How the State is overcharging families for long-term care

Thousands of people do not get the state benefits they have a legal right to when they find themselves in need of personal or nursing care.

The Commission for Social Care Inspection this week warned that local authorities are now wrongly denying support to all but the most needy. As a result, many elderly people are forced to sell their homes to pay care-home fees, or to ask their families to pick up the bill when they should not have to.

The report was published days after Mike Pearce, a retired detective, successfully won more than £50,000 in compensation for his 84-year-old mother, after she was wrongly forced to sell her home to pay for care fees. A court ruled that the complex nature of her nursing needs meant that she should always have qualified for full state support.

Mrs Pearce was fortunate enough to have a tenacious son. However, long-term care experts warn that many people are unaware they are missing out, as cash-strapped local authorities and primary care trusts do everything they can to save money. In some cases, families are being cheated out of six-figure sums.

WHAT WILL THE STATE PAY FOR?

There are two types of long-term care. The first is personal care, which covers help with basic daily activities such as cooking and cleaning. Second is nursing care, which covers medical assistance. Local authorities are responsible for assessing claims for help with personal care, while primary care trusts (which used to be local health authorities) deal with nursing care.

In England, the state should pay for some of your personal care needs if you have assets worth less than £21,000 and all your care needs if you have less than £12,750. In Wales, the thresholds are slightly higher, while in Scotland, the state will pick up the bill for personal care regardless of means - up to a maximum of £145 a week.

Remember that, while local authorities can take your house into account when carrying out a means test, they can't if it is jointly owned with a relative.

Nursing care allowance is paid in three bands - at either £40, £83 or £133 a week - depending on the complexity of your medical needs, but not on your assets. However, if you are in need of almost constant medical supervision, the state should pick up the entire bill for your nursing care - this element is known as NHS Continuing Care.

However, there are problems with the way needs are assessed. Many PCTs fail to award Continuing Care grants to those who are entitled to them (as happened in the case of Mrs Pearce).

All people in need of assistance are also entitled to Attendance Allowance (or Disability Living Allowance if you are under 65), paid at around £40 a week for those with basic care needs and £60 a week for those who are in need of round-the-clock attention.

WHAT IF MY CARE-HOME BILLS EXCEED MY BENEFITS?

If you have assets of more than about £21,000 - and don't qualify for Continuing Care - you will have to pick up the remaining bill for your care costs yourself. However, as soon as your assets fall below £12,750, the local authority should be paying for everything.

This is often where problems begin. Care-home bills have risen sharply and local authorities are often unwilling to pay to keep you at the care home of your choice. They may insist on you moving to a cheaper home.

One of the best ways to avoid this is to use the assets you have before you go into care, to buy an immediate needs annuity. These often pay very good rates, and give you the stability of a guaranteed income for the rest of your life.

SHOULD I BEGIN PLANNING FOR LONG-TERM CARE WHILE I'M YOUNG?

One in four British people will end up in need of care. Unfortunately, most people give no thought to the matter until the moment they are in need. Phil Spiers of the Nursing Home Fees Agency says one big problem here is that the Government is too afraid to admit to people that they may need to take responsibilities for their care fees in old age. It continues to insist that the state will pay for most, while failing to pay out the correct benefits to many thousands of people.

There are now very few products that specifically provide financial planning for long-term care. Take specialist financial advice, but one way to plan ahead is to leave the equity in your home untouched, so that you can call on this if necessary.

How to appeal against illegal care decisions

* Owain Wright of Saga's Care Funding Advice Service says taking specialist advice remains the best first step to discovering what care you should be receiving. Services offered by the likes of Saga (0800 056 6101) and the NHFA ((0800 998833) will give you free guidance.

* If you think you or a relative are entitled to a higher band of nursing care than is being paid, you must begin by appealing to your Primary Care Trust (PCT). If the decision is not changed, you can then refer your case to the Health Ombudsman ( www.ombudsman.gov.uk), who has the power to force PCTs to reconsider decisions.

* The process is similar with local authorities. If you fail to win an appeal in the tribunal, your next move is to the Local Government Ombudsman ( www.lgo.org.uk). In both cases, the courts are the last resort.