Decision : Upheld
Decision date : 04 Dec 2019
The Ombudsman's final decision:
Summary: Mrs B complains that the Council was wrong to decide that her father, Mr C, deliberately deprived himself of assets and reduced his capital so as not to have to pay for his care costs. There was fault in the way the Council carried out its assessment because it did not take Mr and Mrs C’s joint ownership of their former home into account. It also did not properly consider whether the costs of renovating Mr C’s current home should be deducted from the calculation of his capital. The Ombudsman considers that a review of the financial assessment is a suitable remedy for any injustice caused to Mrs B and her father.
- Mrs B complains that, when deciding that her father, Mr C, deliberately deprived himself of assets and was liable for the full cost of his care package, the Council failed to:
- answer questions that he and his representatives raised about that decision;
- consider relevant evidence that the money paid into trust was to repay Mrs B for works undertaken to modify their annex for her parents’ use; or
- take into account that the house was jointly owned by both Mr C and the late Mrs C at the time that it was put in trust and that the deprivation of assets was considered to have occurred.
The Ombudsman’s role and powers
- We investigate complaints about “maladministration” and “service failure”. In this statement, I have used the word “fault” to refer to these. We must also consider whether any fault has had an adverse impact on the person making the complaint. I refer to this as “injustice”. If there has been fault which has caused an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
- If we are satisfied with a council’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended)
How I considered this complaint
- I have considered Mrs B’s written complaint and supporting correspondence and discussed her complaint with her solicitor. I have made enquiries of the Council and considered its response and supporting papers. I have had regard to relevant legislation and guidance as set out below. I have also sent Mrs B’s solicitor and the Council a draft decision and considered their comments.
What I found
- The Care Act 2014 (the Care Act) came into force in April 2015. It provides a single legal framework for the provision of social care. It consolidates and replaces previous law and guidance. The Care and Support Statutory Guidance 2014 (Statutory Guidance) was issued in support of the Act.
- The Care Act and Statutory Guidance replaced Fairer Charging Policies for Home Care and other non-residential Social Services (2013) and Charging for residential accommodation guidance (CRAG) (2014) in respect of charging for care.
Charging and financial assessment
- Section 14 of the Care Act explains the power of the local authority to charge for the cost of care. Section 17 says a local authority must assess the person’s financial resources and any amount the person would be likely to pay towards the cost of meeting the needs for care and support once it has decided on eligibility.
- The Care and Support (Charging and Assessment of Resources) Regulations 2014 set out a local authority’s powers to charge, how financial assessments are to be carried out, the treatment of income and capital, and income and capital to be disregarded. Chapter 8 of the Statutory Guidance also provides guidance on Charging and Financial Assessment and covers common issues for charging.
- Councils can decide in their policies not to charge service users at all for non-residential services, but most do charge. Most councils charge people the full cost of providing non-residential care if their capital exceeds £23,250. People with between £14,250 and £23,250 in capital pay an amount towards their care. People with less than £14,250 do not contribute anything.
Treatment of capital
- Annex B of the Statutory Guidance covers the treatment of capital. The financial assessment looks at all of a person’s assets, decides which is capital and which is income, and assesses those assets according to the regulations and guidance. A local authority must therefore also refer to Annex C on the treatment of income and Annex E on deprivation of assets.
- In some circumstances a person may be treated as possessing a capital asset even when they do not actually possess it. This is called notional capital. Notional capital may be capital which the person deprived themselves of in order to reduce the amount of charge they have to pay for their care. (Annex B, paragraphs 29 and 30)
- When undertaking a financial assessment, a local authority may identify circumstances that suggest that a person may have deliberately deprived themselves of assets in order to reduce the level of the contribution towards the cost of their care. (Annex E, paragraph 3)
- It is important that people pay the contribution to their care costs that they are responsible for. This is the key to the overall affordability of the care and support system. A local authority should therefore ensure that people are not rewarded for trying to avoid paying their assessed contribution. (Annex E, paragraph 4)
- However, there may be good reasons for a person depriving themselves of an asset. A local authority should therefore consider the following before deciding whether deprivation has occurred:
- whether avoiding care and support charge was a significant motivation;
- the timing of the disposal of the assets - at the point the capital was disposed of could the person have a reasonable expectation of the need for care and support, and;
- did the person have a reasonable expectation of needing to contribute to the cost of their eligible care needs? (Annex E, paragraph 11)
- Mrs B’s mother and father, Mr and Mrs C, were homeowners and previously lived around half an hour’s drive from Mr and Mrs B’s current home.
- Mr C has Parkinson’s disease. In March 2011, Mrs B approached the Council to ask about a grant, as her father was unable to use the bath and needed a level-access shower.
- The Council notes record that, in May 2013, Mrs B contacted the Council to enquire about support for her father as she was very concerned about a decline in her father’s health, both in terms of his mobility (following a knee replacement operation) and Parkinson’s.
- At the end of that month, Mr C was admitted to hospital due to a urinary tract infection (UTI) and reduced mobility. Having made progress and, with his mobility improved, he was discharged home and his wife continued to provide care for him, with no care package in pace.
- In July 2013, a social worker visited Mr and Mrs C for a benefits check. The social worker completed applications for higher rate attendance allowance for Mr C and attendance allowance for Mrs C. The GOV.UK website explains that:
“Attendance Allowance helps with extra costs if you have a disability severe enough that you need someone to help look after you.
It’s paid at 2 different rates and how much you get depends on the level of care that you need because of your disability.”
- In September 2013, Mr C was awarded higher rate attendance allowance. Mrs B then contacted the Council to say that her mother had a serious illness. She explained that her mother and father may need more assistance as her mother was struggling as Mr C’s main carer due to her own care needs.
- An initial assessment was undertaken in October 2013, and a support package was put in place for four weeks to help Mr C with dressing / undressing, bathing, getting in and out of bed, food preparation and taking medication. Mr B has suggested that the care package was to help Mrs C rather than Mr C, due to her illness, but the Council’s records indicate that the care package was for Mr C. Following a review, the package continued for a further month before it was cancelled.
- The Council undertook a financial assessment to determine whether Mr C would need to contribute towards his care. Mr B’s capital was below the threshold and Mr and Mrs C’s home was disregarded as their main home. The Council assessed Mr C’s income and concluded that he would not have to make any financial contribution.
- In December 2013, Mr and Mrs B bought their present home which has an annex next door, converted from a former stable building and treated as a separate dwelling for Council Tax purposes since 1993.
- Mr B has explained that they had chosen to purchase a house with an annex so that Mr and Mrs C would be close by and he and his wife would be able to look after them. In order to purchase their present home and its annex, they extended the term of their mortgage by 12 years and increased the mortgage amount by £300,000.
- A note of a call from Mrs B’s solicitor to Mrs B in early March 2014 referred to the proposed sale of Mr and Mrs C’s home. The note said that “[Mrs B] indicated that her mother wanted the survivor to get all but clearly when the house is sold and [Mrs B] has spent money converting the annex she wants 90% of the net proceeds to go to [Mrs B]”.
- Mr C was admitted to hospital again in late March 2014 with cerebral irritation resulting from another UTI. He was discharged in late April. Mr C’s needs were reassessed as his previous care package had been cancelled. Mrs C was in poor health which affected her ability to support her husband, so the Council agreed to put in place a twice-daily care package for Mr C. Mr B has explained that at this stage Parkinson’s was not having any significant impact on Mr C’s health, and this is supported by his medical records.
- In order for Mr and Mrs C to move into the annex, extensive renovation works were needed to convert it from an inaccessible two-storey dwelling to an accessible single-level dwelling suitable for a person with disabilities. Mr B has provided receipts for various works undertaken and items purchased in connection with the works, totalling £69,402.13.
- Mr and Mrs C moved into the annex on 6 October 2014. The Council completed an initial assessment of Mr C’s needs. Mr C declined respite care but would consider day care. Mrs B raised concerns that her father’s needs had increased and his mobility decreased, and he now needed support in the evening as well.
- On 7 November 2014, Mr and Mrs C signed a deed putting their home into Trust and agreeing that 90% of the net proceeds of the sale of their home would go to Mrs B. The remaining 10% would go to Mr and Mrs C (or the surviving partner).
- The house was sold in February 2015. £78,892.92 of the net sale proceeds were paid to Mr and Mrs B, with £8,765.00 paid to Mr and Mrs C.
- Sadly, Mrs C passed away in April 2015.
- The Council reassessed Mr C’s needs in April 2015 and agreed to “double-up” care. It informed Mr C of his indicative personal budget. It also explained that a new financial assessment would need to be completed following the sale of the house. The assessment also recorded that “[Mrs B] is owed money for modifications of the bungalow”.
- The Council undertook a further assessment of Mr C’s needs in September 2015 and authorised his support plan for a further 26 weeks. The assessment noted that a further financial assessment was still required. It also stated that “Mr C is currently living in a bungalow… which was adapted by [Mrs B]. Some of the sale of this property would be owed to [Mrs B] for the modifications”.
- The Council did not undertake the financial assessment until 2017. It then asked Mrs B for details of the equity release from Mr and Mrs C’s former home, and for verification of the conversion of the annex.
- In February 2018, the Council completed its assessment. It decided that Mr C should be liable for the full costs of his care from February 2015. Having regard to the guidelines on deprivation of assets it considered that, at the time the property was sold, Mr C would have had a reasonable expression of the need for care and support. It noted that some of the proceeds of the sale had been used to adapt the annex, but that Mr C had retained no interest in the annex. It concluded that there had been deprivation of assets and that Mr B was liable for the cost of his care.
- There followed further correspondence on this matter between the Council, Mrs B and her solicitor. However, the Council maintained its position. In the meantime, it has continued to fully fund Mr C’s care.
- I have considered the way that the Council has undertaken the financial assessment with regard to the Care Act Guidance.
- Mr and Mrs B have explained that Mrs B’s parents wanted to live close to them in a suitable adapted property. This would allow Mrs C to continue to look after her husband as she helped him recover from a knee replacement operation. Mrs B would also be able to provide additional help to Mrs C, when needed, in looking after her husband, after her diagnosis with a serious illness.
- Mr and Mrs B have explained that the work to convert the annex from an inaccessible two-storey dwelling to a level-access dwelling suitable for a person with a disability was substantial. However, the Council has only taken into consideration receipts totalling £7,564.56, despite them on several occasions providing receipts totalling £69,402.13 for the full cost of conversion.
- The Council has questioned why there was no change in ownership to reflect the payment to Mr and Mrs B. In response, Mr and Mrs B have explained that, with a mortgage of £300,000 on their home, it was unlikely that the mortgage lender would consent to a change in ownership. Moreover, Mr and Mrs C would have been unable to place a second charge on their own property, as there was already an encumbrance on the property due to equity release.
- Mrs and Mrs B have explained that the reason for the Trust was to ensure that they received reimbursement for the monies spent on renovating the annex into which Mr and Mrs C moved. They say that the Deed of Trust was not 100% in their favour which is indicative of repayment rather than an attempt to circumvent the rules. They received £78,892.92 and have provided receipts for the works totalling £69,402.13.
- They have explained that had the annex not been converted, Mrs B would have been unable to provide support to her mother and, for over five years, to her father, and the cost to the public purse would have been much greater. They consider that the Council should reconsider its position (which was only arrived at more than three years after the Deed of Trust was signed) and recognise the benefits that Mrs B has provided to both Mr C and the Council.
- The Council has explained that in carrying out the financial assessment it took into account the receipts for conversion costs totalling £7,564.56. However, it says it would have expected Mr C to have retained a share in the annex and / or the sale proceeds.
- There was fault in the way that the Council undertook its final assessment because it only took into consideration receipts for works undertaken totalling £7,564.56. It has not considered the receipts totalling £69,402.13 which Mr and Mrs B have provided on several occasions.
- Given the very substantial difference between the two sums, I consider that it would be appropriate for the Council to review its financial assessment. This review should take into consideration taking the full receipts and comments provided and the rationale that Mr and Mrs B have provided for their actions.
- The Council has agreed to review its financial assessment.
- The Council’s position is that Mr C would have been aware that he would need care and support and that he would be liable for the cost of that care once the house was sold.
- Mr and Mrs B have provided additional medical information about Mr C and comments on why they disagree with the Council’s assessment that it was reasonable to predict that he would continue to need care. They say that they were not to know that Mrs C would pass away so quickly after moving in and that her passing would have such a major effect on Mr C’s health.
- As the Council will be reviewing its financial assessment, I consider that it would be appropriate for the Council to take these additional records and comments into consideration as part of that review. I have therefore made no findings on this matter.
Share in the property
- At the time that Mr and Mrs C sold their home, they each had an equal share in the property. The Council should therefore have considered the question of deprivation of assets separately in respect of Mr and Mrs C. It did not do so and this was fault.
- The Council has agreed to do so as part of its review of the financial assessment.
Applicable law and guidance
- Mr and Mrs B have pointed out that, at the time that the trust was set up, the Care Act and associated guidance had not yet come into force. They have therefore questioned what law and guidance should apply to the financial assessment.
- The Council has agreed to take this into consideration when it reviews the financial assessment.
- The Council has agreed to review its financial assessment. In doing so, I recommend that the Council should within three months:
- review its decision in light of the fact that Mr and Mrs C owned equal shares in their former home;
- reconsider whether some or all of the renovation costs should be excluded from the calculation of Mr C’s capital;
- take into consideration Mr and Mrs B’s comments and any further comments and supporting information that they wish to provide in respect of the expectation that Mr C would need care and the motivation for their actions;
- consider what law and guidance is applicable and have regard to that guidance in conducting the review; and
- once it has completed the review, consider whether there has been any fault causing injustice which would warrant a remedy.
- I have closed my investigation because I consider that the Council’s agreement to review its financial assessment represents an appropriate remedy for the fault in the way it carried out its original assessment.
Investigator's decision on behalf of the Ombudsman