Which assets the financial assessment looks at

Assets are items you own that have a financial value. They can include your income, savings, investments and property.

If the council agrees that you need care and support, they’ll look at your financial assets to decide how much you’ll have to pay towards your care fees. This is known as a financial assessment or means test. It will look at:

  • your income, including your pensions and certain benefits
  • your capital, including savings and investments
  • the value of any property, sometimes including your home if you own it.

Some assets are not included in the financial assessment in certain circumstances. For example, the value of your home isn’t included in the assessment if you need care at home. 

In general, the higher your income and capital are, the more money you’ll be expected to pay towards your care fees.

Read Paying for care services at home and Paying for care in a care home for more information.

What is deprivation of assets?

Deprivation of assets means you’ve deliberately tried to get rid of your assets to avoid charges or reduce the amount you would have to contribute to your care costs. There are various ways you might do this, including:

  • making a lump-sum payment to someone else, possibly as a gift
  • extravagant spending that is out of character
  • transferring the title deeds of your property to someone else
  • putting your assets into a trust that can’t be revoked
  • buying expensive items so they would be disregarded as personal possessions
  • selling an asset for less than its true value
  • giving away or selling the right to an income from a workplace pension.

There could be valid reasons for doing any of these things. The council must consider the timing and motivation of your actions. If they decide that you knew you would need care, and one of your reasons for getting rid of an asset was to avoid paying towards care costs, this could be seen as deprivation of assets.

How the council decides

When the council carries out the financial assessment, they’ll ask about things you used to own as well as what you currently own. There’s no time limit on how far back the council can look at your financial affairs to see if there has been deprivation of assets. You may have to provide evidence to prove to the council that you no longer have an asset.

There are many reasons why you might have given something away. The council must consider each case individually. They’ll look at:

  • why and when you disposed of your assets
  • whether you could have known that you'd need care and support at the time
  • whether you expected that you'd have to pay towards your care costs
  • whether avoiding care fees was a significant motivation for disposing of your assets.

If the council decides that you’ve deliberately deprived yourself of assets to avoid paying care costs, they’ll then decide whether to treat you as if you still had the asset. They may include it in your financial assessment and charge you accordingly. This is called notional capital or notional income. If you no longer have the asset, you could find that you’re expected to pay more towards your care than you can actually afford.

If you transferred the asset to someone else to avoid the charge, that person is responsible for paying the council. The amount would be the difference between what the council would have charged and what they did charge you for care, up to the amount they received from the asset.

Read our factsheet Can I avoid paying for care by giving away my assets? for more information on what you may have to pay.

If you owe the council money

If you’re treated as having notional income or capital and can’t pay your contribution to your care costs, you could end up owing the council money. They could claim the money you owe through the county court. However, this should only be a last resort and they should discuss other options with you first.

For care home fees, the council must offer you a deferred payment agreement if possible. If you transferred your assets to someone else – for example, changing ownership of your home – that person may be responsible for the debt. If you can’t pay, the council may still have to make arrangements for your care to continue. For more information, read our factsheet Can I avoid paying for care by giving away my assets?

Get advice from your council

The rules about deprivation of assets can be complicated. If you’re not sure whether something could be seen as deprivation of assets, it’s best to ask the council first, rather than go ahead and then encounter problems later. For example, if you were getting Attendance Allowance when you disposed of an asset, this might be considered as knowing that you had care needs that the council may need to help with in future.

If you disagree with the council’s decision

If you disagree with the council’s decisions, you have the right to challenge them. It’s a good idea to get specialist advice if necessary. You may wish to get legal advice before you take any action.

If you want specialist legal advice, you will need to find a solicitor who specialises in community care law. Getting legal advice can be expensive. If you decide to get legal advice, you may want to contact Civil Legal Advice to find out whether you would qualify for legal aid to help pay for this.

Whether or not you qualify for legal aid, the Civil Legal Advice service can give you details of organisations or solicitors specialising in community care law. You could also find a solicitor or mediator on Gov.uk.

Next steps

See our factsheet Can I avoid paying for care by giving away my assets? for more information.

If you’re not sure whether something could be seen as deprivation of assets, you should ask your local council first.

If you’re thinking of transferring your assets, you should get financial planning advice first. Visit the Society of Later Life Advisers or Unbiased to find an independent financial adviser.

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