Deprivation of Assets: Understanding the Rules and Implications for Care Home Fees

When someone deliberately reduces their wealth to avoid paying care home fees, it's called "deprivation of assets." Local councils can investigate these situations and may still count those assets when calculating what you should pay.

What Exactly is Deprivation of Assets?

Deprivation of assets happens when you intentionally reduce your savings, property value, or income specifically to lower what you'd pay towards care costs.

The crucial word here is "intentionally." Councils don't simply look at whether you've given away money or spent savings, they examine why you did it and when.

What Councils Consider Deliberate Deprivation

Your local authority might investigate if you've:

• Given substantial sums to family members around the time of a care assessment
• Transferred your home's ownership to relatives when care seemed likely
• Made uncharacteristic large purchases or spending decisions
• Converted assets into forms that aren't counted in assessments
• Made investments specifically designed to drop below the capital threshold

The timing matters enormously. A gift made 15 years ago when you were healthy carries far less scrutiny than one made six months before a care needs assessment.

How Councils Make Their Decision

When investigating potential deprivation, your local authority examines several factors:

Your health at the time: Were you already experiencing health issues that might lead to needing care?

The timing: How close was the transaction to when you needed care services?

Your motivation: Could you reasonably have foreseen needing care when you made the financial decision?

The amount involved: Was it proportionate to your overall wealth and spending patterns?

There's no time limit on how far back councils can investigate, though they rarely pursue transfers made many years earlier when you were in good health.

The government's official guidance on charging and financial assessment provides detailed information on how councils should approach these decisions: GOV.UK Care and Support Statutory Guidance

What Happens If They Decide You've Deprived Assets

If the council concludes you deliberately reduced your assets, they can:

• Treat you as still owning those assets (called "notional capital")
• Calculate your care contribution based on what you would have owned
• Attempt to recover assets or their value from whoever received them
• In serious cases, pursue legal action

You'd then be charged as if you still had that money, even though you don't.

What Doesn't Count as Deprivation

Councils recognise that people manage money for legitimate reasons unrelated to care costs. These actions typically aren't considered deliberate deprivation:

• Regular birthday or Christmas gifts within normal limits for your circumstances
• Charitable donations consistent with your history of giving
• Paying off legitimate debts
• Home improvements made whilst you were healthy
• Day-to-day living expenses and reasonable lifestyle spending
• Financial decisions made when care needs weren't foreseeable

The pattern matters. If you've given your grandchildren £100 each Christmas for years, continuing that tradition won't raise concerns. Suddenly giving them £50,000 each when you're developing health problems likely will.

Understanding the Financial Assessment

When you need care, your local authority assesses what you should contribute based on:

• Income: Pensions, benefits, and any earnings
• Capital: Savings accounts, investments, and property
• Personal possessions: In some situations

Current Thresholds in England (2025)

• Above £23,250: You pay full care costs yourself
• £14,250 to £23,250: You contribute from both capital and income
• Below £14,250: Only income is considered for contributions

These figures apply in England and may differ in Scotland, Wales, and Northern Ireland.

For the most current thresholds and detailed information about means testing, visit: NHS England: NHS continuing healthcare and NHS-funded nursing care

Age UK also provides excellent guidance on paying for care: Age UK: Paying for residential care

Your Home and Care Funding

Your property is usually included in the assessment when you move into a care home, but not if:

• Your spouse or partner still lives there
• A relative aged 60 or over lives there
• A child under 16 you're responsible for lives there
• A disabled relative lives there

The Property Transfer Misconception

Many people believe transferring their home to children protects it from care costs. This is one of the most common—and costly—misunderstandings.

If you transfer property ownership to avoid care fees, it's likely to be considered deliberate deprivation. The council can still count the property's value when calculating your contribution, except now you don't own it and can't control what happens to it.

You could end up in the worst possible position: assessed as if you own an asset you've actually lost control of.

Citizens Advice provides helpful guidance on this topic: Citizens Advice: How your home is treated in the financial assessment

Practical Scenarios

"I've Already Given Away Assets—What Now?"

If you've already transferred or spent assets and later need care, contact a solicitor specialising in social care law immediately. They can:

• Assess whether the council is likely to view it as deliberate deprivation
• Help you document the legitimate reasons for your financial decisions
• Represent you if the council launches an investigation

Being proactive gives you the best chance of a favourable outcome.

Find a specialist solicitor through: Law Society: Find a solicitor (search for "Court of Protection" or "elderly client care")

"Can I Make Gifts to Family?"

Yes, absolutely. You're entitled to be generous. However, be aware that:

• Substantial gifts made when care needs are foreseeable will be scrutinised
• Uncharacteristic financial behaviour raises questions
• Normal patterns of giving (birthdays, weddings, regular support) are generally fine

Keep records explaining the purpose and context of significant gifts. "Helping my daughter with her house deposit, as we've discussed for years" is very different from "reducing my assets below the threshold."

Planning Responsibly for Future Care

Rather than looking for ways around the system, consider these approaches:

Start conversations early. Discuss care preferences and financial realities with family before health declines. This prevents rushed, poorly-considered decisions later.

Explore care funding options. Immediate care annuities, equity release, and other financial products can help manage care costs legitimately.

Keep detailed records. Document why you make significant financial decisions, especially gifts or transfers. Contemporary evidence is far more credible than explanations created after the fact.

Get professional advice. Consult financial advisers and solicitors who specialise in later-life planning before making major decisions, not after.

Understand local care services. Research what's available in your area, including costs, so you can plan realistically.

The Money Helper service (backed by government) offers free, impartial guidance: Money Helper: Planning for care costs

The Society of Later Life Advisers can help you find qualified financial advisers: SOLLA: Find an adviser

When to Seek Legal Help

Consider consulting a solicitor specialising in social care funding if you:

• Are planning to make substantial gifts or financial transfers
• Have already transferred assets and are now facing a care assessment
• Disagree with a council's deprivation decision
• Want to create proper documentation for legitimate financial planning
• Need to understand how assets might be assessed in your specific circumstances

Legal advice costs money, but it's considerably cheaper than fighting a deprivation of assets determination later—or paying for care as if you have assets you no longer control.

Common Questions

How far back can the council investigate?

There's no legal time limit. However, transfers made many years ago when you were healthy are harder for councils to challenge. The burden of proof increases the further back they go.

What if I just spent my savings on holidays and living well?

You're entitled to enjoy your money. However, if you go from modest spending to burning through £80,000 in six months right before needing care, expect questions. The council will look at whether the spending was genuinely for enjoyment or deliberately designed to reduce assessable assets.

Can I challenge the council's decision?

Yes. If you disagree with a deprivation determination, you can use the council's complaints procedure and, if necessary, take the matter to the Local Government Ombudsman. Legal representation significantly improves your chances.

For information on complaints: Local Government and Social Care Ombudsman

Does having a will or trust protect assets?

Not from care cost assessments during your lifetime. Wills only take effect after death, and trusts where you retain benefit or control don't prevent assets being assessed. Some trust structures might help, but setting them up specifically to avoid care costs could itself be considered deprivation.

Getting Independent Advice

Several organisations provide free, impartial advice on care funding:

• Independent Age: 0800 319 6789 | independentage.org
• Age UK Advice Line: 0800 678 1602 | ageuk.org.uk
• Citizens Advice: citizensadvice.org.uk (find your local bureau)
• Carers UK: 0808 808 7777 | carersuk.org

How Ashberry Care Homes Can Help

At Ashberry Care Homes, we understand that funding conversations are often the most stressful part of planning for care. Whilst we can't provide financial or legal advice, we can:

• Explain clearly what our care costs and what's included
• Direct you to appropriate local resources for funding guidance
• Give honest information about the care assessment process
• Help you understand what questions to ask financial advisers

Our focus is providing excellent dementia care, residential care, and nursing care across our Gloucestershire homes. We believe families make better decisions when they have clear, honest information about both care quality and practical funding matters.

If you'd like to discuss care options or visit one of our homes, please get in touch. We're here to help you navigate these decisions with clarity and compassion.

Contact us: enquiries@ashberry.net | 01442 819194

Visit our website: www.ashberry.net