When you’re looking towards your future and old age, one of the biggest issues you can face is having the money to pay for residential care or care and support at home. Whatever money you do have will be used towards these costs, but decreasing your collective assets and finances on purpose – a deprivation of assets – to avoid or reduce the amount you can contribute to your care will affect any help you might be entitled to from your local authority. But what is classed as a deprivation of assets?
What is a deprivation of assets?
As part of your Wills and Estate planning, a deprivation of assets means you’ve intentionally reduced your overall assets, whether that’s giving away or selling any property, possessions, capital, or income. If you lower the amount of money you’re able to contribute towards the cost of the care services provided to you by your local council, this is classed as a deprivation of assets.
While it’s common, and quite legal, for anyone to gift a family member any assets at any time during their life, your local council will complete a financial assessment (or means test) to determine if you’re eligible for financial help. If they have reason to believe you deliberately reduced your assets while knowing you’d need care, you won’t qualify.
When is deprivation considered deliberate?
A deliberate deprivation of assets is when you knowingly – and sometimes quickly – reduce your assets and finances to avoid paying for residential care or care and support at home when you know you’ll need it. While disposing of your money will be seen as a deliberate deprivation of assets, a council assessment will also look into any other methods used to reduce your finances. These can include:
- ‘Gifting’ or making large lump-sum payments of money to family members
- Unexpected, unnecessary, or extravagant spending or gambling
- Transferring ownership deeds of your house or other properties to someone else
- Putting your assets into trusts that can’t be reversed or cancelled
- Selling any of your assets for less than their market value
- ‘Hiding’ your wealth by not declaring all your assets
As part of your council assessment, the timing of and motivation behind these transactions will be looked into. During the process, your council will use their discretion and take into account any facts and statements you provide surrounding your decisions.
But, if any of them are suspect or seen to be made at a time when you knew you would or might need care and support in the near future – and you chose to reduce your finances in any way to avoid paying or contributing to those care costs regardless – this would be considered as a deliberate deprivation of assets.
What is not considered a deprivation of assets?
Of course, there will be completely legal and valid reasons why you might want to reduce your assets at any time in your life, such as making lump-sum payments to family members as a gift or transferring the ownership of your property.
It can be common for council assessments to include all instances and allegations of a deprivation of assets, but these can be inaccurate or have mitigating circumstances and there will be exceptions depending on your situation. The council will look at all the details of all asset disposal in any individual case, which can include:
- The length of time since the gift or transfer was made
- The needs of the person the gift or transfer was made to
- The intentions behind making the gift or transfer
- Whether there was an extended pattern of gifting
Can you be prosecuted for deprivation of assets?
The deliberate deprivation of assets is a criminal offence. If your council concludes that any capital, finances, property, or other assets have been deliberately given away or discarded, they will include their value in their assessment, even though you no longer have them.
As a result, even if you need long-term residential or home care, the council can declare you ineligible and refuse to pay for any care costs while also taking action to recover assets. In this case, your council could apply for a county court judgement against you which could result in a hearing at a Magistrate’s Court. However, this will usually be a last resort and they will discuss their intentions and possible options with you first.
What can be more likely in some circumstances is, that if the deprivation of assets has been proven, the council could recover assets that have been transferred to family members. They could also refuse to continue paying for the care.
How far back can deprivation of assets go?
If you’ve gifted, transferred, or disposed of any assets over the years, the time at which you did it is important. There is no time limit to how far back your council can go to check and assess your eligibility for receiving financial help for any residential care or home care and support, so everything will be looked into and taken into account.
But, if you were physically fit and in good mental health at the time of the gift or transfer, with no need or expectation of any care in the foreseeable future, then it wouldn’t be classed as a deprivation of assets.
Deprivation of assets legal advice from MJR Solicitors
Deprivation of assets can be an unfamiliar, daunting, and complicated process to many people. If you or your family are currently facing deprivation of assets claims, it’s crucial to get specialist legal advice as soon as you can.
Our expert team at MJR Solicitors will be able to answer your questions and make sure you’re getting the right information. But importantly, we can help and advise you on whether you can challenge the council’s assessment, liaise with them to try and reduce any debt, and give you the representation you need.
We have the experience to give you the dedicated help and support you need, when you need it – and we’re available for you 24/7. So contact us today, call us on 01243 945 054 or email at firstname.lastname@example.org
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