Watch out for over-charging of care home fees

We live in a country with an ageing population. As a result millions of people rely on care homes to look after them in their final years.

But, care homes are back in the headlines for all the wrong reasons.

Why are they in the news?

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An investigation by the Competition and Markets Authority (CMA) has revealed worrying financial practices in the care home industry. They found that care homes have been taken payments from families for ‘extended periods’ after a resident has died, as well as charging high up-front fees.

The CMA also highlighted problems with the process of choosing a care home and getting someone into one. It is very difficult to compare care homes and understand how the funding system works. On top of this many care home’s use contracts that allow them to evict someone at very short notice.

“Some of the most vulnerable people in our society use care homes, often moving to them under extremely difficult circumstances,” says Andrea Coscelli, acting chief executive of the CMA on LoveMoney.

“It’s therefore essential they are able to make informed choices, understand how services will be paid for, and be confident they will be fairly treated and able to complain effectively if they have any concerns.”

How big is the problem?

The funding of care home places in the UK is a mess. Understanding how much a care home is actually going to cost, combined with calculating how much one is entitled to from the state, is incredibly difficult and many people get it wrong. This isn’t helped by the news care homes may be overcharging.

Specialist law firm Hugh James Nursing Care, revealed this week that it has now recovered over £100m for clients in wrongly paid care home fees.

“All too often, individuals and their families are needlessly forced to sell their homes and other assets or investments to pay for care,” says Lisa Morgan, a partner at Hugh James.

“Our team fight tirelessly to reclaim wrongly paid fees, to give families back what should never have been paid in the first place.”

The CMA investigation couldn’t come at a better time, as the need for care homes is set to explode. The number of people aged over 85 is forecast to double by 2040.

How can you cut the cost?

Self-funders pay an average £36,000 a year for their care home place, that is 43 per cent more than the local authority pays, according to analyst Laing Buisson.

“Self-funders’ fees are used as a form of taxation, subsidising the fees paid by local authorities,” says Joan Mansfield, a former care home inspector who has set up the Care Co-operative, told The Times.

“While local authorities with their purchasing power can negotiate substantial discounts on the cost of care, the self-funder is on their own in any negotiation and has to pay the full fee.”

The Care Co-operative is a network of care homes that have agreed to offer discounts of up to 25 per cent to self-funders who find a place via its website. There are now 50 homes registered on the site from across the UK. There is a one-off joining fee of £19.50.

One member told The Times how the Care Co-operative saved her £2,000 over six months after she managed to get a ten per cent discount from £700 a week to £630 a week on her mother’s care home fees.