Summary: There was fault in the way the Council carried out a financial assessment of Mr L and Mr N and calculated the personal budget. The Council has agreed to apologise, to carry out a further financial assessment of Mr L and Mr N and it has already waived some of the debt.

The complaint

1. Mrs K complains on behalf of her adult sons, Mr L and Mr N. She says the Council’s communication about the financial assessment was poor and the Council delayed providing her with information. She says the Council has not properly considered all the costs that were incurred.

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

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What I found

Law, guidance and policies

5. 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.

Care plan and personal budget

6. The Council has a duty to assess adults who have a need for care and support. If the needs assessment identifies eligible needs, the Council will provide a support plan which outlines what services are required to meet the needs and a personal budget which sets out the costs to meet the needs.

Direct payments

7. A person can choose to receive direct payments to arrange the care and support themselves, rather than receive the support directly from the council.
8. The amount of direct payment is derived from the personal budget set out in the care and support plan.

Paying family members

9. The Care and Support (Direct Payments) Regulations 2014 regulations say direct payments cannot be used to pay for care and support provided by a close family member living in the same household, except where the local authority determines this to be necessary.
10. Family members can be paid for the administration/management of the direct payments.

Financial assessment

11. Where a local authority has decided to charge, except in certain circumstances, it must carry out a financial assessment of what the person can afford to pay and, once complete, it must give a written record of that assessment to the person. 
12. A local authority must regularly reassess a person’s ability to meet the cost of any charges to take account of any changes to their resources. This is likely to be on an annual basis, but may vary according to individual circumstances. However, this should take place if there is a change in circumstance or at the request of the person.
13. Local authorities should ensure there is sufficient information and advice available so that a person can understand the assessment and the contributions.
14. The charging rules are different depending on whether the person receives care and support at home or in a residential setting and whether their capital is above or below the funding threshold of £23,250.
15. I have set out the rules relevant to people who receive care at home and whose capital is below the threshold of £23,250.

Minimum income guarantee

16. Councils have discretion to choose whether to charge for non-residential care under the Care Act. Local authorities should have a charging policy on how they wish to apply the discretion.
17. When a council assesses a person’s income, they must ensure that the person is left with the minimum income guarantee (MIG) after charges have been deducted.
18. The government publishes a circular each year which sets out what the MIG will be for that year. When the government first calculated the MIG in 2015, it used the basic levels of income support or the guaranteed credit element of pension credit plus a buffer of 25%. The government has not changed the MIG since 2015.
19. The Guidance says the government considers that it is inconsistent with promoting independent living to assume, without further consideration, that all of a person’s income above the minimum income guarantee (MIG) is available to be taken in charges. Therefore, councils should consider setting a maximum percentage of disposable income (above the MIG) or a maximum charge.

What is included in the MIG?

20. The purpose of the MIG is to ensure that a person has sufficient funds to meet their basic needs such as purchasing food, utility costs or insurance. This must be after any housing costs net of any benefits provided to support these costs – and after any disability related expenditure. Housing costs include mortgage repayments, rent or ground rent, council tax and service charges.
21. Local authorities may take most of the benefits people receive into account as income, but some benefits, such as the mobility element of the Disability Living Allowance (DLA) or Personal Independence Payment (PIP) must be disregard as income (among others).

Disability related expenditure (DRE)

22. The Guidance says that where disability-related benefits are taken into account, the local authority should allow the person to keep enough benefit to pay for necessary disability-related expenditure to meet any needs which are not being met by the local authority.
23. There is no exhaustive list of DRE, but the Guidance has a list of items which the Council should include when assessing DRE.

Council’s charging policy and the DRE Allowance Tool

24. The Council’s own policy says the following.

DRE – automatic disregard

25. The Council used to offer an automatic disregard of 25% of disability-related benefit income in the financial assessment. It changed its charging policy on 1 April 2017 and withdrew this automatic disregard.

Housing costs

26. The Council changed its charging policy in January 2021. It said that where an adult who received services from the Council lived with a family member, they did not normally have legal responsibility towards the payment of rent or council tax on the property they lived in.
27. However, the Council accepted that they may be expected to contribute towards those costs and it would make an allowance for rent and council tax contributions based on the housing benefit and council tax support guidelines set by central government.

Heating costs

28. The Council will consider as DRE ‘any heating costs above the average levels for the area and housing type, occasioned by age, medical condition or disability’. The Council has a list of housing types and the average heating costs.

Transport costs

29. The Council will consider as DRE any ‘transport costs necessitated by illness or disability, including costs of transport to day centres, over and above the mobility component of DLA or PIP, if in payment and available for these costs.’

What happened

30. Mr L and Mr N both have autism, severe learning disabilities and other disabilities which affect their ability to live independently. They live at home and receive care and support from their parents and from care workers who attend the home.
31. Mrs K’s complaint relates to the contribution the Council has asked Mr L and Mr N to pay towards the cost of the package of care and she has appealed the charges/submitted complaints from October 2017 onwards. The correspondence continued until June 2020. I have summarised the events and the correspondence insofar as they are relevant to the complaint I am investigating.

Assessment – September 2017

32. Before September 2017, Mr L and Mr N did not pay any contribution towards the costs of their care.
33. The Council assessed Mr L and Mr N’s finances in September 2017 and said they would have to pay contribution towards their care costs (around £22). The Council allowed a DRE for washing and laundry costs and private domestic help/cleaning (total of £26.15).

Appeal – October 2017

34. Mrs K appealed the financial assessment in October 2017. She said:
• The Council only took into account laundry and the cost of a cleaner as a DRE. It did not consider all the other additional costs of caring for Mr L and Mr N.
• Mrs K provided 80% of the care to Mr L and Mr N and this had not been taken into account, nor the fact that this meant she did not have an income.
• The MIG was too low and, If Mr L and Mr N were living in a residential home, this would cost the Council a lot more.
• Her sons were vulnerable adults whose only income was disability benefits.
• Mr L was unable to control his temperature so they bought him an air conditioning unit. The extra cost of this had not been taken into account.
• She included a gas and electricity bill dated 16 September 2017 which showed that the charges for 11 months were £1,998.
• Both her sons had obsessive interests as part of their autism. Mr N watched children’s programmes on video and found the transition to DVDs very difficult. He spent a lot of money replacing videos when they had been worn out. It was difficult to explain to him if he could not afford this and the reduction in their income would make things even more challenging.

Council’s response – December 2017

35. The Council responded in December 2017. It said:
• It explained the change in its charging policy in terms of DRE (the removal of the 25% discretionary allowance). This was the reason why Mr L and Mr N were now charged a contribution from their income.
• The MIG was set by central government so Mrs K should take that up with her local MP.
• It would not include the electricity as DRE as the family’s electricity bill was not higher than average and it disallowed the cost of the DVDs as DRE as DVDs were not usual DRE.

Council’s assessment visit – February 2018

36. The Council’s social worker and financial officer then carried out a joint visit to Mrs K on 21 February 2018 to review the financial assessment. They allowed further DRE for specialist equipment which led to an increase in the DRE and a decrease in the contribution.
37. The Council wrote to Mrs K in April 2018. The Council had set Mr L’s MIG too high and had adjusted the figure. As this was an administrative error, it was corrected from the date of the new assessment only. The Council explained to Mrs K that, if she wanted to claim any additional DRE, she would need to provide evidence of the expenditure.
38. In 2018, the disability living allowance (DLA) was replaced with personal independence payment (PIP). This led to an increase in the contribution because the Council no longer disregarded the night care element of the DLA as income.

Council’s letter – July 2018

39. The manager wrote to Mrs K in July 2018. Mrs K had questioned why the contribution had increased when her sons’ needs had not changed. He said this was a question a lot of people had asked and the underlying reason was financial. The Council had less money available than before so it had to make considerable savings which is why it changed its charging policy in 2017.
40. The manager also said the Council was considering compensating family members who managed a large amount of direct payments. He hoped to be able to make an offer to Mrs K within the next two months, which would most likely be based on a percentage of the direct payment amount.

Complaint – May 2019

41. The Council wrote to Mrs K in May 2019 chasing the payment of £3,000 of unpaid contributions. Mrs K complained to the Council and said:
• Mr and Mrs K provided accommodation which met their sons’ specialist needs. They had paid for all the alterations to their home to meet that need.
• The DRE was too low. She said: ‘Nowhere can we include support worker costs, additional energy bills, extra clothing and bedding needs, maintenance costs or even ask for an allowance to be made because I, as the main care giver cannot work. I manage the Direct Payment Support Worker workforce of currently nine members of staff, with all the shift allocation, administration, payroll, employment contracts and law involved but do not get any allowance for this.’

Complaint – February 2020

42. Mrs K complained to the Council in February 2020 and said:
• She did not have any financial assessment documents for Mr L since 2018 and Mr N since 2017.
• She had been told she could not charge her sons for living expenses or claim housing benefit or claim any costs for managing their direct payments.
• She wanted the Council to explain what legislation set out what to include in ‘home and expenditure costs’ section of the financial assessments and what costs were included in the MIG.
43. The Council replied and said:
• When a person lived at home, the Council did not include any household expenditure as an allowance as the MIG should be sufficient to cover these costs.
• In terms of housing costs, if Mrs K’s sons lived in their own home, then the Council would make allowances for rent or council tax, but this was not the case here.
• It referred Mrs K to the relevant sections of the Guidance which set out the MIG.
44. Mrs K replied on 30 May 2020 and said:
• Mr L and Mr N had unusually high transport costs as neither could use public transport or share transport so she had to pay support workers 45p per mile for transport.
• She spent £3,702 in fuel cost last year which was higher than average. She could provide copies of invoices if required.
• She had to replace the shower and cubicle in Mr L’s bathroom and bought a new air-conditioning unit last week.
45. On 15 Jun 2020, the Council said it had already responded to her complaint, but Mrs K could take her complaint to the Ombudsman.

The Council’s response to the Ombudsman

46. The Council provided responses to the Ombudsman’s questions:
47. How had the Council assessed the affordability of the contribution? The Council said:
• ‘The MIG is set by central government as the amount of money that people need to live on’.
• Mrs K had not provided evidence that the weekly MIG was not sufficient to meet the needs. If Mrs K provided statements to confirm how Mr L and Mr N’s income was spent, then the Council would give further consideration whether the contribution was affordable.
48. Had the Council considered the costs relating to the air-conditioning units as a DRE? The Council said:
• It had never been provided with evidence of the cost of buying the air-conditioning unit or a request that it should be considered as a DRE. If Mrs K provided the evidence, the Council could consider this request.
49. Mrs K said her fuel bill was £3,702 last year. The Council said:
• Mrs K had provided her gas and electricity bill from November 2018 to February 2019 but this was the most expensive time of the year and not did not provide evidence of the cost for the entire year. Mrs K would need to provide evidence of the cost of an entire year if she wanted these costs to be considered.
50. How did the Council consider housing costs in its financial assessment? The Council said:
• The Council had changed its charging policy on housing costs in January 2021. It agreed to include an allowance of £15.95 for ‘rent’ and £4.05 for council tax for Mr L and Mr N. It also agreed to backdate these allowances to 2017. This led to a reduction in Mr L and Mr N’s joint debt from £15,617 to £7,219.
51. How did the Council consider the fact that Mrs K manages Mr L and Mr N’s direct payments and payroll, employment and training of the support workers? The Council said:
• This had been discussed with the social worker. There was no evidence in the records that Mrs K had requested that this should be considered as part of the direct payments. The Council was in the process of reviewing the care needs assessment and care plan and consideration would be given to this request.
52. There had been a recent decision where the court found that a local authority had not considered the differential impact of its charging policy on the most severely disabled people. I asked the Council whether the Council had considered the implication of that case on its own charging policy.
53. The Council said it was in the process of reviewing its policy.

Analysis

Air conditioning units

54. The correspondence shows that Mrs K raised the air conditioning unit as a possible DRE in her first appeal in October 2017. Mrs K raised it again in her complaint in October 2020 as she had to buy a new air-conditioning unit. The Council failed to consider whether this cost was a DRE and this failure was fault.

Fuel costs / transport costs / extra clothing and bedding

55. I have put these costs together as they are all costs that the Council could consider as DRE.
56. Mrs K raised the issue of her utility bills in 2017, in May 2019 and in May 2020. She raised the costs for extra clothing and bedding in May 2019 and the transport costs in 2020.
57. I appreciate that the Council could not approve these costs without evidence, but the Council should have said this to Mrs K when she raised them as a possible cost or it should have offered her a financial re-assessment earlier.

Managing the workforce and the direct payments.

58. There was fault as the Council failed to properly consider paying Mrs K for the hours she spent on managing her sons’ workforce and managing the direct payments. I do not accept the Council’s claim that this had not been raised in the past.
59. The Council promised Mrs K in July 2018 that it would provide her with a proposal to compensate her for these costs but then did not address this any further. Later correspondence from Mrs K showed that she raised this issue again in May 2019 and February 2020 but had been told that she could not claim for these costs.
60. There is therefore evidence that this matter had been raised with the Council several times and the Council should have considered it and its failure to do so was fault.

Housing costs

61. The Council said it could not consider any housing costs as Mr L and Mr N were not directly liable for the costs (repayment of mortgage and council tax).
62. In its response to the Ombudsman the Council said it had changed its position on the housing costs and had agreed to allow £20 a week for housing costs.
63. I agree that the Council should have properly considered Mr L and Mr N’s housing costs and has not shown evidence that it did so. However, the Council has used its discretion to allow a substantive reduction in Mr L and Mr N’s debt and to backdate the reduction to 2017. As this remedy is more than the Ombudsman could have recommended, I will not recommend any further remedy.

The real cost of care

64. Mrs K says the Council has not properly considered the real cost to her and husband of caring for their sons. She says she and her husband provide most of the care but are not paid for this. She says there is also the hidden cost in that she was unable to earn meaningful money and her husband’s earning capacity was limited.
65. She said that, if her sons were living in residential accommodation, the cost to the Council would be much higher and this was not reflected in the financial assessment.
66. I have a lot of sympathy for Mrs K and her family. She is saving the Council a lot of money, but, unfortunately, the cost of alternative accommodation is not a factor that the Council has to consider in its financial assessment so there is no fault in the Council’s approach. Similarly, the Council is not obliged to make an allowance for the lost earnings in its assessment.
67. I am concerned by the Council's repeated assertion that the MIG should cover the costs and it could not further consider this. That is not correct. The fundamental principle of any financial assessment was affordability and, if Mrs K was saying that her sons could not afford the contribution, then the Council should have considered this in its overall financial assessment. However, I note that the Council has offered to do this in its response to the Ombudsman.
68. In addition, the Council has the power, when it set its charging policy to consider setting the threshold higher than the MIG. However, I note the Council is carrying out a review of its charging policy in light of the recent court case.

Delay / communication

69. Mrs K said the Council changed its calculation of the contribution in 2017. She said it took 3 years for the Council to respond with the appropriate sections of the Care Act to explain why this was. Because of this delay, Mr L and Mr N now faced a substantial debt.
70. I have looked at the correspondence and in my view the Council explained why it started to charge a contribution in 2017. The Council explained that it changed its charging policy in 2017 which meant it no longer allowed a standard DRE of 25% of the person’s income. The Council changed its policy because its own income had decreased.
71. This change in the calculation of the DRE meant that the Council had to look much more closely at the DRE and the other costs that Mr L and Mr N incurred to calculate the contribution. The long delay was caused by the disagreement between Mrs K and the Council about what should and should not be included as DRE, housing costs and the cost of living.
72. There was fault in the Council’s approach and communication as Mrs K kept raising different issues about the DRE and the affordability of the contribution as part of her complaint (as shown above) which the Council did not fully address or consider. Nor did the Council explain to Mrs K what evidence she had to provide. The Council had a duty to provide clear information about the financial assessment and it did not always do this. The Council was focussed on responding to the complaint but should have picked up that some of the complaints raised genuine DRE/affordability issues which required a review of the financial assessment.
73. These issues could have been addressed earlier if the Council had offered Mr L and Mr N a full re-assessment of their finances which took into consideration the different issues Mrs K had raised.

Injustice and remedy

74. The main aim of the Ombudsman’s remedy is to put the complainant in the position they would have been if the fault had not occurred.
75. One of Mrs K’s complaints was the Council’s failure to consider Mr L and Mr N’s housing costs and this has been addressed.
76. I have found fault in the way the Council has carried out the financial assessments as the Council has not properly considered the DRE and costs that Mr L and Mr N incur.
77. The Council has agreed to carry out out a fresh financial assessment of Mr L and Mr N to remedy the fault
78. In terms of the work Mrs K carries out in managing her sons’ workforce and managing the direct payments, I appreciate that this issue may require a review of the care plan and personal budget rather than a review of the financial assessment as Mrs K is, in essence, asking to be paid for the work she has been doing in that respect. I note the Council has said it has started this review of the care plan and personal budget and has not completed it yet. The Council has agreed to complete this review within a month.
79. The review of the care plan and personal budget may affect the financial assessment and therefore I have set a later deadline of two months for the financial assessment.

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Agreed action

80. The Council has agreed to take the following actions.
81. The Council will, within one month:
• Apologise in writing for the fault.
• Complete its review of the care plan and personal budget of Mr L and Mr N and consider whether Mrs K should be paid for her work in managing the support workers and the personal budget.
82. The Council will, within two months:
• Carry out a review of the financial assessment of Mr L and Mr N.
• If the reviews result in a reduction of the debt by Mr L and Mr N, this will be backdated to the time Mrs K first raised the matter

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Final decision

83. 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