Giving away assets to avoid paying for care
Many families have taken steps to gift properties or capital with no other reason but to put the burden of care fees onto the State.
Their are however, Deliberate Deprivation rules that prevent the giving away of assets and forcing the State to pay the care costs and Local Authorities have the power to recover any sums which it has to pay towards an individual's care costs.
These are examples of what could be considered deliberate deprivation of assets:
- a lump sum payment such as a gift or to
- pay off a debt transferring the title deeds of a property to someone else
- putting money into a trust that cannot be revoked
- converting money into another form that has to be disregarded from the means test, e.g. personal possessions, investment bonds with life insurance
- reducing capital through substantial expenditure on items such as expensive holidays or by extravagant living
It should always be remembered when considering the gifting of an elderly person's assets that they are potentially being put into a position where they may lose financial independence and choice of where they receive care.
Local Authority funding for long term care
You will be assessed by your Local Authority to see if you qualify for long term care funding. The Local Authority may pay for all or some of the costs of your care, depending on how much money you have:
- If your financial assets including property have a total value of less than £14,250, you will qualify for Local Authority funding for long-term care.
- If you have more than £23,250, you will normally be expected to pay for your own care in full.
- If you have between £14,250 and £23,250, you will receive some Local Authority funding.
- You will however be expected to pay £1 a week for every £250 in assets over £14,250 you have. So, if you have assets of £18,250, you would be expected to pay £16 a week (£4,000 = £250 x 16) towards care.
- If you own a property the Local Authority must disregard the value of your home for the first 12 weeks of careNote: that the limits on Local Authority funding for long term care vary, depending on in which part of the country you live.