The Facts Regarding the Deprivation of Your Assets

There is a wide range of costs associated with providing long term care, some of which include paying for a care home. This applies if you or your loved one plans on receiving their care in a residential setting. However, it is not just residential fees that can pile up. In fact, you can expect to have fees associated with nursing care, caregivers, home adaptations, and mobility aids. Even though there are several fees to pay and the numbers can seem quite daunting, there is some financial help available, if you qualify. The local authority provides means tested help with paying for care. The NHS also provides some funding for continuing healthcare and then there is also registered nursing care funding available. This nursing care funding is based on a needs test and also has some criteria in order to qualify.

For means testing, income and capital are taken into account. This information is gathered in an effort to help determine if you are eligible for any financial assistance with your care costs. There are limits to how much you can have available in capital, assets, and income and still qualify for help. The current upper threshold for England and Wales is £23,250, and in Scotland this number is £24,750. Those individuals with combined assets above this level are expected to self-fund their long term care. When your financial situation is being assessed, any regular income will be counted. This could include pension credits as well. There are some forms of income that are not counted during the means test. These include things such as disability allowance and carers’ allowance. In terms of capital, any savings, investments, and property will be counted in your assessment. If you have a property that is jointly owned, ‘beneficial value’ of the property to the individual is worked out and considered for the means test.

Reduction in your assets prior to a means test by way of gifts, investment and spending will reflect in the outcome of the assessment. This kind of gifting away of assets prior to an assessment can be monitored. If any reduction in your assets before a means test appears to be done deliberately in order in an attempt to qualify for more help, it is known as deprivation of assets. Should you be found to have gifted away a large amount of your assets prior to your assessment, you will need to be prepared to explain the reason behind that gifting. The authorities will consider all aspects of the disposal of assets, including reasoning and timing, while they are conducting and evaluating the means test.

If the local authorities suspect that deprivation of assets has taken place, they can treat the missing assets as if they still exist and make an assessment accordingly. That means that if you have deliberately gifted away your assets in an attempt to fall below the threshold line and qualify for financial assistance, the authorities may choose to still include those assets in your assessment, even though they are no longer in your possession. In order for those assets to still be included in your assessment, authorities have to prove that avoiding care charges was a significant part of the disposal. Furthermore, the timing of the transfer is crucial in determining if those assets will still be counted. If you could have at all foreseen that you would need care in the near future and disposed of your assets, those assets could still be counted. However, if you were fit and healthy and would have had no one of knowing that you would need accommodations in a care home, those assets are not likely to be included in your assessment. The authorities can look as far back as they like in order to determine timing and motive, although any spending or gifts that have taken place while in good health without the prospect of care cannot be considered. Conversely, any gifting that takes place after poor health was discovered can be considered and assessed.

Any assets suspected of being deprived before the means test will be considered as notional capital. This notional capital is considered as reducing each month as though it were being used to pay for long term care. When it reaches the upper threshold of the means test, the local council can then start to contribute towards the cost of care.

Rules on deprivation of assets in long term care funding have been put in place to prevent abuse of the system. Each case is different, and deprivation of assets is as much a matter of common sense as it is of rules. To understand deprivation of assets rules in your own individual context especially as it relates to location within the UK, it may be useful to seek independent advice. Charitable organisations run information help lines for matters related to long term care funding.