Moral Money: our reader wants to know the fairest way of splitting nursing home costs
Dear Moral Money,
My brother (58) lives with my mum (83) in her house. He got divorced nine years ago and moved in with Mum, who has really enjoyed having his company and the regular contact it encourages with her grandchild and great grandchildren.
They both feel blessed they had each other in lockdown, and my brother has been instrumental in getting Mum active on social media, streaming her entertainment (she loves The Crown) and online shopping.
I believe they split the bills for running the house 50/50, but my brother is effectively living rent-free.
He did pay for an upgrade to the shared kitchen, and had the downstairs loo converted into a shower room so Mum has access to everything she needs on one floor as she finds the stairs challenging these days.
Mum gets just over £30,000 a year in pension income thanks to part of Dad’s pension continuing after he died, but she doesn’t have a lot else apart from the house.
I live with my young adult children just around the corner and we see each other several times a week.
Unfortunately, Mum has suffered a chest infection on top of her lung condition (COPD), lost her appetite and taken to her bed. She is becoming more frail by the day and we are considering our options.
My brother and I work, and do not feel we can provide enough care for her on an ongoing basis now she is bed-bound.
The temporary care arrangements need converting into a sustainable solution. Mum has made it clear which nursing home she prefers and there would be a significant ongoing cost above her pension – the cost is almost twice her income.
What I want to know is: should my brother and I pay equally to top-up mum’s care fees given he lives rent-free in her house?
Dear reader,
I am really hoping the power of antibiotics combined with the obvious love of family help your mum recover so she is able to stay at home. But pragmatically it seems you are expecting a growing amount of care to be the more likely direction of travel.
This is a situation I have not had to face personally as my parents, both in their 80s, are thankfully living independent, healthy lives so far. I have, however, helped clients navigate similar circumstances.
It is emotionally challenging, as well as being a financial minefield. I encourage you to take a moment to realise this is a big transition, and you should be kind to yourselves and each other.
It seems as though your mum is electing to self-fund the care of her choice and that the value of her home disqualifies her from local authority care funding. You haven’t said how much the house is worth, but it sounds substantial from your description.
Once someone has more than £23,250 in assets they are required to use their own wealth to fund care shortfalls not covered by their own income and, in any event, the “eligible needs” criteria that local authorities fund may not stretch to the care your mum has chosen for herself.
There are some instances where a home is not part of the local authority financial assessment. It is possible your brother may be able to claim a “beneficial interest” in the property given he has financed some substantial property maintenance and it has been his home for nine years.
However, we are back to the fact that even if you get the local authority to agree your mum is entitled to care funding (because the value of the house is disregarded from the financial assessment), I suspect any funding will fall short of covering the cost of first choice. So there is likely to be a top-up fee needed, and you and your brother are in the hot-seat.
I have no information about your or your brother’s ability to pay, but you did say you were both working so I am assuming it is an option that you have income and savings you could utilise.
I am going to turn my attention to your question about whether, given he lives rent-free in your mother’s home, you and your brother have an equal financial responsibility toward covering any shortfall.
There are a couple of ways to look at this; financial and personal. From a financial perspective it might be easy to say that if he wants to continue living in the house without paying rent then he should pay her care fee top-up. The alternative being the house is sold and the proceeds used instead.
However, if your brother being there means the house is disregarded from the local authority financial assessment it could vastly increase the local authority’s contribution to your mother’s care.
There is also the fact that the property seems to have been improved during your brother’s tenure, and at his expense, which is likely to reflect in its overall value.
You have not mentioned additional siblings, so I am assuming just you and your brother stand to inherit from your mum. If this inheritance is shared equally then you will benefit from your brother’s maintenance of your mother’s house.
Do you and your brother earn similar amounts? Should some degree of proportionate affordability feature as part of the arrangements?
This could then allow for the fact that although he has what seems to be fairly cheap living arrangements, these are about to go up substantially as he becomes fully responsible for the cost of maintaining the house he has been sharing with your mum.
You mention having a young adult family and your own home. I am guessing you feel financially committed, and that your brother may have less commitment. It would certainly be reasonable to have this discussion and see if you can negotiate an affordable solution for you both.
He may surprise you with a generous offer to contribute more than you expected. My advice whenever entering into this sort of discussion is to go in curious. Seek to understand the other person’s views. Listen to how they formulated their ideas and opinions on what seems fair – we all have very different ideas about money, and we can’t all be right.
The personal aspect of this dilemma is substantial. You describe how your mum’s quality of life benefitted from having your brother live with her. Maybe he has already contributed more than he could possibly benefit?
It is too easy in family dynamics for some things to appear unfair because we are all limited to our own unique perspective. Talk to your brother about this transition. Find out how he views it. Does he want to stay in the house?
If he doesn’t want to stay can he be persuaded to, if this would protect its value from inclusion in care funding assessment?
If he is to stay in residence how will the cost of your mother’s care be provisioned? I think there is a risk in the way you posed your question that you victimise yourself, when actually your brother having a potential beneficial interest may turn out to be financially beneficial to you both and needs to be factored into the discussion.
I am sure that as a family you can find a solution, and that supporting your mother and each other though this change is going to be more important than anything else long term, but I also think you need a good old chat and a financial plan for a fair and sustainable outcome. Then again, I would say that as a chartered financial planner – it’s my job!