Paying for housing with care

Friday, 07 August 2009

Housing with care for the elderly can involve a number of different things that need to be paid for, not each of which is immediately obvious, but each of which costs money, so it can be difficult to work out the total costs. There can be private accommodation, use of shared facilities and access to a number of services. All but the most well-off people need to understand the costs involved and work out how best they are going to pay for what they need to maintain a good quality of life.

Local authorities and housing associations have led the way for housing with care – more often than not for retired people – with rental accommodation, but things are beginning to change, with a move towards a mix of tenures, including rent, purchase and part purchase.

Of course, purchase prices vary, but tend to range from £100,000 to £300,000 for a one bedroom property. Rentals have a wide spread, from around £250 to £800 for a one-bedroom property. Part purchase is also known as shared ownership, meaning, for example, buying 50% of the property and paying half the rent.

An equity release may also be taken at the time of purchase, and this can help people to afford the property itself or assist with other costs like service charges.

Monthly service charges are ongoing. These can include a fixed charge and supplementary charges. Fixed charges cover underlying services such as management, cleaning, maintenance, day-to-day care and support. Supplementary charges will be added for items such as social or recreational facilities and restaurant meals. They would also be a charge for domestic assistance and personal care by on-site staff. It is impossible to give an estimate of these charges here, but you should seek itemised billing so that you can clearly see what you are paying for.

As housing with care can be expensive it is important to get the finances right. Many current retired people have equity in their home, but a low income. An Independent Financial Advisor or a Benefits Advisor can prove very useful in these circumstances. One state benefit available to people in care housing is attendance allowance, for older people who need daily care. It is not means tested and the amount paid is dependent upon the level of need.


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