Care costs consuming island homes:
Could this affect you?
Case Study:
Yule v South Lanarkshire Council [No2] 2000 SLT 1249
Yule v South Lanarkshire Council is the main legal authority in Scotland in relation to disposing of property prior to entering into residential care.
In March 1995 Mrs Rhoda Yule aged 81 of Wishaw, Glasgow gifted her home for ‘love, favour and affection’ to her granddaughter, Deborah Yule. She also retained a liferent in the property and continued to live in it until her accident.
Around this time she also made a Power of Attorney in favour of her son. Mrs Yule gifted her property while she was in ‘excellent health’ and very independent. However 18 months after transferring her house to her granddaughter, Mrs Yule took a bad fall which had severe consequences for her physical and mental health.
Since, she was unable to look after herself and required care. Thus she moved into her local nursing home. The Social Work Department carried out a financial assessment on her in order to decide whether she was required to contribute towards the cost of her care. Her son completed the form which required him to declare all his mother’s assets as well as those she had disposed of in the last 6 months. The ‘6 month rule’ is set down in section 21 of the Health and Social Services and Social Security Adjudication Act 1983, which means that if someone knew they may have to go into care and disposed of assets during the previous six months then this could be recovered by the LA and included in the financial assessment to pay for residential care.
However, Mrs Yule had transferred her home to her Granddaughter 18 months previously, thus her son did not include the house.
When the local authority later found that Mrs Yule had gifted her house, they decided that the value of the house should be included as notional capital during her financial assessment. This meant that Mrs Yule’s assets would exceed the upper limit of £22,000 and therefore she would have to pay her care fees in full.
But What About the ‘6 Month Rule’ under s.21? Mrs Yule argued that s.21 made no provision for assets disposed of outwith the 6 month period and it is also during this period that a person’s intention to dispose of property to avoid paying care fees was relevant. As the Council was taking into account Mrs Yule’s intention outwith the 6 month period then this meant that the Council was acting ultra vires (beyond its power). This was asserted as the Council’s power did not entitle it to find Mrs Yule liable to pay outwith the 6 month period.
However, the Council argued that when you take the relevant sections of the National Assistance Act 1948; The Social Work Scotland Act 1968 and the National Assistance (Assessment of Resources) and Regulations 1992, this constituted a contained scheme for assessing a person’s ability to pay for residential care.
Each relevant section contained in each Act displays Parliament’s intention which was to implement anti-avoidance provisions which were to include assets transferred during the previous 6 months as well as those disposed of at any time, if the disposal was intended to avoid paying care fees.
The Judge agreed with this argument and that Mrs Yule’s intention was not only relevant during the 6 month period but at any time. He classed this to be a ‘well founded submission’ and that the provision in the 1948 Act as amended by the 1968 Act and the 1992 Regulations were to be regarded together and constituted a self contained scheme for the payment of accommodation charges and for the assessment of the ability to pay. In addition, as Regulation 25 of the 1992 Act made no reference to a time limit of six months, none would be implied.
