Deliberate deprivation of assets is where you have intentionally decreased your overall assets, or the assets of a person that you are acting for under a Power of Attorney/Deputyship, to avoid paying the full cost of care and support.
It is extremely important to be aware that the local authority can treat you as still possessing this assessable capital, assets or income and if the local authority believe deprivation has occurred, they will not accept responsibility for the payment of care fees. They will treat you or the person whose affairs you are managing 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. The Care Act does however understand 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.
There may of course occasionally be other reasons for disposing of eligible assets such as paying off a secured debt, but it is important to be aware that the local authority may investigate, and you will need to provide evidence of the historical debt for any financial assessment required.
Unfortunately, it is up to that person, their attorney or deputy, or family to prove to the local authority that any gift or disposal of assets 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.
It is up to the individual to prove that they no longer possess the asset and that it was not deliberate deprivation, and if this cannot be done 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 person or their attorney, and/or carry out 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 person’s money appropriately for the purpose of paying care fees.
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 give 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.
The local authority has a duty to charge a person with social care needs who has savings above the threshold of £23,250. If, however, you are in the fortunate position to possess 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. Having assets will avoid you being at the mercy of the local authority, who have limited funds, and who are unlikely to ever be in a position to fund expensive accommodation unless you have an eligible need that requires this.
The possibility that you may have to fund a package of care some time in the future is now becoming more and more common and it is therefore important to consider this when making financial decisions and planning for the future.
Our experienced Private Client Solicitors can help you through the process and answer all of your questions. Whatever your requirements, Porter Dodson are here to help.