Cornwall Council (19 014 633)

Category : Adult care services > Assessment and care plan

Decision : Upheld

Decision date : 15 Feb 2021

The Ombudsman's final decision:

Summary: The Ombudsman has found fault with the way the Council assessed Mr C’s finances to decide whether he was eligible for Council funding. The Council’s care home fees charges may be too high. The Council has agreed to apologise and carry out a fresh financial assessment.

The complaint

  1. Mrs B complains on behalf of her father, Mr C who has passed away. She says the Council has not properly assessed her father’s finances when it decided not to fund his care at a care home.

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The Ombudsman’s role and powers

  1. 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)
  2. 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

  1. I have discussed the complaint with Mrs B. I have considered the documents that she and the Council have sent, the relevant law, guidance and policies and both sides’ comments on the draft decision.

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What I found

Law, guidance and policy

  1. The Care Act 2014, the Care and Support Statutory Guidance 2014 (updated 2017) and the Care and Support (Charging and Assessment of Resources) Regulations 2014 set out the Council’s duties towards adults who require care and support and its powers to charge. The Council also has its own policies.
  2. The rules for residential care (care homes) are as follows.

Financial assessment - capital

  1. If a person needs residential care, the Council will assess their capital and income. The upper capital limit is currently set at £23,250 and the lower limit at £14,250. A person with assets above the upper capital limit will have to pay for their own care.

Financial assessment – income – personal expenses allowance

  1. If a person has capital below £23,250, the Council will pay their care costs, but the person may have to pay a contribution from their income towards the fees.
  2. If the person is paying a contribution, the local authority must leave the person with a minimum amount of income known as the Personal Expenses Allowance (PEA). The PEA amount is set out in the regulations. Anything above this may be taken into account in determining charges.
  3. A local authority may sometimes disregard a property as capital, for example if a spouse is living in the property. In those case the local authority should consider whether the PEA is sufficient to enable the person to meet any resultant costs. For example, allowances should be made for fixed payments (like mortgages, rent and Council Tax), building insurance, utility costs (gas, electricity and water, including basic heating during the winter) and reasonable property maintenance costs.

Pension and annuity

  1. Where a person is in a care home and has a spouse or civil partner who is not living in the same care home and is paying half of the value of their occupational pension, personal pension or retirement annuity to their spouse or civil partner, the local authority must disregard this payment.

Deprivation of assets

  1. 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. Assets can include capital and/or income.
  2. CASS guidance says: ‘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.’
  3. A local authority should consider the following before deciding whether deprivation of assets has occurred:
    • (a) whether avoiding the care and support charge was a significant motivation in 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?
    • (b) did the person have a reasonable expectation of needing to contribute to the cost of their eligible care needs?

Financial information and advice

  1. The guidance says councils should include the following aspects of financial information and advice:
    • understanding care charges
    • ways to pay
    • money management
    • making informed financial decisions
    • facilitating access to independent financial information and advice

What happened

  1. Mr C moved into a care home in April 2015. The Council told Mrs C that Mr C would not be eligible for Council funding as he and Mrs C co-owned a second property which was worth more than £23,250. Mr C’s share of the property could be used to fund the care fees.
  2. The Council’s letter confirming this decision said that if Mrs C wanted to make an application for funding assistance in the future, the Council would carry out a financial assessment. It added: ‘It is important to note that any significant use of [Mr C’s] capital which is above a reasonable level, and other than towards the cost of his care fees might be deemed as deprivation and the monies might be treated as if he still owned them.’
  3. Mr and Mrs C had difficulty selling their second property but finally did so on 14 October 2016.
  4. Mrs B contacted the Council in 2018 as Mr C had run out of funding. Mrs B says Mr C’s capital was down to £2,000, far less than the threshold of £23,250. The Council carried out an ‘out of funds calculation’ based on the amount of capital Mr C received when he sold his half of the second property on 14 October 2016. The calculation made the following assumptions:
    • The weekly care home fee was £780.
    • Mr C should have spent the majority of his weekly income (£276) on the fees, after deduction of the PEA and a small amount for the savings disregard.
    • Mr C should have spent £503 of his capital towards the care home fees per week.
  5. The Council officer spoke to Mrs B in January 2019 and said that, according to his ‘out of funds calculation, Mr C had capital to self-fund for 212 weeks (until November 2020). The officer told Mrs B that ‘gifts of funds are not allowed under the Care Act.’
  6. Mrs B said it was wrong to start the calculation on 14 October 2016 as Mr C had self-funded his care since April 2015. He had already made payments of £124,000 so this should be taken into account, but the finance officer said that was not the case.
  7. The officer had also treated some payments as ‘deprivation of assets’. Mrs B said Mr C had given the same gifts to all his grandchildren, before and after he went into the care home, but the finance officer said that gifts of funds were not allowed. The finance officer said air fares had also been paid out. Mrs B said her parents had a timeshare which they had been trying to sell and Mr C always paid for the family airfares to go on holiday.
  8. Mrs B formally appealed the decision in February 2019. She said the Council:
    • Had failed to apply the 50% income disregard for the annuity and personal pension.
    • Had not considered whether the PEA was sufficient to allow Mr C to pay the costs towards the home.
    • Used the current figures for income, PEA and savings disregard but these may have changed over the years.
    • Worked on the assumption that £104,726 capital was available on 14 October 2016, as this was the date the property was sold. However, Mr C started paying the fees in April 2015 and by October 2016 he had already paid in excess of that amount.
    • Used the weekly care home fee of £780, when the fee was £849.
    • Said there had been a deprivation of assets but ignored that there were past patterns of spending so the spend was not done with the intention to reduce the amount spent towards care.
  9. Mrs B said that, because of the criticism of her spending, Mrs C was now questioning any money she spent. She was fearful that the house would lose its value if it was not kept in a good state of repair. She said she and Mrs C had suffered anxiety and worry over the issue and their mental health had suffered.
  10. Sadly, Mr C passed away on 14 April 2019.
  11. The Council asked for a lot of additional information over the following months and carried out a further financial assessment.
  12. Mrs B clarified some of the spending the Council questioned:
    • Two payments of £6,713 in October 2016 were gifts to Mr and Mrs C’s grandchildren to pay for a car when they were adults. The two other adult grandchildren had already received similar payments.
    • A payment of £2,500 was a gift to Mr and Mrs C’s son to assist in his tax bill.
    • Payments of £685, £672 and £907 in March and April 2017 related to the maintenance and painting of Mr and Mrs C’s home.
    • Payment of £240 in June 2018 related to repairs to the home.
    • Payments of £1,195 in June 2018 and £223 in June 2017 related to flights costs for the family holidays which were always paid by Mr and Mrs C.
  13. The Council wrote to Mrs B in August 2019 and said:
    • It upheld her complaint that the calculation had left out the fees paid between April 2015 and October 2016 and said it would redo the calculation.
    • Half of a person’s pension or retirement annuity must be disregarded if they live in a care home and it is being paid to the spouse. However, it was difficult to evidence that half of an annuity was being paid to a spouse if the money was paid into a joint account. It partially upheld the complaint and agreed to deduct 50% of Mr C’s annuity for Mrs C’s benefit. It did not change its position on the pension.
    • It would consider reasonable property costs but the external decoration of the property was not a reasonable cost.
    • The 2 gifts of £6,713 to 2 grandchildren, a cash gift to Mr C’s son of £2,500 and payment of family holidays were a deprivation of assets. The Council said it followed the Office of the Public Guardian’s guidance on gifts. This said the attorney would have to consider whether any gift could affect the person’s ability to meet their living expenses now and in the future. It also referred to the CASS Guidance and said that Mr C was already living at a care home when the gifts were made. Any gifts, clothing and expenses should have been paid from his PEA.
  14. The Council said it had paid Mr C’s fees from June 2018 to March 2019 and Mr C’s debt was £31,413.

Ombudsman’s investigation

  1. Mrs B then came to the Ombudsman as she was not satisfied with the Council’s response.
  2. Mrs B explained that, in terms of her parents’ income, Mr C was always the main breadwinner as Mrs C never worked full time. Mr C’s pension was the largest contribution to the couple’s income.
  3. The Council made the following additional comments in relation to the complaint.
  4. In relation to the maintenance works, it said: ‘There was no evidence the contribution by [Mr C] to the maintenance was necessary as there was no evidence that the work was required to be carried out.’ It also said there was no evidence that Mr C needed to contribute to the works as opposed to Mrs C funding the works, as Mrs C had sole use of the property. The works were considered to be wear and tear expenses rather than necessary structural repairs.


  1. The Council has already upheld a lot of Mrs B’s initial appeal and clearly there was a lot of fault in its first assessment of the finances.
  2. The Council applied the incorrect rate of the care home fee and started its ‘out of funds calculation’ from the date of the sale of the second property, ignoring the fact that Mr C had already been in the care home for a year and had been paying privately all that time. These faults are concerning. If Mrs B had not been so diligent in both reading the full CASS Guidance and then going through the Council’s assessment in great detail to point out the flaws in the assessment, this flawed assessment would have been the assessment the Council used to make decisions.
  3. The latest assessment by the Council is also flawed.
  4. When Mrs B came to the Council asking for assistance, Mr C was already well under the threshold of £23,250 to be eligible for Council funding.
  5. The Council could check whether a deprivation of assets had taken place and take this into account. However, there is nothing in the Care Act 2014, the Regulations or the CASS Guidance which requires the Council to do an ‘out of funds calculation’. In doing this calculation the Council sought to retrospectively limit Mr C’s personal expenditure to the PEA (plus the savings disregard). That was fault by the Council. The PEA applies in cases where the Council is funding the residential care and the person is paying their contribution. This was not the case here.
  6. The Council said it would not disregard half of Mr C’s pension because he paid it into a joint account. Firstly, the regulations around pension and the joint income relate to people who are receiving Council funded care which was not the case here therefore the Council was applying incorrect regulations. Secondly, even if the regulations had been relevant, Mr C said he wanted Mrs C to have half of his pension and this was his intention. The Council did not consider this in its decision making, but based the decision on whether the pension was paid in a joint or separate account which was not the correct test.
  7. I have also investigated whether the Council applied the correct law, guidance and policies when it decided that there had been a deprivation of assets.
  8. I am concerned about the Council’s refusal to allow relatively small amounts of money which Mr C paid towards maintenance works to his house. The Council disallowed these costs as it said the works were not necessary.
  9. Firstly, it is not clear how the Council decided what was necessary and what was not. Secondly, the Council was not applying the correct test. The test it applied was only relevant in cases were a care home resident’s expenditure of income was restricted to the PEA which was not the case here, as I have already explained. Also, in its comments to the Ombudsman, the Council seemed to suggest that, as Mr C did not live in the property, he no longer had any right or duty to spend money on it. This was not in line with the CASS Guidance which said councils should consider costs to a property where the spouse was still living in the property.
  10. In terms of some of the other expenditure which the Council disallowed, I appreciate that it was a finely balanced issue in this case. I accept that Mr C and the family knew, at the time of the expenditure, that Mr C was paying his care home fees. I also note the Council explained to them in its 2015 letter that it could consider ‘significant use of [Mr C’s] capital which is above a reasonable level’ as a deprivation of assets.
  11. However, I have not seen enough evidence or explanation in the Council’s documents to explain why the Council felt a deprivation of assets took place and how it considered that the avoidance of paying care home fees was a significant motivation in the expenditure. I am concerned that the Council applied incorrect tests when it made its decisions.
  12. Mrs B said there was a pattern of spending in terms of the gifts to the grandchildren and the payment for holiday flights. I would have expected the Council to ask for evidence of this expenditure and then to show how it considered this as part of its decision making. The Council did not do this.
  13. Instead, Council officers repeatedly said that gifts were not allowed under the Care Act which was incorrect. The Council also said that all gifts should be made from the PEA which was also incorrect. The application of these incorrect tests was fault. The Council has not addressed the question how it decided that avoidance of care home fees was a significant motivation in the expenditure and appears to have placed a blanket ban on any expenditure by Mr C in excess of his PEA.
  14. I also note that Mrs B says Mr C’s capital was around £2,000, well under the £23,250 threshold when she approached the Council for help in 2018. This may therefore have offset the expenditure the Council regarded as a deprivation of assets and the Council has not addressed this in its assessment. The Council’s approach was to say Mr C’s capital should be a lot higher, based on its ‘out of funds calculation’ and said that any expenditure outside of that calculation was a deprivation of assets.
  15. The Council’s fault caused injustice to Mr C and his family as it is not certain whether the Council’s charges for the care home fees are correct. However, I cannot say what the correct charges would be without a fresh financial assessment.
  16. I therefore recommend the Council reassesses Mr C’s finances. This assessment should be based on the capital and income that Mr C had when he approached the Council for help in 2018, and not on the ‘out of funds calculation’. If the Council identifies expenditure that was a deprivation of assets, it should explain how it has come to that conclusion with reference to the test set out in the CASS Guidance and explain why it was satisfied that avoiding the payment of care charges was a significant motivation in the expenditure.

Response to the draft decision

  1. In its response to the draft decision, the Council agreed there had been errors in Mr C’s financial assessment and it agreed to carry out a fresh assessment.
  2. The Council also accepted that the out of funds calculation had been inappropriately used.
  3. The Council agreed to address the use of the out of funds calculation as part of a general review of its financial assessment process. It said it would ensure that the out of funds calculation was no longer used retrospectively in the manner complained about. It would not use it to determine a financial assessment or make a decision about deprivation of assets. However, the Council felt there could still be a role for the calculation as part of its duty to provide financial advice.

Agreed action

  1. As the Council has agreed to stop using the out of funds calculation in its financial assessment, I will not make a further recommendation about this.
  2. The Council has agreed to take the following actions within one month of the final decision. It will:
    • Write to Mrs B and apologise for the fault.
    • Carry out a fresh assessment of Mr C’s finances and adjust any outstanding invoices as a result of the assessment.

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Final decision

  1. I have completed my investigation and found fault by the Council. The Council has agreed the remedy to address the injustice.

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Investigator's decision on behalf of the Ombudsman

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