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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:
Examples that might be viewed with concern include:
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.
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.
Information researched and accurate as of February 2020. Not to be relied upon by advisers or their clients.
This website is designed to give professional financial advisers information and tools that they can use to help control and develop their business and should not be relied upon by private investors or any other persons.