Summary: Mrs X says the Council wrongly decided her mother deliberately deprived herself of capital with the intention of decreasing her liability for care charges. There was fault by the Council because it did not properly apply the test on deprivation of capital. The Council agreed to exclude the property concerned from consideration as notional capital.

The complaint

1. Mrs X says the Council wrongly decided her mother deliberately deprived herself of capital with the intention of decreasing her liability for care charges.

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The Ombudsman’s role and powers

2. 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)
3. 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)

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How I considered this complaint

4. I reviewed the complaint and background information provided by Mrs X. I sent a draft decision statement to Mrs X and the Council and considered the comments of both parties on it.

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What I found

Charging for permanent residential care

5. The Care Act 2014 and the associated Care and Support Statutory Guidance (“the guidance”) set out the rules the Council must follow when undertaking a financial assessment to decide how much a person has to pay towards the costs of their residential care.
6. The law states that people who have over the upper capital limit (currently £23,250) are expected to pay the full cost of their residential care home fees. Once their capital has reduced to less than the upper capital limit, they only have to pay an assessed contribution towards their fees.

Deprivation of capital

7. Annexe E of the guidance covers issues relating to the deprivation of capital. The guidance states the following.
• When undertaking or reviewing a financial assessment, a local authority may identify circumstances that suggest a person may have deliberately deprived themselves of assets to reduce the level of the contribution towards the cost of their care;
• People should be treated with dignity and respect and be able to spend the money they have saved as they wish – it is their money after all. Whilst the Care Act 2014 represents an important step forward in redefining the partnership between the State and the individual, it is important people contribute to the care costs they are responsible for. This is important to the overall affordability of the care and support system. A local authority should therefore ensure people are not rewarded for trying to avoid paying their assessed contribution.
• But deprivation should not be automatically assumed. There may be valid reasons why someone no longer has an asset and a local authority should ensure it fully explores this first;
• Deprivation of assets means where a person has intentionally deprived or decreased their overall assets to reduce the amount they are charged towards their care. This means that they must have known that they needed care and support and have reduced their assets to reduce the contribution they will be asked to make towards the cost of that care and support;
• A person can deprive themselves of capital in many ways, but common approaches may be: (a) a lump-sum payment to someone else, for example as a gift; (b) substantial expenditure has been incurred suddenly and is out of character with previous spending.
8. Paragraph 8.27 of the guidance states “People with care and support needs are free to spend their income and assets as they see fit, including making gifts to friends and family. This is important for promoting their wellbeing and enabling them to live fulfilling and independent lives. However, it is also important that people pay their fair contribution towards their care and support costs”.

Background to the complaint

9. Mrs X has power of attorney to act on her mother’s behalf. In 2018, Mrs X’s mother was 98 years old. She had a fall at her home and was admitted to hospital. When her mother recovered from the fall, Mrs X says she was concerned about her health and wanted to put her affairs in order. Her mother instructed solicitors who executed a power of attorney in favour of Mrs X. The solicitors also transferred her mother’s home to Mrs X and her daughter. The trust document states the reason for the transfer was to ensure Mrs X’s mother’s wishes for the property were followed and to provide her with peace of mind about the settlement during her lifetime.
10. Mrs X’s mother’s health deteriorated. She had further falls at home. The Council provided a few reablement service and then continued to provide domiciliary care after the end of the free service period. However, Mrs X points out her mother continued to pay for the care she needed at home out of her own pocket.
11. By November 2018, Mrs X’s mother needed assistance from the Council to meet her residential care needs.
12. In January 2019, the Council carried out a financial assessment to work out whether any contribution from Mrs X’s mother was necessary. The Council included the property previously owned by Mrs X’s mother in its assessment of the capital she held. The Council concluded it was reasonable for the family to expect that further care may be required for Mrs X’s mother and so the property was included in the financial assessment. After a 12 week property disregard, the Council considered Mrs X’s mother was liable to pay the full cost of residential care.
13. Mrs X appealed against the Council’s decision in April 2019 but was unsuccessful.
14. She made a first stage complaint to the Council in August 2019. She did not agree with the Council’s view that it was a reasonable expectation to assume her mother would need care and support. She said the Council’s case notes between 2018 and 2019 did not state her mother would require full time assisted care away from her home until February 2019. Mrs X said it was more likely her mother would have died in her own home.
15. The Council explained it conducts financial assessment in accordance with its charging policy and the Care Act 2014 regulations. The charging policy says the Council will consider the following before deciding whether deprivation has occurred:
• Whether avoiding the care support 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 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.
16. The Council said Mrs X’s mother’s circumstances and the fact that care was provided to her from the point she sustained a fall in January 2018 led to its decision that it was reasonable to expect her mother may have needed to contribute towards her care costs in future.
17. The Council accepted the transfer of the property was not completed with the intent to deprive Mrs X’s mother of capital to avoid paying a larger contribution to her residential care. But it concluded there was a reasonable expectation of the need for care and support.
18. Mrs X escalated the complaint but the Council’s view remained the same.
19. Mrs X says the basis of her complaint to the Ombudsman is that the decision to include the property in the financial assessment was made on the erroneous conclusion that the transfer was a deprivation by her mother of the capital represented by the property for the purpose of decreasing the amount she might be liable to pay towards the costs of her needs.
20. Mrs X says the Council’s decision appears to be based on the proposition that because care was provided to her mother by the Integrated Urgent Care Team following her hospital admission it was reasonable to expect her mother may have needed to contribute towards her care in the future. Mrs X says the Council used that limited evidence to infer that her mother made the transfer to decrease the amount she might be liable to pay. Mrs X says at the time the property was transferred there was no immediate prospect of her mother needing further care.
21. Mrs X says her mother made no attempt to require the Council to contribute towards the cost of her care after the transfer until January 2019 when she had suffered two further falls and her condition deteriorated.
22. Mrs X says the Council is treating one of the criteria in its charging policy (that is the expectation of a need to contribute to care) as paramount and ignoring the other criteria. She says the Council did not consider the criteria in combination as it should have done.

Finding

23. I find fault by the Council. The Council needs to apply a three part test in deciding whether a deprivation of assets has occurred, by considering:
• If avoiding paying for care fees was a significant motivating factor
• Whether a need for care was foreseeable
• Whether a need to pay for care was foreseeable
24. On the second and third points, the Council made a sound decision that it was reasonably foreseeable that Mrs X’s mother needed care, and would be required to pay for it. Indeed she was already in receipt of domiciliary care at the point the Trust was drawn up.
25. However, the Council is frank about the fact the first test was not met, in stating:

“I do acknowledge that the transfer of the property at…. was not completed with the intent to deprive Mrs… of capital to avoid paying a larger contribution to her residential care however in line with the Care Act the property will be included as notional capital in the financial assessment of Mrs.., as there would have been a reasonable expectation of the need for care and support.”

26. But as the first criterion was not engaged, the Council cannot say a deprivation occurred. All three parts of the test must be satisfied.
27. There was fault in the way the Council made its decision. As a remedy for the injustice in consequence of the fault, the Council agreed to exclude the property from consideration as notional capital.

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Final decision

28. There was fault by the Council which caused an injustice to Mrs X’s mother. The Council agreed to a new financial assessment which excludes the property from consideration as notional capital.

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Investigator's decision on behalf of the Ombudsman