What is deprivation of assets?

The social care system has been under the spotlight recently, especially during the pandemic. Many people are calling for radical reforms to the way that care is funded.

Currently the system is difficult to navigate. This has led many people choosing to rely on anecdotal information rather than seeking good quality, reliable advice from experts. However relying on information gleaned from the media, or a ‘friend of a friend’, could get you into hot water with your local authorities.

Increasingly we have seen cases where individuals who have been found to have deliberately deprived themselves of assets have been prosecuted by litigious and cash strapped local authorities.

Deprivation of assets occurs when you knowingly give away your wealth or property with the motivation to avoid paying the costs of care.

Examples of deprivation of assets

Below are some examples of deprivation of assets cases which have gone to the Ombudsman. It is clear that authorities will thoroughly investigate the finances of individuals requiring assistance with care fees. They will often go back a number of years.

Example 1

Mrs X suffered a stroke and it was decided that she would require placement in a care home. Mr X claimed he was unable to complete a financial assessment. The local authority agreed to pay Mrs X’s fees whilst Mr X completed the assessment.

Mr X refused to disclose Mrs X’s capital, resulting in the need for her to self-fund. However information later showed that Mrs X had paid for her equipment to aid her recovery (available on the NHS). She was also paying for her share of a new boiler and a second-hand car. It was known that Mrs X was going to need permanent care and that she would need to contribute to the cost of her care when the purchases were made.

The Ombudsman agreed with the local authority that these costs were a deprivation of assets.

Example 2

Mrs Y had lived abroad with her daughter for eight years until early 2020, up until she was 101. Mrs Y had a couple of short stays in care homes during this time abroad. She claimed this money back from the local government .

On returning to the UK in early 2020, Mrs Y applied for funding to help pay for her care home. This was rejected on the grounds that in 2018, Mrs Y gifted  her daughter £101,250, following the sale of her house. Given Mrs Y’s age, and past instances of her needing care, it was predictable that she would need to go into full time care.

The Ombudsman agreed with the local authority that the gift of £101,250 was a deprivation of assets.

Example 3

Mr B is an elderly man with vascular dementia, heart failure, and a history of strokes. Mr B lived at home with his wife, Mrs B. In March 2020, Mr B was moved to a care home. It was concluded that Mr B was eligible for council funding, as his capital was under £23,250.

Following on from a land registry check, it was revealed that Mr and Mrs B had a second home, under Mrs B’s name. It transpired that in 2018, Mr B had gifted Mrs B £44,975, for her to purchase this home for a total price of £89,950. Mrs B claimed that the property was purchased with the intention of using the rent to fund Mr B’s care.

The Ombudsman agreed with the local authority that Mrs B had disclosed the purchase of property in 2018, and that the disposal was made with the intention of reducing care costs.

How we can help

These cases clearly illustrate the need to consult an expert before making an important financial decision that you may later come to regret. We pride ourselves on our ability to help elderly and vulnerable clients with their financial affairs. Our team can help you plan effectively for later life care.

Get in touch with one of our friendly advisers to set up a free initial consultation.