Tax and Financial Planning

    New Guidance on Care Home Charges After Death

    It is a stressful and unhappy enough time when a loved one dies, but the anguish of those mourning the loss can be compounded when there are complications over payments to care homes which seem excessive.

    Recently, the Competition and Markets Authority (CMA) conducted a review of the charges made by care homes when a resident dies and it has now issued guidance on what charges are permissible. This follows the decision that the estates of residents of care homes run by a major care home group who moved in after October 2015 and then died will receive compensation for the 'community fees' paid in advance, which were not refunded by the group.

    The main change is that under the new rules care homes will not be able to charge residential fees or accommodation charges after the death of a resident for (normally) more than three days or for no more than ten days if the resident's possessions are kept in the room after death (unless an extension is requested by the deceased's representative in writing).

    In practice, many residential care home fees are paid in advance, so the usual situation will be that a refund is due to the estate.

    The CMA has also recently begun an enquiry into the cost of 'pre-pay' funeral arrangements.

    The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.

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