A POLICY that was flawed from the start, it came as no surprise that within the recently-published comprehensive spending review, plans were announced for a consultation on social care for the elderly and disabled.
While this will ultimately lead to a green paper looking at the key issues and options for reform, the current legislation will remain with us for some time yet.
There are no guarantees of what the reforms will be or any financial assistance pa
ckage for the elderly, but it is widely expected that the previous blunt pencil will be sharpened significantly if a new policy is going to remain with us for the longer term.
Currently, the cost of long-term care is far from cheap. Despite the Community Care and Health (Scotland) Act 2002 being billed as "free care for the elderly", it only introduced free personal care at home and this is subject to availability. The Scottish average for care in a nursing home is more than £440 per week, which is over £22,800 per year. Most people are entitled to a flat rate of £145 per week from the state once they become resident in a care home, with an extra £65 for those residents who require nursing care. This falls far short in meeting the total cost of care home fees.
Additional financial support is available, but this is means-tested and only benefits the very poor.
If the total value of your assets is over £20,000 you will not be entitled to any additional support. Essentially, the cost of funding nursing care will rest heavily on your own shoulders.
Clearly, anyone in Scotland who owns their own home will fail to gain any additional financial support and this has led to many considering giving their property, and other assets, to their children or other family members.
This may seem a logical approach in attempting to preserve wealth for future generations. But deliberately divesting assets, especially your own home, is generally something that does not lie comfortably with the authorities.
Gifting of assets can be considered although timing is of the essence. Sadly, many only contemplate such a course of action after an event that is likely to trigger the need for future care.
Over the next two years, we will continue the pain of the current legislation but will the Scottish Government find a cure that isn't going to cost an arm and a leg?
• Jason Hemmings is a director at Albannach Financial Management
