If you are arranging care for an elderly loved one, whether that be residential care or home care, you may be looking into the option of receiving funding support from your Local Authority.
As part of a Local Authority evaluation of your finances, you will undergo a financial assessment to decide if you’re eligible for social care funding. Understanding this process and the deprivation of assets 6-month rule is critical so that you can be assessed accurately.
Failure to do so may result in you being accused of trying to hide or rid yourself of assets in order to receive funding for your care costs.
What is the depreciation of assets?
Local Authorities (LAs) are obligated to assist people with their social care costs when their assessable assets decrease to less than £23,250. At this point, the LA will conduct a financial assessment of the person’s assets and finances.
If the LA thinks that the individual has knowingly tried to reduce their assets in order to be eligible for social care funding, this is called ‘deprivation of assets’. This could be a recent big payment, transferring money into other people’s accounts, setting up a trust fund or other substantial and noticeable use of assets believed to be carried out to reduce the individual’s total assets.
If the LA determines that an individual has intentionally ‘deprived’ themselves of assets, the financial assessment will treat the person as still possessing that asset. This is referred to as ‘notional capital,’ and the LA will determine the person to be self-funding, I.e. they need to pay for the costs of care themselves, even if their assets are below £23,250.
Determining whether someone has intentionally deprived themselves of assets is an intricate matter and is determined by factors such as the timing and reason for the transfer and whether the need for care was foreseeable before or at the time of the transfer.
What is the depreciation of assets 6-month rule?
The deprivation of assets 6-month rule refers to an old legislation that was active before The Care Act 2014 came into effect. Under the previous rules, LA’s were limited when taking action on a gift or payment thought to be made as a deprivation of assets. If the LA decided assets had been knowingly deprived, they were only able to take action to recover the asset if it occurred within 6 months before the financial assessment. If the deprivation of assets occurred longer ago than 6 months, LA’s were unable to recover the asset.
The deprivation of assets 6-month rule no longer exists. The Care Act 2014 abolished this rule, and now LAs are able to consider a person’s assets and any payments or gifts as far back as they wish. Equally so, they can also take action to recover these assets.
While there are few examples of LAs attempting to recover assets under The Care Act 2014, it is never advisable to knowingly hide or adjust assets in order to receive social care funding. LAs have the authority to carry out their own investigations into a person’s assets far beyond the information provided to them in the financial assessment.
The changing landscape of social care funding
There are a few new rules coming into effect to be aware of if you are planning on applying for social care funding.
From October 2025, the threshold asset amounts will be adjusted. The new thresholds for income and savings are:
- More than £100,000 – You will be required to pay all the costs of your care.
- Between £20,000 and £100,000 – You will receive part of the funding of your care costs, decided with a means test tariff based on your total assets.
- Less than £20,000 – LA will fund the total cost of care. However, if you have an income, you may be required to contribute towards your care costs.
As part of the same changes to social care funding, there is a change to the care fees cap. Since October 2023, there is now a £86,000 cap on the amount any person in England will pay for personal care over an entire lifetime. It should be noted that this change is not retrospective, meaning that this rule will only include costs incurred since October 2023.
These are helpful changes for people who require care either at home or in a residential facility as the thresholds have been increased. This means that overall, individuals are getting more funding support with their costs of care.
To find out more about different ways to fund home care, read our Financing and Funding Home Care Booklet.
Arranging care for your elderly loved one
While understanding LA’s financial assessments can be complicated, home care shouldn’t be. At Country Cousins, we have been providing exceptional heartfelt care to families across the UK for over 60 years. In fact, we are the longest-established live-in care agency in the UK.
With our wealth of experience and expertise, we’ve made arranging home care easy. Our expert team are available to take your call 7 days a week. Simply get in touch to discuss your circumstances and we will guide you in the most suitable type of care for you or your loved one.
We offer a free, no-obligation enquiry service so you can receive a personalised quote with no pressure, and we’re happy to answer all the questions you may have.
When you choose home care with Country Cousins, we go the extra mile to match you with your perfect carer, taking into account not only your care needs but also lifestyle and personality. We know that this relationship is critical to the success of any home care arrangement. That’s why many of our clients tell us that their Country Cousins carer is more like one of the family, a trusted companion who they can rely on.