If you, or a loved one, are struggling to manage at home, the thought of getting some kind of care can be stressful, not least because of the costs involved. You may think you can gift or dispose of assets to reduce the amount you need to pay for care.

It is important to be aware that you cannot deliberately avoid paying for care home fees. People requiring care and support should expect to fund their own care if they have the means to do so or they are not eligible for NHS continuing healthcare funding.

What is deliberate deprivation of assets/capital?

It is extremely important to be aware that the local authority can treat you as still possessing assessable capital, assets or income if they believe you or your attorney has deprived you of that capital or income in order to reduce your liability to pay for care fees. 

If this is done, it is known as a deliberate deprivation. If the local authority believes this has occurred, they will not accept responsibility for the payment of care fees. They will treat you as if you still own the asset that has been disposed of.

The care and support statutory guidance is clear that it is important that people pay their fair contribution towards their care and support costs. However, the Care Act understands that people with care and support needs are free to spend their income and assets as they see fit, and that this is important for promoting their wellbeing and enabling them to live fulfilling and independent lives. The Care Act is also clear that people must retain sufficient assets and income to meet the cost of their care.

Deliberate deprivation will have occurred where:

• somebody has intentionally deprived themselves of assets or income in order to reduce the amount they are charged towards their care, and
• they were well aware they were in need of care and support but have reduced their assets in order to reduce their contribution.

Unfortunately, it is up to that person, their attorney or deputy, or family to prove to the local authority that the gift or disposal of the asset was not to avoid the payment of care fees. As this can sometimes be extremely difficult to prove, it is very important that the disposal of any asset or income is considered carefully and legal advice sought if there are any concerns.

What will the local authority do if you are caught?

As it is up to the individual to prove that they no longer possess the asset and that it was not a deliberate deprivation, the local authority will refuse to fund care. It will be up to that person to recover the value of the asset from the person to whom it was transferred to avoid Social Services initiating proceedings.

The local authority may initiate proceedings against the resident or their attorney, safeguarding investigations against family members who helped or benefited from the gift/transfer. They may also apply to the Court of Protection to remove/displace an attorney or deputy who was involved with or benefited from the gift/transfer and who is otherwise, in the opinion of Social Services, not using the residents’ money appropriately for the purpose of paying care fees.

How do home and savings affect what you pay?

The level of assets you have will determine the level of funding available to you. Social Services will fund social care needs when a person has less than £23,250 in capital assets.

There are a number of assets that will be disregarded to pay for care. For example, your property if it is occupied by a qualifying resident, life assurance bonds and, occasionally, foreign property where there is evidence of unsuccessful attempts to sell the foreign property over a number of years. The care and support statutory guidance gives many examples of disregarding assets and income. Your legal advisor will be able to help you consider whether you possess assets that can be disregarded under the rules.

It is important to be aware that the local authority has a duty to charge a person with social care needs who has savings above the threshold of £23,250. If you are in the fortunate position to possess significant assets, you will at least have the comfort of knowing that the quality of the accommodation and care you will receive will be what you would wish for in your old age.

This will avoid you being at the mercy of the local authority who have limited funds and are unlikely to be able to fund expensive accommodation unless you have an eligible need to be there. You should carefully consider this before any decisions are made.

Do you need help and advice with funding issues?

Our advice is to speak to a lawyer about funding to avoid any risk of deliberate deprivation and to consider carefully estate planning and gifting depending on your future requirements and wishes.

To find out more about care funding and whether you may be eligible for it, contact our Funding Care Team who will be happy to help.