Deprivation of assets is when you purposefully sell or give away your assets to reduce or avoid paying any care costs. This can be done by:
- giving large cash payments as gifts,
- spending more than usual,
- transferring property to someone else,
- putting assets into trusts that cannot be cancelled,
- buying expensive items so they are classed as personal belongings, or
- selling an asset for less than it is worth, usually to a family member.
If you have purposefully reduced your assets to avoid paying residential care or home care costs, this will be classed as deliberate deprivation of assets.
Deciding if someone has deprived themselves of assets
When we carry out your financial assessment, we will ask about things you used to own, as well as what you currently own. There is no time limit to how far back we may look to see if there was any deprivation of assets. We may do this if there is evidence that you would have needed care and support in the future. For example, you were diagnosed with a degenerative condition, such as Alzheimer's when you gave away or sold an asset.
If you no longer have certain assets, such as a property, we will ask for proof of sale. We may investigate to find out what has happened to an asset.
Not everything will be classed as deprivation of assets as there may be reasons why you sold or gave it away. We will consider your personal circumstances, such as:
- when and why you gave away or sold an asset,
- whether you knew that you would need care in the future,
- whether you expected to pay for your care costs (for example, having a second property which you sold to avoid paying these costs), or
- whether the reason you sold or gave away assets was to avoid care costs.
If there is evidence that you have deliberately deprived yourself of an asset to avoid paying care costs, we will complete your financial assessment as though you still own it. We will include the asset's full value in the financial assessment. This is called notional capital or notional income.
If you no longer have the asset, you could be expected to pay more towards your care costs than you can afford.
Under the Social Services & Well-being (Wales) Act 2014, if you transferred the asset to someone else to avoid the charge, that person may become responsible for paying your care costs. If there is a difference between what we charged you and what we would have charged you if you still had the asset, the person may have to pay the difference.
Paying off debts
If you sold any of your assets to pay off debts in your name, this will not be considered a deprivation of assets. If you sold an asset to pay off someone else's debt, we are likely to class this as a deprivation of assets. For example, paying someone else's mortgage.
Forgetting to disclose something
If you forget to tell us something when completing an assessment, please tell us as soon as possible. We will include this asset and re-calculate your assessed contribution.
If we find that you have not told us about a current or past asset, we will arrange for a reassessment.
Not everything will be classed as deprivation of assets. If you have any questions, please speak to whoever is completing your assessment.
If you owe us money
You may end up owing us money if we class you as having notional income or notional capital and you cannot pay your contribution towards your care costs.
If you have transferred your assets to somebody else, they will be responsible for repaying us. For example, you have signed your property over to an adult child.
We will discuss the options available to you first, but we can take the case to court if we feel that it is necessary.
Disagreeing with a decision
If you disagree with our decision, you can request a review of your financial assessment if:
- we have not followed legislation or our own charging policy.
- the charge we set is incorrect.
- your financial position has changed, or
- paying the charge would cause you financial hardship.
We will ask you to provide further information and evidence to be able to review our decision.
More information
The best person to speak to is the officer who completed (or has arranged to complete) the financial assessment with you.
If you have not been assessed but have questions about deprivation of assets, we encourage you to get independent legal and financial advice.
Age Cymru has produced a useful factsheet on deprivation of assets. You can view the factsheet on their website.
