Care funding: new guidance on deprivation of capital

The Local Government and Social Care Ombudsman has released new guidance aimed at Local Authorities assessing cases of potential deprivation of capital assets to avoid paying for care.

This has been compiled in response to a number of investigations into complaints about how Local Authorities have approached these cases. It suggests that some common issues may include:

• Councils not considering the intention behind capital disposals
• Councils treating all gifts as deprivation of assets
• Incorrect calculations of notional capital
• Failure to provide any reasons for the council’s decision

The guidance highlights three key factors for Local Authorities to consider when assessing the disposal of capital assets:

1. Did the individual have a reasonable expectation of needing care?
2. Did the individual have a reasonable expectation of their need to contribute to their care costs?
3. Was avoiding paying for care a significant motivation in the timing of the disposal?

If these factors can be established, it may be that an individual has deliberately disposed of assets to avoid paying for care. Should that be the case, the council is entitled to treat the individual as though they still hold the asset which they had disposed of. This is known as ‘notional capital’.

The guidance suggests that the existence of care and support needs at the time of the disposal is not, in and of itself, sufficient grounds for establishing that there was a deliberate deprivation. That said, the council is entitled to draw inferences from the circumstances surrounding the disposal.

While timing of the disposal will be a significant consideration, there is no time limit on how far back the council can investigate disposal of assets. Councils should bear in mind, however, that they will need to show the individual had a reasonable expectation of needing care and needing to contribute towards the costs, at the time the disposal was made, which could prove more difficult if care is received some considerable time after the disposal.

In addition to the above, the guidance also suggests that Local Authorities should provide reasoning for the outcome of their decision and that they should offer individuals the opportunity to have the decision reviewed/investigated if they remain dissatisfied.

You can find the updated guidance here.