Gifts and Care Costs

Many people want to make gifts in later years when they may then need long term residential care.

The Care Act means that if you are in good health with no reasonable prospect of going in to care when you make the gift then the Local Authority should not take those assets in to account in assessing what you should pay towards your care.

If you are in poor health with an increased likelihood of care then a gift is likely to be included and the Local Authority can pursue the recipient for the value of the gift to satisfy care costs.

The Local Govt and Social Care Ombudsman has recently asked South Gloucestershire Council to apologise and pay £250 for distress caused after deciding a couple deliberately deprived themselves of capital to reduce the husband’s care costs.

It did not consider all relevant facts or investigate why the couple had transferred money to their daughter and did not provide reasons for its decision.

The husband, who has a number of health conditions including Parkinson’s Disease and dementia, had been living with his wife in their family home. Over the years the family spent significant sums to ensure he could remain there as long as possible.

The couple had given three of their children help to purchase their houses. Their fourth had not needed help until more recently and the husband’s condition deteriorated at the same time.

He was placed in a nursing home and a financial assessment took into account the money recently given away. This meant they had to pay the full care costs, which they could not afford.

The council did not carry out a financial assessment in line with the Care Act, Ombudsman Michael King, said:

“The guidance says people should be treated with dignity and are free to spend their income as they see fit – including, in this case, making a similar gift to one daughter as they have done previously for their other adult children.

“The council’s actions have caused this family additional stress and worry, at a time when the wife was already faced with the emotional trauma of placing her husband into a nursing home.

The authority now has to review its decision after giving the wife the chance to provide further evidence and give a properly reasoned decision showing the evidence considered in accordance with statutory guidance. It must also carry out a proper financial assessment.

The outcome may not change but we have our fingers crossed that they find in her favour.

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