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Deprivation Of Assets – Social Care Funding

When a person considers transferring the title of their house to someone else, there are many different things to be cautious of, perhaps the most important being the potential argument of deliberate intention to deprive yourself of assets.

When a local authority consider that you have deliberately deprived yourself of assets to avoid care fees, it is essential that your intention at the time of disposal is assessed and that at the time of disposal you had an immediate need for care or it was foreseeable that in the near future care would be necessary. To be successful in Court, the local authority must prove the above.

It is important to note that the avoidance of care fees need not be the main purpose in the gifting of the asset but must be proven to be a significant one.

At the point that the local authority believes that an asset has been given away with the intention of defrauding means tested benefits, then it can decide that the donor (the person who has given away the asset) has notional capital of equivalent value to that of the asset given away. This is known as the second avoidance provision and to be established it has to be proved that the purpose of the gifting was to avoid means testing and essentially increase the level of care you receive without cost.

The Courts generally take the view that the latter is the most important when determining whether deliberate deprivation has occurred. Richards J in Beeson v Dorset County Council gave the following statement ‘I do not see how an applicant could be found to have the relevant purpose unless he was aware of the possibility that he might be provided with accommodation and that he might be liable to pay for it’.

It is important to understand that if the donor is found to have deliberately deprived themselves of assets for the benefit of lowering the costs of care then the local authority are still under a duty to provide such care but can seek payment for the care by using debt recovery methods as was established within Robertson v Fife.

In respect of paying back the local authority, if it is established that the donor has deliberately deprived themselves of assets, as mentioned the local authority can recover the debt; known as the first avoidance procedure.

A charge can also be placed on the asset after it was gifted and in extreme circumstances the asset can actually be recovered. Should the debt for unpaid contributions reach £5,000 then insolvency proceedings can commence which would declare the donor bankrupt. A deferred payment can also be made where the local authority takes a legal charge over the property instead of a contribution from the person towards the cost of their care.

Laker Legal Solicitors can provide specific advice in relation to the transfer of your property at the time you wish to transfer and the implications that this means for you. We can also provide advice and represent you in the instance that the transfer has already occurred and you are being accused by the local authority of deliberately depriving yourself of assets.

For any assistance please contact us on 01524 753 040 where one of our advisors will be happy to assist.


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