Q: I have a degenerative disease and am likely to need residential care within 10-15 years. A friend says if I gift my home to my son and I survive it by 7 years, the local authority cannot take my home into account when assessing my means. Should I transfer my home now to qualify for assistance if I need long term care in the future?
A: Transferring an asset out of your name does not necessarily mean it will not be taken into account in a means assessment by the local authority – even if you transferred it more than seven years prior to requiring local authority assistance.
The 7 year survivorship requirement applies to Inheritance Tax PETs (Potentially Exempt Transfers), and not to notional capital. Further, there is no time limit for means tested benefits and if it is evident that the transfer was done to try and secure benefits from the State, local authority, or local health board, the local authority can apply the notional capital rule. This means they will treat the asset as still being owned by the applicant regardless of whether and when they gave it away.
When they are assessing eligibility for assistance, both the local authority and the Pension Service can look for evidence of deliberate, or intentional, deprivation of capital such as property. However, as deprivation of capital does not necessarily occur for the purposes of avoiding a charge for accommodation or getting assistance sooner than would otherwise have been the case, the authorities would have to show that this was the intention before they could take transferred capital into account.
There are legal ways to protect capital assets when it comes to paying for care home fees, but as every set of circumstances is different it would be best to speak to a solicitor before you make any decisions about your home.