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The NHS will pay for the full-time nursing care of someone who suffers from, for example, cancer. But it might not pay for the full-time care for an aged person suffering from Alzheimer's disease.
Such is the muddled way in which the state helps - or, more crucially, doesn't help - old people meet the costs of long term care. There are insurance policies available if you want to make sure that you're not going to have to rely on the government for help with care in old age. But the state benefits that do exist, although they may be complicated, are a part of our entitlement as taxpaying citizens. And they might be able to ease the burden of care costs substantially. They are certainly worth taking into account before you commit to an expensive long term care insurance policy.
Start with the central government benefits. First of all, anyone with a low income and little capital is entitled to income support. This is a means-tested benefit and to qualify you need to have less than £8,000 of savings if you live at home. If you go into residential care, however, you're allowed to have £16,000 of savings. At most the income support payments would come to just over £180 per week - still far short of the £250-350 per week cost of residential care.
More important is the attendance allowance, a non-means-tested benefit which is paid to over-65s at rate of £52.95 for those needing full-time care, and £35.40 per week for those needing less intensive care. This benefit could be a major help if you are paying your own way in a private home; however, you won't qualify for it if you are in a local authority-run home.
Help from your local authority is purely means-tested. To start with, you'll have to get your local social services to assess the level of care you require. It may be that you just need a little domestic help for short periods each day or you may need to move into a home where you'll have full-time nursing care. After the assessment, the local authority will conduct a means test. The first rule applied is the £16,000 savings rule.
If you have more capital than this you won't be eligible for any help at all from your local authority. The authority has some discretion in deciding whether or not to include the value of your home when it tots up your capital. If, for instance, a spouse or other elderly relative will continue to live in the home, the value of the property will not be counted. If you have less than £16,000, the authority next looks at your weekly income: up to a limit, it will pay the difference between your weekly income and the cost of the care you require, as well as leaving you a personal allowance of just under £15.
The Benefits Agency (0800 882 200), your local authority and the charity Age Concern (0800 009 966) are all sources of further information. But any financial adviser worth his salt should be able to talk you through what you will and will not be able to get, too.
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