Recovery of debt and deprivation of assets

Recovery of debt

This will be initiated where it is clear that it is as a result of a person’s deliberate non-payment. All other reasonable options will be considered before using debt recovery powers under section 70 (Recovery of charges, interest, etc.) of the Act, including but not limited to: engagement/consultation, negotiation, mediation and court action if this is considered appropriate. Social services case workers and managers will not undertake debt recovery to ensure no conflict of interest and so that social services maintain focus on meeting assessed needs. However, social services staff will be involved in the first stage of the debt recovery process to engage with the service user; to determine the circumstances for non-payment and possible early resolution. Social services staff will also be consulted during the process where necessary. Each case will be considered on its merits so that specific circumstances such as health and well-being and any communication needs are given due consideration.

Interest on debt

Interest will be charged on outstanding debt in accordance with the regulations that allow discretion to charge admin fees and interest up to 0.15% in excess of the Market Gilt Rate as reported by the Office of Budget Responsibility in their Economic and Fiscal Outlook report.

Deprivation of assets

When a person deliberately disposes of an asset in order to reduce the amount they contribute towards the cost of their care, it is known as deprivation of assets. In these cases notional capital will be applied to financial assessments. This where a person does not actually possess capital but they are treated as if they do.

Notional Capital value will be applied to a financial assessment if it is found that the person has intentionally deprived themselves of the capital, such as selling or transferring ownership of a property, in order to reduce the amount, they would need to pay towards the cost of their care.

If the service user has capital in excess of the national limit which is in addition to their notional capital, then the notional capital rule will be applied from the date the actual capital falls below the capital limit.

Determining deprivation of assets for the application of notional capital will depend on individual circumstances such as:

What service was being provided to the service user at the time of the alleged deprivation.
When the assessed needs were established for the chargeable service being provided.
What the funds relating to the asset(s) was spent on.
In cases where the service user is considered at risk of financial abuse by relatives/others, a referral will be made to Safeguarding services.
If a safeguarding enquiry finds financial abuse has resulted in the deprivation of assets then notional capital will not be applied to the financial assessment.
If a police investigation finds that financial abuse or theft has resulted in the deprivation of assets then notional capital will not be applied to the financial assessment.
Funds recovered as a result of a safeguarding enquiry or police investigation will be applied as savings. This will be subject to the financial assessment rules on treatment of savings.

If deprivation of assets is alleged, then the service user / financial representative will be invited to a review. As part of the review further information will be required, based on the following 3 principles which are used for proving deprivation of assets cases as per the Act section 11.4 and also recognised by the Ombudsman:

Whether avoiding or reducing a charge was a significant motivation;
The timing of the disposal of the asset. At the point the capital was disposed of could the person have had a reasonable expectation of the need for care and support, even if at this point they were not yet receiving this; and
Would the person have had a reasonable expectation of needing to contribute towards the cost of this either now or at some future point.

Evidence of the 3 principles above, what happened to the asset, and the reason for its disposal will be required during the review.

Examples could include:

For capital assets, acceptable evidence of their disposal would be: (a) A trust deed; (b) Deed of gift; (c) Receipts for expenditure; (d) Proof debts have been repaid.

Letters from GP’s and medical records of the long term health needs of the person at the time the asset was disposed.

Evidence of where the person was living at the time of the asset disposal and if any care and support was being provided.

Social Services Charging Policy