Islanders are being advised to take advice from experts before making decisions regarding the funding of their own long-term care.
According to lawyers from Babbé LLP, it is likely that potential changes to the way the island’s Long-Term Care Insurance Scheme is funded will result in islanders seeking to amend their financial arrangements.
Amélie Boudra, an associate in the firm’s Wills and Estates team, said that any significant changes should be discussed with a qualified legal and/or financial advisor: “The States of Guernsey have, in recent years, consistently raised long-term care funding as a difficult issue for the island to solve. In 2020 there were proposals to change the way islanders’ long-term care was funded, and the most significant aspect of these proposals for many pensioners was the possibility of having the value of their property taken into account in the assessment of their resources and their ability to contribute to the funding of their long-term care.
“While proposals to take into account the value of pensioners’ homes were not agreed, the States are still investigating what changes need to be made and a new report published this month shows that funding long term care is still an urgent, complex and emotive issue”.
The reports published by the States show that the balance of the Long-term Care Fund, which is designed to assist with the costs of care in private nursing and residential homes, will fall to zero in 2053.
“Faced once more with potential changes to the way assets are assessed in relation to later-life care, it is tempting for property owners to seek alternative arrangements, for instance by passing down wealth to their children early rather than after their death,” said Amélie.
“However these are not decisions that should be made without expert advice. It is important to understand the full implications of gifting away assets and to strike the right balance between benefiting younger generations if that is desired, and protecting the assets one may need or want to use during their lifetime and particularly at a time when they are more vulnerable and have complex needs.
“It is also important to understand that rules to avoid “intentional deprivation of assets” may be strengthened or amended if the scheme changes. Broadly, this may mean that property given away prior to an application may still be included in the means-tested assessment for income support. This is the case in England and Jersey where applicants to long-term care funding risk seeing a property gifted to relatives prior to an application still counted in their assessment if the gift was made with the intention of making themselves eligible for income support.
“Above all, it is important for people interested in reviewing their financial affairs in light of the proposed changes, to obtain independent legal and/or financial advice tailored to their particular situation in order to achieve their goals”.
