Councils allegedly spy on parents who sign over house to children as a crackdown on families who 'avoid' care home fees
Local authority inspectors are allegedly rifling through residents’ financial records to see if they deliberately tried to conceal their property wealth.
Leading charity Age UK is so concerned at the number of families trying to avoid care fees it has published guidelines warning of the pitfalls in signing over property.
It warns that families may be embarking on a risky act, saying that budget-conscious councils are ‘likely to look at cases’ where they think ‘deprivation of assets may have taken place’.
Last night campaigners for the elderly said the ‘grey area’ of the law meant many families could be vulnerable to losing homes already signed over.
The warning has been issued because increasing numbers of parents in their 60s and 70s are transferring ownership of their home to their children to stop it being included for means-testing. This allows them to live in their home but no longer be its legal owners.
Allegedly, to hunt for evidence, officers can demand to see notes from meetings with financial advisers as well as any legal documents signed with solicitors.
If they decide they have enough proof that a family set out to deliberately hide the property from the council, they can reverse the transfer of ownership. This means the home is switched back to the parents – and will be included in the test for funding.
If a parent transfers shortly before going into care – despite being in good health – they are more likely to be investigated. Anyone who transfers ownership but then has to go into care within six months, will almost certainly be liable for care home bills.
But if the transfer is made two or more years before the parent goes in to care, council officials are less likely to pry. However, if they have reason to believe it was done deliberately, there is no limit to how long they can go back.
If a council unearths evidence that a property has been deliberately shielded from a care home means test, it can call on considerable legal firepower.
First, if it happened within six months of asking the council for funding, it can rely on the Health and Social Services and Social Security Adjudications Act 1983.
In this case, the local authority can recover any sums it has to pay towards the resident’s care costs from the person the home was transferred to.
If they find the property transfer took place more than six months before asking for care, a separate piece of law called the Assessment of Resources Regulations allows the council to refuse to fund the resident in the care home – often sparking a legal challenge.
Officials may also decide to pay on the resident’s behalf, and treat it as a debt to be repaid later.
In such a case, a local authority can ultimately use the Insolvency Act 1986 to get the money. In this case, a court may then order an earlier transfer of a home into trust to be set aside, or order the transfer back to parents from children.
Families who find themselves caught up in the process and want to challenge it face a costly legal battle – and could end up in court.
The council cannot force the sale of the house, but it can demand the money be paid from somewhere, leaving those who have moved into the house either having to foot the bill out of their own savings or apply for a deferment – but then having to sell the house when their relative dies.
Alternatively, they may have to sell up immediately and use the cash for the care bill.