Care homes may become necessary at some point in life, and most elderly know that if they’re financially well-off, they may have to pay entirely for the expensive system.
Some resort to legal means to avoid payment, including deprivation of assets, like selling their house. But is this even practical? Is it legal to deprive oneself of money to self-portray as not having substantial savings to pay?
In what cases is deprivation of assets deliberate?
What Is Deliberate Deprivation of Assets?
Deliberate deprivation of assets is a planned reduction of assets to incur lower care home costs. Your local authority will judge whether you’re guilty based on when the asset was sold or given away or why you had to deprive yourself of it.
For instance, if at the time you sold or gave away your asset, you knew you’d need care soon, the local authority would be less accommodating.
Lavish spending that doesn’t match your lifestyle when a move to a care home facility would be imminent will also likely put you in the red zone.
However, deprivation doesn’t always suggest deliberate deprivation. Every case is different and there may have been a legitimate reason for the disposal.
Supporting documents and explanations are key to understanding the bigger picture. For instance, selling assets to pay off debt is reasonable and shouldn’t be condemned.
A Financial Assessment
Local authorities assess whether you’re eligible for care, the type of care you need, and whether you’re financially capable to pay. You can’t deny payment if it has been declared that you’ll have to fully or partially support your care home fees.
Assessing Deliberate Depreciation
An individual might have other motivations or needs for selling their assets that don’t include dodging care home costs. The local authority is required to make a comprehensive assessment to determine the reasons. For this, two factors need to be analysed:
- What the intention of the seller or disposer was: In case it is found that the property was disposed to avoid payment, the value of said property can be taken into account when assessing financial health.
- Whether they were fit and healthy and wouldn’t have required support shortly when the disposal took place.
If the local authority has decided against you, you can challenge their decision using formal, legal methods. You’ll need a financial advisor or lawyer to help you build your case.
What’s Considered A Deprivation Of Assets?
Capital can be transferred in numerous ways, some of which are listed below:
- A sudden extravagant lifestyle like spending money on gambling or luxury vacations
- A significant transfer of money to someone
- Assets transferred into a trust that one can’t repeal
- A lavish and unreasonable spending
- Assets used to buy personal possessions or other items not considered in the financial assessment
- Transferring a property to someone else
However, if you prove your disposal wasn’t deliberate, your case may be considered favorably. For instance, showing expenditure receipts, proving the repayment of debts, and having a trust deed.
Income Deprivation
Income deprivation consists of deliberately depriving oneself of potential sources of income, such as Pension Credit, by giving it away, by not applying for it even if you are eligible, or if you haven’t received it but it’s due.
If deliberate deprivation is found, the local authority may consider it during the financial assessment even if you’re no longer earning.
Consequences
If the local authority suspects a deliberate deprivation of funds, they may take action. Some of the consequences you may incur as a result are:
- The local authority will consider you still possessing the asset if you deliberately tried to deprive yourself of it.
- The local authority is legally bound to continue supporting your case even if deliberate depreciation has been found. However, you’ll be indebted to them.
- Any deliberate transfer of assets will be considered in the financial assessment and liable to be paid for care. This means the new owners must contribute depending on how much they received.
- Falling out with someone you previously transferred assets to may lead to negative consequences for your life and future care. For instance, if you’re still living in the house you gave to someone else, they may ask you to leave.
- Since you no longer own rights to your property, you lose the capacity to generate income from said property by giving it on rent, for instance.
The Local Authority’s Duties Towards You
The local authority shouldn’t withhold any information or advice appropriate to your situation.
If you need a care home, they must be thorough and give examples of the types of support you may be eligible for and where you may find it. They must also explain how the local support system operates and the benefits it provides.
If you don’t have the means to access the care, you should be advised on your way forward.
Legal And Financial Advice
Remember, you can always challenge your local authority if you think they came to an unjust conclusion. They must prove you deprived yourself of your assets to avoid paying care home fees, and at the time of disposal, you were aware that you would need support.
You have every right to submit your evidence. For instance, if you purchased a funeral plan, you can give your reasons. If you disposed of your assets 20 years ago when you couldn’t have expected a future in a care home, you can talk about your health and even show your medical records.
Even if the disposal happened at a critical time when you would have needed care, the local authority can’t make automatic assumptions. They must prove your motivations.
Clearly state your reasons and provide as much documentation as possible to support your words.
However, taking legal action yourself may not be the best way to win the case because you may lack the necessary knowledge. Hiring financial specialists in the field will be better. Talk to us at Oakland Care Group if you have no other way of figuring out your situation. Since we’re in the business, our experts offer the best advice and will discuss your options with you in detail.
