When families begin exploring care home options, one of the most pressing concerns is how to fund the cost of care. For many, this means understanding how local authorities assess financial eligibility for support—and that’s where the concept of “deprivation of assets” becomes crucial. If you or a loved one has recently given away money, property, or other assets, you might assume this reduces your financial resources and makes you eligible for council funding. However, local authorities can investigate whether assets were deliberately disposed of to avoid care home fees, and if so, they may still include them in their financial assessment.

What Does Deprivation of Assets Mean?

Deprivation of assets occurs when someone intentionally reduces their capital or income to increase the amount of financial support they receive from their local authority for care home fees. This could involve giving away savings, transferring property ownership to family members, or spending large sums unnecessarily.

The key word here is “intentionally.” Local authorities must prove that the primary reason for disposing of assets was to avoid or reduce care costs. If you’ve genuinely given money to family for other reasons—perhaps helping with a house deposit years before needing care—this wouldn’t typically count as deprivation.

Why Do Local Authorities Look Into This?

Care home funding assessments determine whether the local authority contributes towards your fees or whether you’ll be expected to pay privately. Your eligibility depends on:

• Your capital: Savings, investments, property, and other assets
• Your income: Pensions, benefits, and other regular payments

If your assets fall below certain thresholds, you may qualify for council support. As of 2024, if you have capital below £14,250, the local authority may contribute towards your care costs. If you have more than £23,250, you’re expected to fund your own care (these figures apply in England and may differ slightly in other UK nations).

When someone deliberately reduces their assets shortly before or after entering a care home, it potentially shifts the financial burden from the individual to the taxpayer. That’s why councils have the authority to investigate suspicious transfers.

What Counts as Deprivation?

Local authorities consider various scenarios when assessing whether deprivation has occurred:

Timing matters significantly. Transferring assets shortly before or after entering a care home raises more questions than gifts made years earlier. However, there’s no fixed time limit—councils can look back many years if they believe deprivation occurred.

Common examples include:

• Transferring your home to children or other relatives for little or no payment
• Giving away large sums of money to family members
• Placing assets into a trust where you no longer have access to them
• Spending extravagantly on non-essential items to reduce capital
• Paying off someone else’s debts or mortgage
• Purchasing expensive items you don’t genuinely need

What doesn’t count:

• Spending money on your own care before entering a care home
• Paying for necessary home adaptations or medical equipment
• Making reasonable gifts on special occasions (birthdays, weddings) that are proportionate to your financial situation
• Historical gifts made years before care was anticipated
• Using savings to pay normal living expenses

The Department of Health and Social Care’s guidance makes clear that authorities must consider each case individually rather than applying blanket rules.

How Do Local Authorities Prove Deprivation?

When assessing whether deprivation has occurred, your local authority will consider several factors:

Was avoiding care costs a significant reason for the disposal? If you transferred your home to your daughter because you wanted to help her onto the property ladder five years before you needed care, that’s different from transferring it one month before your care home assessment.

The timing of the transfer. Recent disposals attract more scrutiny than historical ones, particularly if they coincide with deteriorating health or conversations about future care needs.

Did you have a reasonable expectation of needing care? If you’d already been diagnosed with dementia or had experienced falls requiring hospital treatment, the authority might argue you should have anticipated future care costs.

Could you have reasonably foreseen the need for care? This doesn’t mean you needed a crystal ball, but if you were already receiving home care or your health was visibly declining, this strengthens the authority’s case.

Local authorities have legal powers under the Care Act 2014 to investigate asset transfers. They’ll typically request bank statements, property records, and other financial documentation going back several years.

What Happens If Deprivation is Found?

If the local authority determines that deprivation has occurred, they’ll treat you as still owning those assets when calculating your contribution towards care costs. This is called “notional capital.”

In practice, this means:

You’re still expected to pay. Even though you no longer have the money or property, the council will assess you as if you do. You’ll be charged the full cost of your care until the notional capital falls below the threshold where local authority support begins.

The recipient may be pursued. The local authority can ask the person who received the assets to contribute towards your care fees. While they can’t force them to pay, they can enter into legal agreements. For example, if you transferred your home to your son, the council might place a legal charge on the property.

You’ll need to find the money elsewhere. This creates real difficulties because you’re being charged for care you can’t afford, having given away the means to pay for it. Some families arrange for the recipients of gifted assets to make payments, but this isn’t always possible.

The consequences can be severe, creating financial and emotional stress at an already difficult time.

Understanding the Property Question

Your home is often your most valuable asset, and questions about property ownership frequently arise during care home planning.

When is your property included in the assessment?

Generally, if you move permanently into a care home, your property becomes part of your capital assessment. However, there are important protections if certain people still live there:

• Your spouse or partner
• A relative aged 60 or over
• A relative under 18 who you’re responsible for
• A disabled relative

In these circumstances, your home is “disregarded” and won’t count towards your capital assessment.

What about transferring property to avoid fees?

This is one of the most scrutinised areas. Transferring your home to children or other relatives shortly before or after entering care almost always triggers a deprivation investigation. Even if the transfer happened years ago, if the authority believes avoiding care costs was a significant motivating factor, they can still pursue the matter.

The Money Advice Service provides detailed guidance on property and care funding, and it’s worth reviewing their resources before making any decisions.

What Should You Do Instead?

Rather than trying to hide assets, there are legitimate ways to plan ahead:

Start conversations early. If you’re considering your future care needs, speak with a financial adviser who specialises in later-life planning. They can help you understand your options without risking allegations of deprivation.

Consider immediate needs annuities. These insurance products can help fund care costs whilst potentially protecting some capital for inheritance. They’re complex, so professional advice is essential.

Explore deferred payment agreements. If your home is your main asset, your local authority may offer a deferred payment scheme. This means they loan you money to pay for care, with the debt repaid when your property is eventually sold. You won’t need to sell your home immediately to fund care.

Understand the 12-week property disregard. When you first move into a care home, your property is disregarded from your financial assessment for up to 12 weeks. This gives you time to decide whether to sell, rent it out, or explore other options.

Make reasonable lifetime gifts. You’re not expected to live as a miser just because you might need care one day. Reasonable gifts for birthdays, weddings, and other occasions are perfectly acceptable, as are helping children with deposits or education costs—provided these are proportionate to your means and made for genuine reasons.

Get specialist legal advice. If you’re considering any significant financial transactions and think you might need care in future, speak to a solicitor who specialises in Court of Protection and care funding matters. They can help you structure your affairs appropriately.

When to Seek Help

Navigating care funding can feel overwhelming, particularly when you’re also managing the emotional challenges of transitioning to residential care. Here’s when professional guidance becomes especially important:

• You’re considering giving away substantial assets or property
• You’ve recently made significant financial gifts and now need care
• The local authority has raised questions about past asset transfers
• You’re unsure whether historical gifts might be investigated
• You want to plan ahead without risking future complications

The charity Independent Age offers free, impartial advice about care funding, including guidance on avoiding deprivation allegations. Their advisers can talk you through your specific situation without judgement.

For legal matters, consider consulting a solicitor who belongs to Solicitors for the Elderly, a specialist organisation whose members focus on the legal needs of older people and their families.

Planning With Integrity

The idea of deprivation of assets often worries families who have legitimately gifted money or property over the years. It’s important to remember that local authorities distinguish between genuine lifetime gifts and deliberate attempts to manipulate the system.

If you helped your daughter buy her first home a decade ago, supported your grandchildren’s education, or made other normal family financial decisions, you shouldn’t panic. These transactions had their own valid purposes at the time.

The problems arise when assets are transferred specifically because care is anticipated or already needed. In these circumstances, the council has every right to investigate and take action.

Our advice? Be open and honest throughout the process. If the local authority asks questions about past transactions, provide full information and explain your genuine reasons. Choosing the right care home and funding it appropriately is challenging enough without the added stress of deprivation investigations.

Finding the Right Care Home Support

At Blissful Care Homes, we understand that financial concerns are often at the heart of care home decisions. Whilst we can’t provide financial or legal advice, our team can discuss care costs openly and help you understand what to expect.

We work with families who are self-funding, receiving local authority support, or using a combination of both. Whatever your situation, we’re here to ensure your loved one receives excellent care in a warm, homely environment.

If you’d like to discuss care options or arrange a visit to one of our homes, please get in touch. We’re always happy to answer questions about care costs, funding assessments, and what you can expect when you join the Blissful family.

Understanding deprivation of assets is just one piece of the care planning puzzle, but it’s an important one. By approaching financial matters with honesty and seeking appropriate advice when needed, you can make informed decisions that provide security and peace of mind for everyone involved.