.webp)
Deprivation of Assets & Care Home Fees
If a local authority believes someone has deliberately reduced their assets to avoid paying care home fees, it can treat that person as still owning the money or property.
This is known as deprivation of assets under the Care Act 2014 and associated charging regulations.
There is no fixed “seven-year rule”. There is no automatic time limit. Decisions are based on evidence, intention and foreseeability of care needs.
Where deprivation is wrongly alleged, the financial consequences can be significant.
We provide independent, structured advice so you understand your legal position before making decisions or responding to council findings.
What Is Deprivation of Assets?
Giving Away Money or Property
If savings are gifted to family members or property is transferred, the council may examine whether this was done at a time when care needs were foreseeable.
Not all gifting is deprivation. Context matters.
Selling Assets Below Market Value
Selling a property or valuable asset for significantly less than its market value can trigger investigation. The authority will consider whether the transaction reflects genuine market conditions or deliberate undervaluation.
Spending or Re-Structuring Finances
Large withdrawals, unusual spending patterns, placing assets into trusts, or rearranging ownership shortly before care is required may also be scrutinised.
The key question is not simply what was done - but why.
How Local Authorities Assess Deprivation
Under statutory guidance, councils must consider both intention and timing. The analysis is more nuanced than many families are led to believe.
Foreseeability of Care Needs
Was it reasonable at the time of the transfer to expect that care might soon be required?
Health condition, age, medical history and prior support needs are relevant.
Significant Motivation Test
Avoiding care fees must have been a significant motivation behind the transaction. It does not have to be the sole reason - but it must be more than incidental.
This is often where decisions become legally questionable.
Pattern of Financial Behaviour
Assessments must correctly treat pensions, benefits and other income sources. A Personal Expenses Allowance must be applied in residential care settings. Incorrect treatment of income or failure to apply allowances properly can distort the final contribution.
Evidence and Documentation
Councils should base decisions on documented evidence - including bank statements, property records, medical timelines and correspondence.
Assumptions alone are not sufficient.
Consequences of a Deprivation Finding
If deprivation is found, the local authority may:
-
Treat the person as still owning the transferred asset (known as notional capital)
-
Refuse funding support
-
Require full self-funding despite reduced actual savings
-
In certain circumstances, seek recovery from the recipient of the transferred asset
These findings can significantly affect eligibility for council support.
However, deprivation decisions must be lawful, reasoned and evidence-based. Where guidance has been misapplied, challenge may be appropriate.
Early advice is often safer than reactive defence after a decision is made.
Concerned About a Property Transfer or Council Investigation?
We provide:
✔ Independent Care Act analysis
✔ Risk assessment before asset transfers
✔ Written representations to local authorities
✔ Support responding to deprivation allegations
✔ Strategic advice for families and Attorneys
Understand your position before financial decisions become permanent.
Frequently Asked Questions
No. Unlike inheritance tax, there is no fixed time limit. Councils assess whether care needs were foreseeable and whether avoiding care fees was a significant motivation at the time of the transfer.
Possibly — but timing, health circumstances and financial position matter. Regular gifting patterns are viewed differently from sudden, large transfers made when care needs are emerging.
They cannot automatically reverse it, but they may treat the value as still belonging to you for means-testing purposes. In some cases, recovery action may be considered.
Notional capital is when a local authority assesses you as though you still possess an asset that has been transferred or reduced.
Yes. If statutory guidance has not been properly applied or evidence has been misinterpreted, formal representations and complaint procedures may be available.