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Home > News > Care Funding Disputes & Deprivation of Assets

Care Funding Disputes & Deprivation of Assets

24 January 2022 | Ken McEwan

Dispute Resolution expert Ken McEwan explains how Local Authority care funding works and what to do if you find yourself facing a LA care funding dispute in relation to deprivation of assets.

What is deprivation of assets?

Deprivation of assets means you have intentionally disposed of assets such as gifting large sums of money, transferring ownership of property or spending excessively, to avoid paying a contribution towards social care services.

In some cases, people alter their estate with a view to protecting family inheritance rights but go about it the wrong way and later find they have broken the rules.

Local Authority funded care

Entitlement to free social care in your old age is means tested (the upper capital limit is set at a mere £23,250) and conflicts often arise between families and Local Authorities concerning allegations that a person in receipt of social care has deliberately decreased their overall assets in order to reduce the amount they are required to contribute.

So, what are the rules?  The most important test that should be applied by the Local Authority, is that they must by reference to the evidence available show that:

  1. The person knew he/she may need care and support in the future when,
  2. The disposal of assets took place.

It is important to note the decision of the Local Authority involves carrying out an evidence-based test, considering both foreseeability and intention. Therefore, the decision is possible to challenge by forensically examining how this test has been applied to the facts.

Care and Support Statutory Guidance

Helpfully, the Government has published guidelines, namely, the Care and Support Statutory Guidance, which contain a number of useful annexes. Annex E, for example, states that deliberate deprivation should not be automatically assumed because there may be valid reasons why assets have been disposed of and the Local Authority are obliged to consider these as a first step. The guidance states:

people should be treated with dignity and respect and be able to spend the money they have saved as they wish… it is important that people pay the contribution to the care costs that they are responsible for… A local authority should ensure that people are not rewarded for trying to avoid paying their assessed contribution.”

The Local authority should consider the following:

  • Was avoiding care and support charges a significant motivation?
  • When the asset was disposed of, was the need for care and support reasonably foreseeable.
  • Did the person reasonably expect there would be a need to contribute to the cost of their care.

The following are examples of deprivation which the Local Authority may consider:

  • Lump sum payments to a third Party.
  • Sudden substantial expenditure incurred suddenly and out of character.
  • The transfer of title deeds.
  • Placing assets in trust.
  • Extravagant living.
  • Purchasing life insurance.

A finding that there has been a deliberate disposal of assets can result in dire consequences, resulting in the levying of care home charges and proceedings being brought against the person currently holding the asset to recover the care fees.

Specialist dispute resolution legal advice

If you are facing a Local Authority dispute over care fees involving claims of deprivation of assets, please get in touch to find out how we can help. To contact Ken McEwan please call 0117 906 9400 or email Alternatively, please complete our contact form.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.

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