Adding an annuity fee payer to a resident profile

10 minutes read

Found supports annuity contributions by enabling you to add a specific annuity company fee payer to resident profiles. This setup automatically deducts the annuity contribution from the private fee payer’s invoice while generating a corresponding positive-value invoice for the annuity provider.

What is an annuity? 

An annuity is a financial product that helps care home residents manage their money during retirement and throughout their stay in care. It works by converting a lump sum—usually from savings or pension funds—into a regular, fixed monthly payment made directly to the care home. These payments can continue for a set number of years, but for most scenarios, for the rest of the resident’s life, and can be used to offset the cost of their care fees.

How do annuity calculations work in Found?

In Found, an annuity is calculated as a fixed monthly deduction that appears on the private fee payer’s invoice each calendar month. This amount is consistent and is calculated by dividing the annuity provider’s annual contribution by 12 and then showing that as a negative value on the private fee payers' invoice and a positive value on the annuity fee payers' invoice. 

In scenarios where the annuity Start Date does not align with the start of the private fee payer’s invoice schedule, or if a resident’s booking does not end the same day the private fee payer's invoice schedule does, the annuity will be calculated on a daily rate instead. In this case, the annual contribution is divided by 365 days (or 366 in a leap year) to determine a pro-rated amount.

Adding a private fee payer

Before you can add an annuity fee payer to a resident's booking, you must first add a private fee payer to the resident profile. This is the individual responsible for covering the resident’s care costs and receiving the annuity deduction on their monthly invoices.

1. Navigate to the resident profile 
2. Go to the Billing tab.
3. Click the Fee Payers tab.
4. Select Add Fee Payer and click Add Private Fee Payer
5. Follow the on-screen instructions to create a private fee payer 

Adding an annuity fee payer 

To add an annuity fee payer, you must first create a company fee payer at the global level and configure it to be available for the relevant care home location(s). This setup allows you to associate the annuity with one or more residents without re-entering the same information each time, streamlining the process.

Once the company fee payer is set up:

1. Navigate to the resident profile 
2. Go to the Billing tab.
3. Click the Annuities tab 
4. Click Add Annuity 

Here’s a breakdown of the fields you’ll need to complete when adding an annuity fee payer to a resident profile:

1. Fee Payer

• Type: Drop-down - Select the specific annuity fee payer based on the available options. 
• Note: If the annuity fee payer isn’t listed, it may not have been created yet or hasn’t been made available for the resident’s location.

2. Care Fee Nominal Code 

• Type: Drop-down - managed at a company level via the Care Fee Nominal Code settings page
• Definition: Choose the nominal code that applies to this booking’s care fees.

3. Fee Payer Reference

• Type: Free text
• Definition: A custom identifier you can assign to the annuity fee payer.
• Note: Validation is in place to prevent duplicate references, and a warning will be associated with the fee payer's profile following its creation.

4. Annual Fee Contribution 

• Type: Numeric (£0 or higher)
• Definition: The annual amount this annuity fee payer is contributing. Please note this is not a weekly amount; if you only have the weekly or monthly amount for the annuity, multiply it by 52 or 12 to work out an annual amount. 

Following the creation of an annuity fee payer, the annuity fee payer will be visible within the annuity tab of the resident profile. You then need to link the annuity fee payer to the private fee payer's invoice schedule. 

Linking an annuity fee payer with a private fee payer's invoice 

To add an annuity to a resident’s invoice schedule:

1. Navigate to the resident’s profile.
2. Go to the Billing tab.
3. Click on Schedule & Contracts.
4. In the Invoice Schedules tile, click Create Invoice Schedule.
5. Select the Private Fee Payer from which the annuity deduction will be made, then click Continue.
6. Choose either New Schedule or Default Schedule.

Important:

Annuities can only be added to invoice schedules that:

• Run on a monthly calendar basis, and
• Have an invoice type of Arrears or Advance.

You cannot add annuities to schedules that are Weekly, Fortnightly, Custom, or have an invoice type of Billable Extras Only.

1. If selecting New Schedules
   1. On page one of the setup, ensure you’ve selected Monthly as the repeat option.
   2. You’ll then see the option to Add Annuity on page two of the invoice schedule setup. 
   3. Here, you can add one or more annuities to the schedule. For scenarios where a resident has a second annuity, make sure you add both. 
   4. When selecting the Start Date, this is the date you want the annuity deduction to begin from the private fee payer’s schedule—it is not the date the resident started their agreement with the annuity provider.
   5. Click Add Annuity to complete.
2. If selecting Default Schedule:
   1. After choosing the default schedule and specifying the Start Date, if the default schedule is monthly, you’ll be given the option to Add Annuity.
   2. Again, you can add one or more annuities. For scenarios where a resident has a second annuity, make sure you add both.
   3. When selecting the Start Date, this is the date you want the annuity deduction to begin from the private fee payer’s schedule—it is not the date the resident started their agreement with the annuity provider.
   4. Click Add Annuity to complete. 
3. Review the schedule details and confirm everything is correct. 

What happens next?

Once the annuity has been created and correctly configured to the private fee payers invoice schedule, two financial documents will be generated under Upcoming Invoices & Credit Notes of the resident profile:

• One for the private fee payer, which typically includes two line items:
  • The care fee line item
  • The annuity deduction line item
• One for the annuity fee payer, which will include a single line item showing the charge billed to the annuity provider.

Use Case Example 

• Resident: Mary Thompson
• Annuity Provider Annual Contribution: £60,000
• Private Fee Payer Invoice Schedule: Monthly 
• Resident Booking Dates: 15th March – 20th May
• Annuity Start Date: 15th March
• Annuity End Date: 20th May

March Invoice (Pro-Rated)

Since the annuity starts mid-month, Found calculates a daily rate:

• Daily Rate = £60,000 ÷ 365 = £164.38/day
• Days covered in March = 17 days (15th–31st)
• Annuity deduction for March = 17 × £164.38 = £2,794.46
• Private Fee Payer Invoice shows –£2,794.46 + the standard care fees
• Annuity Fee Payer Invoice shows +£2,794.46

April Invoice (Standard Monthly Calculation)

Full calendar month, so Found applies the fixed monthly deduction:

• £60,000 ÷ 12 = £5,000/month
• Private Fee Payer Invoice shows –£5,000.00 + the standard care fees 
• Annuity Fee Payer Invoice shows +£5,000.00

May Invoice (Pro-Rated)

Mary’s booking and the annuity end on the 20th, so Found again uses the daily rate:

• Daily Rate = £164.38
• Days covered in May = 1st–20th = 20 days
• Annuity deduction for May = 20 × £164.38 = £3,287.60
• Private Fee Payer Invoice shows –£3,287.60 + the standard care fees 
• Annuity Fee Payer Invoice shows +£3,287.60