SCOTLAND'S elderly population is rising fast. Official statistics reveal the population of pensionable age will have grown by nearly a third to 1.34 million from an overall population of 5.54 million by 2033.
The number of over-75s in Scotland will rise from 390,000 to 720,000 by then, an 84 per cent increase.
This troubling trend has led to predictions that 40 per cent of school-leavers would have to enter the care sector to meet projected demand, an
d a record number of hospitals would have to be built.
The Scottish Government has announced that provision for elderly care will have to be redesigned, with the likelihood of care homes being provided only for those requiring specialist services and respite and more treatment being offered at home, supported by new technology.
While this is very much a future proposal, the fact that we are living longer is reason not to put off making decisions and planning ahead for the long-term care of elderly relatives. It is important to know where to start when considering long-term care and what funding is available.
Care for the elderly is a hot topic on both sides of the Border. Free personal and nursing care was introduced in Scotland in July 2002 following the Royal Commission into funding of long-term care of the elderly in 1999. That policy was reviewed in the Sutherland Report of April 2008 and the recommendations have yet to be implemented. In England the two main political parties – Labour and the Conservatives – have suggested a one-off "premium" ranging from £8,000 to £20,000 payable at age 65 to guarantee a waiver of all fees for residential care.
In Scotland, the cost of care home provision is met from various sources. The first point of contact would be the local council, which will work out how much the client must pay towards the cost of their care. Care costs are broken down into personal care, accommodation and nursing costs. Financial assessments will depend on savings and other assets held by an individual, including any property clients may own. Any income received will also be part of the assessment process.
Such means-testing repeatedly causes confusion, as the savings limit usually goes up in April of each year. Currently (2009-2010) those who have capital and income over £22,500 will have to pay the accommodation costs in full. Capital of less than £13,750 is not taken into account and those who have investments, property and savings valued between these amounts will have to make some contribution on a sliding scale.
Help with the cost of nursing and personal care is available but depends on need. If, for example, the local council agrees there is a need for personal care, a subsidy of £153 per week would be paid. If nursing care is also needed, £222 would be awarded for both.
The local council has substantial discretion in how it addresses each case and the award is not necessarily immediate and may well be delayed for several weeks.
It is estimated that, in the past decade, more than 70,000 people in the UK have had to sell their homes to finance their care.
Many in the older generation are understandably looking at ways to gift their property to relatives to avoid losing it to accommodation costs. They should note, though, local councils can investigate such "deliberate" gifts and subsequently seek a financial contribution.
Alternatively, before selling the property, it is important to investigate other options: for example, using a pension or other investments to fund care.
Legal considerations are always a sensitive issue, and can be a major hurdle without sensible planning. Although it is important at any age to ensure financial affairs are in order, it is essential that steps are taken to assist elderly relatives to ensure they are secure in the knowledge their affairs are organised. This will provide peace of mind and assist in reducing expense and delay in the future.
A power of attorney offers comfort and peace of mind that, if the worst happens, contingencies are in place. In Scotland there are two types of power of attorney: a continuing power and a welfare power.
The former enables a nominated person to look after another person's financial or business affairs. The latter covers more personal matters of welfare such as medical treatment.
Many elderly people come from a generation which valued personal pride and did not like to talk about such issues.
But procrastination is no response. It is vital all options are properly considered in talks with family and legal and financial advisers. The future can become much clearer when options are discussed before decisions are made.
Douglas Hunter is a partner at HBJ Gateley Wareing