Dementia Support Line
Do you have to sell your home to pay for care in Wales?
Whether a home is taken into consideration in a financial assessment depends on where the person with dementia is receiving care. If the person is living in a care home, their home may be included.
- Paying for care and support in Wales
- What is the care assessment process in Wales?
- Paying for care home fees in Wales
- Paying for dementia care if you have a partner
- You are here: Do you have to sell your home to pay for care in Wales?
If the person is receiving homecare
The value of the person’s home is not counted in their financial assessment if they receive care at home. It should not be used when deciding their contribution towards the cost of this type of care.
How these assessments work is slightly different when paying for care in England or care in Northern Ireland.
If the person is in a care home
The person may be living in a care home, but still own their own home. This may mean that their home value is included in the financial assessment.
There are some situations where this is not the case. In these instances, the home will not be taken into account, even when paying for care home costs. This is when one of the following people who lives in the property will continue to live there after the person has moved into a care home:
- A husband, wife, civil partner or partner.
- A close relative over the age of 60.
- A dependent child.
- A relative who is disabled or incapacitated.
The person’s house might also be the permanent home of someone who has been caring for them, such as a friend. For as long as the carer is living there, the local authority have discretion to decide whether to include the value of the home in the assessment. This is more likely to apply in cases where the carer has given up their own home to care for the person with dementia.
If you do have to sell the person's home
The value of the person’s home should not be taken into account for the first 12 weeks they are permanently living in the care home.
This is called the ‘12-week property disregard’. This may mean that, during this time, the local authority will pay or contribute towards the care home fees.
This grace period can give people time to sell the home, or to speak to the local authority about other options. The property disregard will end if the property sells before the end of the 12-week period. To benefit from the full 12–week property disregard, the local authority must be told before a person becomes a permanent care home resident.
If the home is not sold within 12 weeks, the person may be able to enter into a deferred payment agreement (DPA). In this arrangement, the local authority pay the person’s care home fees for them. Then, when the person sells their home, they must repay the local authority the cost of the care home.
DPAs allow the person to ‘defer’ paying the costs of a care home if they’re not able to sell their home immediately. The local authority loan the money needed to pay the care home fees.
A legal charge, which is a written agreement a bit like a mortgage, is placed on the person’s property. When the debt is repaid – which is usually after the property is sold – the charge is removed.
This may be a temporary arrangement (used as a bridging loan). It could be a long-term arrangement and last until after the person’s death. For instance, this can be used if the person’s carer needs to continue living in the property.
All local authorities must offer a DPA scheme. To be eligible, the local authority must agree the person’s needs are best met in a care home. The person must also have less than £50,000 in capital outside of the value of the home.
Local authorities can refuse to take up an agreement with people in certain circumstances. For example, this can happen if the value of the person’s home isn’t high enough to cover the loan.
The local authority usually charge a fee to set up the DPA, and they may also charge interest on the loan.
A DPA is a complicated financial transaction. The local authority should give the person the advice and support they need before taking part in an agreement with them. MoneyHelper is a website that gives simple advice. This includes information about DPAs and renting.
A person may lack the mental capacity to enter into a DPA. An attorney under a Lasting power of attorney or a deputy would need to do that on their behalf. The attorney or deputy would need to be able to show that the DPA was in the person’s best interests.