The UK has experienced a sharp increase in the number of individuals living in care homes as a result of an ageing population. Whether you are embarking on this process for the first time, or have already had experience in this area, it is important that professional assistance is sought in order to ensure that, when applying for partial funding, your financial affairs are in an appropriate state to provide the most cost-effective solution. This article will provide a general overview on the increasingly popular ‘deprivation of assets’ trend along with discussing the potential risks with such a scheme.
One of the primary contributors to the cost of care is the local authority. Their contribution is provided depending on the size of the individual’s assessable capital, often referred to as the ‘savings limit’. In order to be eligible for this contribution, the individual’s upper savings limit must be less than £21,500. The Deprivation of Assets process occurs when the family of an individual move assets away from the individual’s estate in the hope that these will be excluded from any local authority means test if they ever needed to enter a care home. As a result, the individual’s estate is better protected for inheritance purposes and means a better standard of care home can be afforded through ‘top up’ fees.
This scheme is not without its difficulties however. When assessing an individual’s eligibility for partial funding, the local authority will now look for evidence of a deliberate deprivation of assets. This will include looking back at transfers made before the individual required care in the first place. The Charging for Residential Accommodation Guide states that avoiding care does not have to the only motive behind a deprivation, but must at least be significant enough reason. If the local authority decides that an individual deliberately deprived themselves of assets, it will treat the individual as having assets equal to that of the value transferred and thus, they will no longer be eligible for partial funding.
Professional assistance should therefore be sought when considering a deprivation of assets to help advise you of your rights and responsibilities in law. At Seatons, our team of highly trained solicitors have a wealth of experience dealing with Residential Care Fees and provide clear, easy to understand legal advice at low sensible fees. For more information, feel free to give us a call on 01536 276300.