Local authority treatment of pre-paid funeral plans

Has anyone had experience of the local authority arguing that a pre-paid funeral plan is an “asset” for the purposes of care home fees funding assessment please? In our client’s case, the local authority are saying that they can assess whatever was paid for the funeral plan less an admin fee as capital, regardless of whether the plan has a surrender value.

Ben Leach
Molesworths Bright Clegg

Hi Ben,

s.17 Care Act 2014 gives the local authority ‘carte blanche’ to simply make as assessment based on the facts as they see them as to what the person who requires care ought to contribute.

From my experience if the purchase was recent and dropped the individual under £23,250 then they may consider the purchase deprivation.

Depends on the facts of the case. I’m not aware of any case law on PPFPs.

Richard Bishop

I can’t see how a pre paid funeral plan is, in itself, a capital asset for the purposes of care home fees funding rules as its surrender value would be nil or virtually nil. However, you may want to look at the Local Government Ombudsman’s decision Doncaster Metropolitan Borough Council (15 011 095) of 2016 where the purchase of a pre paid funeral plan was seen as a deliberate deprivation of assets (and therefore notional capital when assessing care fees funding) based on the particular facts.

Mary Ambrose
Thomson Reuters (Practical Law)

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