The Local Government and Social Care Ombudsman has issued guidance to Local Authorities in England when making decisions on whether a person has deliberately deprived themselves of assets to avoid the care fees means test when paying social or residential care.
What is Deprivation of Assets?
You have deliberately deprived yourself of your money, assets, or wealth to avoid this being including in any care fees means testing of funding. This is when:
- You are already in care.
- There is a reasonable expectation of you needing social care in the future.
When are gifts not considered a deprivation of assets?
- You make the gift when you are healthy, or the gift was made a long time before you had an immediate care need, or an expectation of care needed in the future.
- You are giving tax free money away to reduce any inheritance tax liability.
- You make financial gifts to help family members that are in financial difficulty.
New Guidance Issued to Local Authorities in England Making Care Fees Assessments
When local authorities are councils are making an assessment, they cannot automatically assume a gift has been made a deliberate deprivation of assets, they must consider:
- How much money or wealth you have when the gift was made.
- The size of the gift relative to your overall wealth.
- The purpose of the gift e.g., birthdays, Christmas, anniversaries, or other special events such as a wedding or a newly born child.
- Is there a historic pattern of similar gifts of similar size.
- Your life expectancy when the gift was made and thus funds to pay for care to life expectancy.
- The local authority must decide on whether there was a deliberate deprivation of assets based upon what is a reasonable expectation when making such gifts.
What if a Gift is Deemed to be Deprivation of Assets?
The local authority can ask the person in receipt of the gift to contribute towards the costs of social care.
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