Care costs consuming island homes:
Could this affect you?
Can I Sell My Home or Transfer Title to Someone Else to Keep it in my Family Before I Go into Residential Care?
The grim reality is that if at any time you get rid of any assets (including your property) to avoid paying the cost of residential care then this will be a ‘deprivation of capital’. Depriving yourself of assets to avoid paying for care is illegal and if this occurs, even though you no longer posses the asset, your LA may still treat you as possessing it. It is important to note that you can be accused of depriving yourself of capital to avoid paying for care at any time. To decide whether a person has deprived themselves of capital the local authority should consider the following questions:
Q1. Did the person actually own the capital?
The resident must prove he/she no longer has the asset, if he/she fails to do this then he/she may still be treated as possessing the capital.
Q2. Has deprivation occurred?
An example of acceptable evidence in relation to the disposal of capital may include: receipts for expenditure or proof that debts had been repaid.
Further, possible examples of a person who has deprived themselves of capital (although not necessarily for the purposes of avoiding a charge for accommodation) may include:
• A lump-sum payment has been made to someone else (e.g. as a gift or to repay a debt).
• Substantial expenditure has been incurred (e.g. on an expensive holiday).
• The title deeds of a property have been transferred to someone else.
• Capital has been reduced by living extravagantly (e.g. gambling or following a much higher standard of living than the resident could normally afford).
LA’s will give consideration, in respect of each case, to whether deprivation of assets has occurred. If the deprivation such as transferring the title of your house was done for a number of reasons, then trying to avoid paying for care must be a significant reason. For instance if you disposed of your house when you were fit and healthy and it was not foreseeable that you would end up in residential care then it would certainly be difficult for the local authority to prove deprivation of capital occurred, unless there was strong evidence to suggest otherwise. In the case study of Mrs Yule (see below) a five stage test is applied to decide whether deprivation of capital has occurred, which is formerly known as the ‘Notional Capital Rule’.
