Can the council say I gave away assets to avoid care home fees?

Full answer

When you need help paying for care, the local authority carries out a financial assessment (means test) to decide how much you contribute. As part of this they look at whether you have given away money, property or other assets. If they conclude you did so deliberately to reduce what you would pay for care, this is treated as 'deprivation of assets' and they can include the value as 'notional capital', assessing you as though you still hold it. The key test is intention. Councils consider whether you had a reasonable expectation of needing care at the time of the transfer, and whether avoiding the contribution was a significant motivation. Gifting savings to family, transferring a property into someone else's name, buying assets that are excluded from the means test, or selling something for far less than its value can all be challenged. There is a common myth about a fixed 'seven-year rule' for care fees; unlike inheritance tax, there is no statutory time limit for deprivation, so an old transfer can still be examined if the timing suggests care was already foreseeable. Who this affects: anyone approaching the point of needing residential or domiciliary care, and their families. The capital limits used in the means test, and the precise way notional capital is applied, are set in the relevant care regulations and can change, so confirm current thresholds on gov.uk or with your council rather than relying on figures you have seen elsewhere. Legitimate spending is not automatically deprivation. Paying off debts, normal living costs, reasonable gifts when care was not in prospect, and ordinary expenditure are generally acceptable. The line is drawn at deliberate avoidance. If a council finds deprivation, they may recover the contribution from you or, in some cases, from the person who received the asset. Because the rules are judgement-based and the stakes are high, take independent legal or specialist care-fees advice before making any large gift or transfer.

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