The short answer: You can't be forced to sell your home
A local authority cannot legally compel you to sell your home during your lifetime to cover residential care fees. However, if you require long-term residential care, the value of your property is generally considered a capital asset in a financial assessment (means test). If your assets exceed the upper capital limit (currently £23,250 in England), you're expected to fund your own care, and your property's value may be used for this. While you won't be physically forced out, you may need to arrange a sale or use a Deferred Payment Agreement to manage your bills.
The financial assessment explained
A financial assessment determines your contribution to care costs by reviewing your income and capital, including property. Property is typically included in the assessment for permanent care but is disregarded for care at home or temporary care.
Mandatory property disregards
Your home's value must be disregarded if certain people still live there. This includes your spouse or civil partner, an unmarried or same-sex partner, a relative over 60 or incapacitated, or a child under 18 for whom you are responsible.
What happens during the 12-week property disregard?
If you move into permanent care and your property is included in the assessment, its value is disregarded for the first 12 weeks. This period allows time to arrange funding, such as selling the property or setting up a Deferred Payment Agreement.
Your alternatives to selling your house
The most common alternative to selling your home is a Deferred Payment Agreement (DPA).
Deferred Payment Agreement (DPA)
A DPA is an agreement with your local council to pay an agreed part of your care fees, with the debt secured against your property. This is repaid later, usually after your death, from the property sale proceeds. Interest is charged on the loan. DPAs are typically for those entering permanent residential care whose property value is assessed.
Other options to consider
Other possibilities include renting out your property to contribute to fees, using other savings or assets, or exploring equity release for those over 55, though this requires professional advice due to its complexities.
The risks of deprivation of assets
Giving away assets like property to avoid care fees is called 'deprivation of assets'. Councils can investigate such actions and treat you as still owning the assets if the transfer was intentional. There is no time limit on this. If found to have deprived yourself of assets, you may still be liable for fees, and the recipient could be pursued for the money.
Comparing care funding options
| Feature | Self-Funding (Non-Property) | Deferred Payment Agreement (DPA) | Property Sale | Deprivation of Assets |
|---|---|---|---|---|
| Initial Capital | Sufficient savings/investments. | Insufficient liquid capital. | Insufficient liquid capital. | Intentionally reduced capital. |
| Property Included | Value not considered if sufficient other funds exist. | Secured by a legal charge on your property. | Value included in the financial assessment. | Property value included as if still owned. |
| Control | Full control over your assets. | Council pays, but you repay later. | Sells on your terms, if desired. | Lose control of your assets. |
| Timing | Immediate payment from your own funds. | Delay sale until death or other trigger. | Immediate or delayed sale. | Challenged by the local authority, possibly with legal action. |
| Repayment | No repayment necessary. | Debt plus interest repaid upon sale/death. | Upfront payment to cover costs. | Could face legal action and have fees backdated. |
Conclusion: Informed planning is key
While local authorities cannot force the sale of a house for care fees, the property's value is a key factor in financial assessments for permanent residential care. You will likely need to use its value to pay, even if not through a forced sale. Proactive financial planning, exploring options like DPAs, and seeking expert advice are essential for protecting assets and arranging appropriate care.
For further information on financial assessments and paying for care, refer to Age UK's comprehensive guide.
