I’m worried that my house will have to be sold to pay for my care, can I transfer it to my children to avoid this?
Many people are concerned that they may have to sell their home to meet the cost of their care in later life, and often consider giving assets away so that they meet their local authority criteria and have their care costs paid for. However, it’s not that simple.
The Care Needs Assessment
Currently, when older people find they need care, they are assessed to see how well they are coping with daily living and what personal help and care they might need.
This is followed by a financial assessment that decides how much the local authority will pay towards the cost of care and how much they themselves will be required to contribute. Currently, anyone with assets over £23,500 must pay the full cost of their care.
In general terms, when the financial assessment is made, your home won’t be taken into account if:
- Your husband, wife or civil partner still lives there
- You have just moved into care – the value of your property should be ignored for the first 12 weeks that you require cares in a nursing home
- The NHS pays for your care – the NHS only funds your care if you need ‘continuing healthcare’ rather than social care, and then only in specific circumstances.
How local authorities investigate
You might think that the answer to your problem is simply to give away your property and your money to enable you to qualify to have your care costs met. However, local authorities are becoming increasingly vigilant in following up cases where houses have been transferred or sold.
In carrying out their assessment of your fees, your local authority will ask if you own your home, and if you answer ’no’, they will then ask if you have ever owned your home. If you have owned your home, but have sold it or given it away, then they will try to establish if you did so knowing that you needed care. This is referred to as ‘deliberate deprivation’.
If the house or proceeds of its sale were given away six months or less before you needed care, it will be viewed as a deliberate act of deprivation and the local authority could use the NHS and Community Care Act 1990 to reverse the transfer.
If the house was sold or given away more than six months before you needed care, then the local authority cannot use this act, but could use the insolvency laws to investigate what has taken place. It should be borne in mind that there is no time limit on how far back local authorities can investigate.
So, while it’s possible to give your home away, or sell it and give away the money, you could fall foul of the local authority rules and end up no better off, or create a financial burden for your loved ones whom you have given the assets to.