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New deprivation of capital guidance for local authorities

Posted on 07th September 2022 in Later Life Planning, Safeguarding Vulnerable Clients

Posted by

Sue Halfyard

Partner & Chartered Legal Executive
New deprivation of capital guidance for local authorities

The Local Government and Social Care Ombudsman has issued guidance to councils on the often-complex issue of Deprivation of Capital decisions.

The guidance is based on the LG&SCO's decisions on deprivation of capital cases. These are cases where someone is accused of intentionally depriving themselves of capital, or deprivation of assets, when a local authority assesses how much they should contribute to care fees and care home costs.


What is deprivation of capital?

Deprivation of capital arises where a person knowingly reduces their assets, such as money, property or income, with the intention of them not being included in any care home financial assessment towards the cost of their care.


Does the council contribute to care fees?

Local councils might provide some of these services free to everyone who needs them. But for most residential care home services, your local council will only pay if your income and savings are low. The council’s contribution is calculated taking into account a person's financial resources, including their income and capital, amongst other factors. The contribution towards care fees from a council can benefit the person financially if it results in a reduction in their care support payments.


How does the new Deprivation of Capital guidance impact care fees?

The new guidance sets out the approach to investigating complaints of Deprivation of Capital cases. This includes how local authorities should apply the Care and Support Regulations 2014, and the Care and Support Statutory Guidance, when someone is moving into care.

The guidance identifies several key issues and learning points for local authorities, including:

• Not considering all relevant factors or making proper enquiries.

• Wrongly applying the Personal Expenses Allowance to people funding their own care.

• Treating all gifts as deprivation.


What is a personal expenses allowance?

A Personal Expenses Allowance is the weekly amount that people receiving from their local authority for their care home care and support. It is assumed that they will need the minimum for this and their personal expenses.


Find out more

The LG&SCO conducts investigations into approximately 40 complaints per year relating to deprivation of capital decisions by a local authority.

If you are considering making a gift yourself, or under a Power of Attorney, we recommend seeking legal advice.

For further information or support, contact our Later Life Planning team who will be happy to advise you. 

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