As per the Inland Revenue rules someone can give money to their relatives every year. If that someone is a self funder in a Care Home would this then be regarded as deprivation of capital? This particular client wouldn't need help with the fees straightaway if she gave money to relatives , but if she went on doing it year after year then she would eventually need help with the fees. How would it be treated do you think?

Mon 11-May-09 01:32 PM by CraigM

I gather you are relating to the £3000 per year gifts that are exempt from inheritance tax.

It would a matter for the decision maker to decide whether or not your client deprived themselves of capital. If they had been giving small gifts over a long period i.e. a long time before claiming for benefit/help then this would be more indicative that this is not being done on the spur of the moment though i.e. if the client was well and not in care when s(he) started the gifts. If the gifts started when the person was in care and expected to need help in paying the fees then this could be viewed as intentional or deliberate deprivation of capital.

The DM will be looking for intentional or deliberate deprivation of the capital. It might be worth consulting the The Department of Health’s Charging for Residential Accommodation Guide (CRAG) which covers deprivation of capital.

Though the DM should only count notional capital when there is evidence of such acts to deprive for benefit.

Yule v South Lanarkshire discusses deliberate disposal of capital. Though this was questioned in Beeson v Dorset County Council.

The later C.A. case talks about the claimant need not have knowledge of the capital limits more about the possibility of liability of care and in turn help that you could get (benefit).

It is a subjective test. If they are found to have deprived capital and that when added to the actual capital comes above the max limit (£22,500) then the LA can asses the client as being able to meet full care costs.

Sorry it can not be more accurate.

Regards