Giving Away Assets to Avoid Paying for Care

The decision on whether you should pay for your own care home fees, and how much you should pay, is based on your assets and capital, such as your home, your savings and your investments. More information on this is available in our article Your Contribution to Care Home fees.

In short if you have assets over the value of £21,500 you’ll be expected to pay for your own care. If you have assets worth over £13,000 but less than £21,500 you’ll be expected to pay for part of your care.

So, in order to avoid this payment, or in a bid to pay less, it may be tempting to simply give away money or property to close friends or family, as a gift or early inheritance. Unfortunately it isn’t that simple.

Deprivation of Assets

If you deliberately give away or convert assets to put yourself in a better position to receive financial help from the Local Authority for your care, this is known as deprivation. This includes both giving away assets and deliberately spending large amounts of money immediately prior to the assessment. Deprivation can also include selling off an asset for much less than it is worth.

The Local Authority must prove that any deprivation is deliberate. If you gave away money or went on an extravagant holiday a while ago, before a care home was imminently on the cards, you won’t need to worry.

The council may try to recover any assets they claim you have deliberately deprived either from you, or from the person you gave them to.

Notional Capital

If you are found to have deliberately given away assets or similar, you could well still have to pay towards your care, and this could leave you in a difficult situation. The council may ask you to pay what is known as ‘notional capital’. You will be assessed as having the same amount of notional capital as you have given away, which could be equivalent to the full cost of your care.

Disputing a Deprivation of Assets Decision

If your Local Authority believes you have deliberately deprived yourself of assets to avoid paying for care, but you disagree, you can appeal.

In the first instance you should discuss your case with the Local Authority to see if things can be resolved. If not, the next step is to submit a formal complaint in writing. The Local Authority is obligated to respond within 28 days. If you still disagree with the decision, the matter goes to a review panel. There are three panel members and at least one member must be independent of the Local Authority.

Other Considerations When Giving Away Assets

As well as the legal and financial implications, such as those above, of giving away assets, there are other important issues to consider. This applies even if you are considering giving away assets for a reason other than to avoid paying care costs.

If you pass your home on you may not be able to sell it on later. The person you give any assets to might not agree to sell it when you want to.

If you are thinking about giving away assets for any reason you should always seek professional financial advice beforehand