When you make a claim for the Local Authority to pay your care home fees, the council first carry out a detailed enquiry into your finances.
They investigate how much capital and income you have to check that you are entitled to public funding.
They also look at how much capital you used to have and whether you have deliberately transferred funds in order to be eligible for public funding.
Transferring away some of your assets in order to claim benefits or public funding is prohibited by a rule known as the rule against deliberate deprivation of assets.
Local authorities are currently investigating the issue of deliberate deprivation very closely when claims are made for the local authority to pay care home fees.
There have been a number of recent decisions by the Local Government Ombudsman on this issue where the council has refused to pay for care home fees and the person involved has challenged this decision.
Local authorities are now routinely looking back to the date when the care home resident first started to need care. They then carry out a detailed audit of the person’s financial history from that date.
They are looking for any disposal of capital or income which could be deemed to be a deliberate deprivation of capital.
They will request bank statements for the last seven years and they will look at Land Registry records.
If they find any capital or property that has been given away, they will treat the person as still owning that capital for the purposes of the means assessment.
If they make a determination of a deliberate deprivation of capital, they will refuse to pay care home fees. However, they do still have a role to play if the client is likely to be evicted from the care home. Therefore, this is a negotiating position. Generally, they are looking for the person who received the funds to pay back the money or to make a contribution towards the care home fees.
In order to make a finding of a deliberate deprivation, the local authority must establish that:
- Some money or property was transferred or given away,
- The person expected that they would need care and would have to pay for it,
- The reason for the transfer was to avoid paying care home fees.
If you put your house in trust or make other arrangements to reduce payment of care home fees while you are fit and well, this is treated as legitimate financial planning and does not count as a deliberate deprivation.
The key issue is whether it was foreseeable that the person would need care when the transfer of funds was made.