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If you, a family member or friend requires long term care you should firstly check what level of assistance your Local Authority provides. An assessment will be made by Social Services on your exact care needs and your level of income and savings. If your level of income and savings is low your local authority will pay in full or in part your costs of long term care. If you are not entitled to financial aid following assessment you will normally be expected to pay for care fees out of your own income or savings.
If you are under 65 you may be entitled to Disability Living Allowance or if you are over 65 you may be eligible for Attendance Allowance however the care component of these will not be paid if you are receiving assistance with care fees from the local authority. In certain circumstances you may wish to consider releasing equity from the value of your home but this should only be done with qualified financial and legal advice to avoid costly mistakes.
Care Plans can be purchased to finance care fees and offer the following benefits:
Preservation of your capital - if you are paying for care out of your capital you are entering an open ended committment that could leave you with nothing to pass on to your family. By purchasing a Care Plan you receive a regular income for the rest of your life and could ringfence your costs although under certain circumstances you may be required to top up your plan.
Maintaining your partners income - if you receive state assistance for care you will have to undergo a means test on the assumption that joint income is divided equally between you and your partner. This could lead to your partner suffering a reduction in available income.
Choice of Care - by purchasing a Care Plan you have greater choice of care setting since your local authority is unlikely to fund a place in an expensive care home.
The cost of a Care Plan will vary depending on the level of income required, your state of health, age, sex and whether the plan is to pay a fixed or increasing amount.
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