Using life insurance to recover social assistance: beware of the danger

Jurisprudence warns against the use of life insurance by an elderly person to benefit from social assistance.

Social benefits recoverable on the death of the beneficiary: the Ministry of Solidarity and Health indicates on its website: “Social aid for adults concerns the elderly, disabled people and people requiring help with reintegration. Some of the social assistance benefits may have the character of recoverable advances.”

And the ministry specifies that: “The total amount of the sums paid for social assistance at home, medical assistance at home, the specific dependency benefit or the payment of the daily rate may be recovered from the succession if the estate assets are greater than 46,000 euros.

Finally, the same memorandum specifies that: “if the subsidiary disability allowance is no longer recoverable since 1er January 2020, the solidarity allowance for the elderly can be recovered under the following conditions: “The amount of the recovery limit for sums paid under ASPA and ASI rises from 1er January 2021 at: 7,354.12 euros per year for a single person and 9,838.68 euros per year for a couple (married, cohabitant, PACS). The subject of recovery is therefore of concern for the beneficiary, who may seek to exonerate himself from it, in particular by resorting to life insurance.

Use of life insurance

Article L. 132-8, 2° of the Code of Social Action and Families states as follows: “Remedies are exercised, as the case may be, by the State or the department:

1° Against the beneficiary who has returned to better fortune or against the estate of the beneficiary;

2° Against the donee, when the donation was made after the application for social assistance or within the ten years preceding this application;

3° Against the legatee;

4° Alternatively, against the beneficiary of a life insurance contract taken out by the beneficiary of social assistance, up to the fraction of the premiums paid after the age of seventy. When the recovery concerns several beneficiaries, it is carried out in proportion to the sums paid to each of them. »

It is on this text that the Court of Cassation relied in a judgment of March 3, 2021 to reclassify as a gift a life insurance contract taken out by a 77-year-old man, four years before going to live in a retirement home and claim the benefit of social assistance at the expense of his department.

Our opinion : the recovery at the time of his death of certain social aid received during his lifetime by a beneficiary raises the question of its legitimacy. The fact that the grip of the recovery is “with variable geometry” does not facilitate the acceptance of the measure by those who are victims of it.

Hence the wish of certain beneficiaries and/or their heirs or legatees to avoid it. Let them be aware, however, that the business is not easy and that the path of life insurance is perilous.

In the particular case mentioned above, the recipient of social assistance had paid almost all of his assets into the life insurance contract. However, as the saying goes, he who kisses too much, hugs badly.

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