Self-funder support

Deprivation of assets

Deprivation of assets means where a person has intentionally deprived or decreased their overall assets in order to reduce the amount they are charged towards their care.

This means that they must have known that they needed care and support and have reduced their assets in order to reduce the contribution they are asked to make towards the cost of that care and support.

The council has a duty to help a person with their social care costs when their assessable assets drop to £23,250, at which stage the council will undertake a financial assessment (means test). If the council decides that a person has intentionally deprived themselves of assets, the financial assessment will treat the person as still owning the value of that asset.

What happens next

If a local authority decides that a person has deliberately deprived themselves of assets in order to avoid or reduce a charge for care and support, they will first need to decide whether to treat that person as still having the asset for the purposes of the financial assessment and charge them accordingly.

As a first step, a local authority should seek to charge the person as if the deprivation had not occurred. This means assuming they still own the asset and treating it as notional capital or notional income.

If the person in depriving themselves of an actual resource has converted that resource into another of lesser value, they should be treated as notionally possessing the difference between the value of the new resources and the one which it replaced. 

For example, if the value of personal possessions acquired is less than the sum spent on them, the difference should be treated as notional resource.

Recovering charges from a third party

Where the person has transferred the asset to a third party to avoid the charge, the third party is liable to pay the local authority the difference between what it would have charged and did charge the person receiving care. However, the third party is not liable to pay anything which exceeds the benefit they have received from the transfer.

If the person has transferred funds to more than one third party, each of those people is liable to pay the local authority the difference between what it would have charged or did charge the person receiving care in proportion to the amount they received.

As with any other debt, the local authority can use the county court process to recover debts, but this would only be used after other avenues have been exhausted.

Examples include:

• making a lump sum payment to another person even as a gift
• buying expensive items which would be disregarded as personal possessions
• transferring the title deeds and ownership of a property to someone else
• selling any of your assets for less than their market value
• hiding your wealth by not declaring all your assets
• placing assets in a trust that cannot be revoked

If the council discovers a deprivation of assets, they will need to consider the timing and motivation of a person’s actions.

There is no time limit for how far back a council can assess that there has been an alleged deprivation of assets when carry out a financial assessment for care fees. The test is whether someone had a need or expectation of care when the assets were disposed of.

What is not a deprivation of assets

Examples might include:

• paying off debts
• consistent charitable giving over a period of years
• alterations or improvements on the person needing care’s property
• purchasing goods such as new furniture for the person needing care’s property
• paying for services

Deprivation of assets and the law

The deliberate deprivation of assets is a criminal offence. We may apply for a county court judgement against someone accused of deliberate deprivation of assets

You may have heard something about a 7-year rule, but there is no such thing as a 7-year rule regarding deprivation of assets in a social care context. The misconception comes from the law around inheritance tax, which does not apply to the paying for care rules.

Last updated 28 November 2025