Does equity release affect care funding in Wales?

Savings, investments, most property other than the home you live in, and any lump sum you have released and not yet spent. A lump sum from a lifetime mortgage counts as capital from the point you receive it, the same as money from any other source. A residential care assessment can also bring the value of the home you live in into account, unless a qualifying relative such as a spouse or partner still lives there; a non-residential assessment does not look at that home at all.

Which nation you live in decides it. The assessment is carried out by the local authority covering where your main home is, and it applies that nation's own capital limits and regulations, whatever part of the UK your adviser, mortgage lender or solicitor happens to be in. A Welsh resident is assessed under the Care and Support (Charging) (Wales) Regulations 2015 and the £50,000 and £24,000 limits that come with them. Moving your main home across the border is what changes which rules apply. Who arranges your lifetime mortgage plays no part in it.

No. £50,000 is the limit for permanent residential care. Home care, direct payments and other non-residential support in Wales are assessed separately against a £24,000 capital limit, and the most you can be charged for that kind of support is capped at £100 a week regardless of your income or capital. The kind of care involved has to be identified before either figure can be applied to a particular case, and a person can move between the two during their life, starting with home care under the £24,000 limit and later needing a care home assessed against the £50,000 figure. Each move is assessed afresh against the limit that applies to the care being provided at the time.

They are separate tests under separate law. The capital limits covered here come from social care legislation and decide whether you pay for care from your own funds or receive a means-tested contribution. Pension Credit and other benefits use a different rule, covered on our page on whether equity release affects your benefits, where every £500 of savings above £10,000 counts as £1 a week of deemed income. A lump sum from equity release can affect one, both or neither.

How much of it you still hold as capital on the day of an assessment. The figure you started with does not decide it by itself. Spending part of a release on a specific need, repaying debt, or taking it through a drawdown facility in stages instead of as one lump sum all change your assessable capital differently. The local authority looks at your capital at the time it carries out the assessment, so the effect of a release depends on what is left of it by then and on everything else you hold.

It reduces the value of your home, which matters mainly for a residential care assessment where the home itself can be taken into account. It does not reduce cash you are holding separately as a result of the release, which is assessed as capital in its own right, whatever is owed against the property it came from. How a particular local authority weighs the mortgage balance against the property's value, and at what point in the assessment it does so, is worth confirming with it directly, because practice is not identical between the 22 local authorities in Wales or between those and England's.

Which nation's limit applies follows where your main home is, so moving house across the border changes it. Holding a bank account in a different nation does not. Moving house is a significant decision in its own right, with its own costs and its own property tax rules, and a local authority looking at a move made shortly before needing care may ask why it happened. It is not a step to take only to change which capital limit applies.