A parent going into care

Before anything else: powers of attorney

A lasting power of attorney has to be made while your parent still has mental capacity. Once they don't, the option is gone and the alternative is applying to the Court of Protection — slower, more expensive, and more intrusive.

There are two types and both matter:

• Property and financial affairs — managing money, paying care fees, dealing with the house
• Health and welfare — decisions about care and treatment

If your parent has capacity and no LPA, this is the single most useful thing you can do this month. It takes weeks to register, and the need for it usually arrives without warning.

Who pays

Care is means-tested, and the thresholds are lower than most people expect.

Above an upper capital limit, your parent pays the full cost themselves. Below a lower limit, the local authority meets it, with income still contributing. Between the two, there's a tariff income calculation.

The capital thresholds are set nationally and change, so check the current figures on gov.uk rather than relying on remembered numbers. What matters more is what counts as capital.

The home is included if your parent moves permanently into residential care, unless a qualifying relative still lives there — a spouse or partner, a relative over 60, a relative who is disabled, or a child under 18. That exception is significant and often applies.

The home is not counted at all for care provided in their own home.

There's a 12-week disregard at the start of permanent residential care, during which the property's value is ignored, giving time to make arrangements rather than sell in a hurry.

Two things that are free and underclaimed

Attendance Allowance is not means-tested and doesn't depend on income or savings. It's for people over State Pension age who need help with personal care, and a very large number of eligible people never claim it. It's worth applying for regardless of the wider financial picture.

NHS Continuing Healthcare funds the full cost of care, including accommodation, where someone's needs are primarily health-related rather than social. It's assessed rather than means-tested, the assessment process is notoriously difficult, and it's refused more often than it should be. If your parent has significant medical needs, ask for an assessment and don't accept a refusal to assess.

Paying without selling the house immediately

A deferred payment agreement lets the local authority pay the fees and recover them later from the estate, with the property as security. It avoids a forced sale, though interest and charges apply.

Renting the property out can cover part of the fees while retaining the asset, with the rent counted as income.

An immediate needs annuity — sometimes called a care fees annuity — converts a lump sum into a guaranteed income paid directly to the care provider for life. Paid to a registered provider, it's tax-free. It removes the risk of the money running out, which is the risk families most fear, and the cost depends on health and life expectancy. It's a specialist product and worth advice, but it's genuinely the answer for some families.

Gifting the house is not the solution

The instinct to transfer the house to children before care is needed is common, and it doesn't work the way people hope.

Local authorities can assess someone as still owning assets they've given away, under the deprivation of assets rules. There's no fixed time limit on how far back they can look. What matters is whether avoiding care fees was a significant motivation, and the timing and circumstances of the gift.

It also creates other problems: capital gains tax for the children, the house being exposed to their divorces and creditors, and inheritance tax issues if your parent continues living there rent-free.

Genuine estate planning done years in advance for genuine reasons is a different matter — see Inheritance and estate planning. Transferring the house when care is on the horizon is unlikely to achieve what's intended.

Self-funders pay more

An uncomfortable feature worth knowing: care homes typically charge self-funding residents more than local authorities pay for the same room. Self-funders are effectively subsidising the shortfall in council rates.

Two practical consequences. If your parent's money runs down to the threshold, the local authority may only fund up to its own rate, and a top-up fee from family may be required to stay in the same home. Choosing a home that would accept local authority rates later avoids a forced move at a bad moment. It's worth asking that question at the outset.

Practical steps

Request a care needs assessment from the local authority. Everyone is entitled to one regardless of means, and it's the gateway to everything else.

Then a financial assessment to establish who pays what.

Gather the full financial picture — accounts, pensions, investments, property, and any gifts made in recent years, because those will be asked about.

And check what other income exists. Pension Credit, Council Tax reductions and other entitlements are commonly unclaimed by people who assume they wouldn't qualify.

Looking after yourself in this

Family carers routinely reduce their hours or leave work, and the long-term cost to their own pension and earnings is substantial and rarely counted. Carer's Allowance and, importantly, National Insurance credits for carers exist — the credits protect your own State Pension, and they're worth claiming even where the allowance itself isn't payable.

This page is for general education only and isn't personal advice. Care funding rules, thresholds and entitlements change and vary between the nations of the UK — check the current position for your parent's area.