Deliberate deprivation of assets

Deliberate deprivation of assets

| Published on October 23, 2018

Anyone with capital assets over the amount of £23,250 is expected to meet the costs of their own care.

Costs can differ depending on the care home and facilities, but it is not uncommon to see costs ranging from £750 to £1,000 per week for residential care.

Local Authorities (LAs) have a statutory duty to charge a resident for care home fees where they are able to pay.

Generally, this means that all of a person’s income will be taken into account and, where income is insufficient, capital will also be taken into account until the minimum limit of £23,250 is reached at which point a more reduced tariff system is introduced.

It is common for people to be concerned about their assets. Most have spent years working hard to provide for families and secure a future. Unfortunately, partly due to an ageing population and the squeeze on the public purse, care costs have become a significant issue.

We are often asked if it is possible to give away assets, such as property, and continue to have use of it, for example living in the property. Gifting an asset in an attempt to avoid inclusion in an assessment for care costs is treated as ‘deliberate deprivation’ and LAs are very familiar with it.

In order to prove that deliberate deprivation has taken place the LA will need to demonstrate that avoiding the charge to care was a significant motivation. This can be illustrated by the reasons that the gift was made, timing of the gift and whether the resident had, at that time, a reasonable expectation that they may require state assistance to meet care costs.

If the LA can prove that a resident has gifted an asset to avoid care fees, then they are able to take action. This may include setting aside the gift or treating the resident as still retaining the asset for assessment purposes.

Every case must be judged on its own facts, and an action that could be considered deliberate deprivation in one case may not be in another. All will depend on circumstances, intention and timing.

In an age of austerity it is common for LAs to consider financial assessments in detail and investigate the value of a potential resident’s estate.

We can advise you on the question of making appropriate gifts in certain circumstances. If you have made a gift and are concerned if you may have deliberately deprived yourself of an asset we can assist by liaising with LAs to rectify such issues, acting on your behalf to ensure the best outcome.

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