,250 = £8,750
- Tariff income calculation: £8,750 ÷ £250 = £35 per week
Since John’s savings do not exceed the upper limit, his local authority will contribute towards his care costs, but he will need to pay £35 per week himself.
Sarah lives in rented accommodation in Bristol and has £24,500 in savings. She requires ongoing care and is being assessed by her local authority. How would her tariff income be calculated, and would the local authority contribute to his care costs?
Since Sarah’s savings exceed £23,250 (the upper limit), she would have to pay for the care costs herself.
However, once her savings fall below £23,250, she may become eligible for partial financial support, depending on further assessments. Until then, she would need to cover the full costs herself.
Income and capital needs to be taken into account when determining whether local authorities can assist with the payment of care fees. Such as?
The income fully taken into account includes:
* pension income;
* State and other benefits;
* pension credit;
* trust income;
* income from investments – such as dividends, annuity income and bonuses paid;
* withdrawals from investment bonds, with or without life assurance;
* income from letting (or subletting part of a property which is not part of the living
accommodation); and
* Attendance Allowance.
The local authority takes account of assets, for the purpose of determining whether they, the local authority, can assist with the payment of care fees. Assets such as what?
cash
ISAs
shares, at their market value
property
businesses
pooled investments (unit trusts, investment trusts and OEICs)
What assets are excluded for the purpose of determining whether a local authority can assist with the payment of care fees?
Personal possessions (if not included extravagantly)*
Pensions, but only if little or no income is being withdrawn
Surrender value of life assurance bonds
*The idea is to prevent individuals from spending down their assets irresponsibly to qualify for care funding while still retaining valuable possessions.
When is the value of an individual’s home disregarded in financial assessments for care costs?
If certain individuals are living in the property, such as the resident’s partner, a lone parent who is the claimant’s estranged or divorced partner, or a relative aged 60 or over, under 18, or incapacitated.
