When deciding whether to make a gift to a family member or other it is important to understand the effects of s22 of the Care and Support (Charging and Assessment of Resources) Regulations 2014 and whether the Local Authority could class the gift as a deliberate deprivation of assets to avoid contributing towards your social care.
The regulations under s22 of the Care and Support (Charging and Assessment of Resources) Regulations 2014 state that the adult is to be treated as possessing capital of which the adult has deprived themselves for the purpose of decreasing the amount that they may be liable to pay towards the cost of meeting their needs for care and support or their needs for support. This also includes income and could also be seen as deprivation.
In order for a claim to be made against you it must be established that there has been a disposal or deprivation of capital and that the purpose was to avoid a charge for contributing towards your care needs. The adult must have had a reasonable expectation of needing care and support and also a reasonable expectation of needing to contribute to the costs of care for this to be determined.
If you have over £23,250.00 then you are classed as self-funding and will not need the involvement of the Local Authority. You can still ask for the Local authority to be involved in the arrangement of your care needs if you would prefer. If you require financial help towards your care needs then a Financial Assessment will be undertaken by the Local Authority. The consequence for the Financial Assessment by the Local Authority is that they can treat the person as though they still have the asset or income when making a decision for contributions to self-care.
The purpose of deprivation is that it must have been to avoid or reduce the payment of care fees. It does not have to be the only reason but it must be a significant reason. The Local Authority will look at the intentions of the individual when making the gift. This test is subjective. The Local Authority must consider the reason provided and give full reasons if they do not accept it was not intended to deprive themselves.
There is no time limit as to how far back the Local Authority can look into. They will take into account the time at which the disposal was made and whether the adult was fit and healthy when they disposed of the asset and whether they had a reasonable expectation of needing care and support at that time or at some point in the future. The Local Authority will often look at whether the adult was assessed for care and support in the past and when they applied for Attendance Allowance.
When making a gift whilst in receipt of care you should be treated with dignity and respect and be able to spend your money as you wish. It should not be automatically assumed that you have deprived yourself. If a gift is made following a previous pattern, with no evidence of hast, over a period of time, and if the adult has funded their care for many years, it would be unreasonable to treat it as a deliberate deprivation. If disposal is reimbursement of money paid there must be a financial trail showing what was being reimbursed, otherwise anything not explained will be treated as deliberate deprivation.
If at the time of making a gift you have a limited life expectancy and have sufficient funds to pay for your own care for that period – but lives longer, provided you can produce robust evidence, it is reasonable to make a gift.
It is important to consider the above when making a gift of any asset during your lifetime.
If I or a colleague can assist you with the planning of your affairs then please feel free to contact us by calling 01206835261 or emailing [email protected].