Deprivation of assets

If a client needs care, they will be subject to a financial assessment. This will determine if they've sufficient assets or income to pay for their care, or whether they qualify for local authority funding. 

Deprivation of assets occurs when someone intentionally reduces their assets to make the financial assessment more favourable. When a local authority considers whether there is a deliberate deprivation of assets, they'll address two questions:

  • Would the person have known at the time they reduced their assets they needed care?
  • Was the need for care a key motivation behind the decision to reduce their assets?

Examples that might be viewed with concern include:

  • giving away a significant amount of money
  • the title deeds of a property being transferred to someone else
  • spending significant amounts in a way which is contrary to normal expenditure (such as expensive holidays)
  • using savings to buy goods that are excluded from the means test (jewellery, for example) 

If a local authority is concerned that assets have been reduced intentionally to avoid care fees, they may still include the value of the assets in the means test.

Examples of deprivation

Where deprivation may not have occurred

Max has moved into a care home and has a 50% interest in a property that continues to be occupied by his civil partner, David.

The value of the property is disregarded while David lives there, but he decides to move to a smaller property that he can better manage and sells their shared home to fund this.

When the property is sold, Max’s 50% share of the proceeds could be taken into account in the financial assessment. But to ensure that David can buy the smaller property, Max makes part of his share of the sale’s proceeds available. 

In such circumstances, it may not be reasonable to treat Max as having deprived himself of capital to reduce his care home charges.

Where deprivation of assets may be considered

Margaret has £18,000 in a building society and uses £10,500 to purchase a car.

Two weeks later she enters a care home and gives the car to her daughter Julie.

If Margaret knew when she purchased the car that she would be moving to a care home, then deprivation could be considered.  However, all the circumstances must be taken into account.

So if Margaret was admitted as an emergency and had no reason to think she may need care and support when she purchased the car, this might not be considered as deprivation.

Useful sites

We've selected a range of articles and further information on deprivation of assets.

Information researched and accurate 21 June 2019. Not to be relied upon by advisers or their clients.