Dementia Support Line
Give or take: Will giving some of our savings to our daughter cause problems?
How a gift of money might affect your local authority’s financial assessment of how much you need to pay towards care.
‘My wife has dementia and is about to move into a care home. We want to give our daughter some of our savings, but a friend said this isn’t allowed!’
Your friend may be aware of some rather complicated rules about deciding how much we need to pay for care.
When someone moves into a care home, the local authority usually looks at their income, savings and other assets – a financial assessment – to decide how much they’ll pay towards care costs. Most people contribute something, but how much depends on what this assessment says they have to pay.
Although you’re both free to give your savings to your daughter, if it looks like you did this to avoid your wife paying more towards her care, then it could cause problems.
It’s not about tax
Many people have heard about ‘gifting’ money for tax purposes, for example to pay less inheritance tax. However, tax rules are not the same as those governing how much people should pay towards their care.
Your own individual savings will not be included in the financial assessment for your wife’s care, but 50% of any joint savings will be treated as hers. If you were to make a gift of any of these savings to your daughter, the local authority may view it as a ‘deprivation of assets’.
‘The rules are complicated, but much will depend on the amounts involved and the reason you and your wife are considering giving money to your daughter.’
Deprivation of assets
Deprivation of assets is when money that should have been included in a person’s financial assessment for care costs has been given to someone else. The local authority might still treat this amount as belonging to the person, even if it’s no longer in their possession.
The rules are complicated, but much will depend on the amounts involved and the reason you and your wife are considering giving money to your daughter.
Your wife won’t be expected to use all of her assets to pay for care. The rules about how much the financial assessment should ignore depend on whether you live in Wales, Northern Ireland or England.
Legal advice
It may be wise to seek legal advice before making decisions that could affect a financial assessment.
Solicitors for the Elderly could help find a solicitor near you with experience and knowledge of this area, and they don’t charge to do this. However, the solicitor would charge for a consultation.