Deprivation of Assets
Deprivation of assets occurs when a person deliberately reduces their assets — for example by gifting money or property — with the intention of reducing their contribution to care costs. Local councils can treat a person as if they still own the transferred assets when carrying out a financial assessment. There is no "safe period" after which a transfer is automatically excluded from scrutiny.
Deprivation of assets (DoA) occurs when someone deliberately reduces their assets to avoid paying for care. Local councils apply a notional capital rule: if they are satisfied that an asset was transferred with the significant purpose of avoiding care costs, they treat the person as if they still own it for means-test purposes. There is no 'safe period' — a transfer made 10 or 15 years ago can still be scrutinised if care needs were reasonably foreseeable at the time. Councils consider the timing, the person's health at the time of transfer, whether full market value was received, and any evidence of intent. If DoA is found, the council can also pursue the recipient of the asset (e.g. a family member) for the care costs up to the value of what was transferred. DoA is separate from, but related to, the Insolvency Act rules on transactions at undervalue. Seek specialist legal advice before transferring significant assets where care needs may arise.