Decision : Not upheld
Decision date : 11 Jun 2021
The Ombudsman's final decision:
Summary: There is no evidence of fault in the way the Council reached its decision that Mrs X had deliberately deprived herself of assets in order to avoid care charges.
- Representatives of Mrs X (as I shall call the complainant) say the Council failed to consider all relevant information when it reached its decision that she had gifted away her half share of the marital home and deprived herself of assets in order to avoid care charges. Her solicitor says the late Mr X’s death could not have been foreseen and he had always intended to care for Mrs X at home.
The Ombudsman’s role and powers
- We investigate complaints of injustice caused by ‘maladministration’ and ‘service failure’. I have used the word ‘fault’ to refer to these. We cannot question whether a council’s decision is right or wrong simply because the complainant disagrees with it. We must consider whether there was fault in the way the decision was reached. (Local Government Act 1974, section 34(3), 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 considered all the information provided by Mrs X’s solicitor. I spoke to Mrs X’s solicitor and to a council officer involved in the decision. Both Mrs X’s solicitor and the Council had the opportunity to comment on an earlier draft of this statement, and I considered their comments before I reached a final decision.
What I found
Relevant law and guidance
- The charging rules for residential care are set out in the “Care and Support (Charging and Assessment of Resources) Regulations 2014”, and the “Care and Support Statutory Guidance 2014”. When the Council arranges a care home placement, it has to follow these rules when undertaking a financial assessment to decide how much a person has to pay towards the costs of their residential care.
The rules state that people who have over the upper capital limit (currently set at £23,250) are expected to pay for the full cost of their residential care home fees. However, once their capital has reduced to less than the upper capital limit, they only have to pay an assessed contribution towards their fees.
- The guidance also says that the value of someone’s property, once they are living in residential care, must be disregarded where it is occupied in part or whole by their spouse (among other categories which do not apply here).
- The Care and Support Statutory Guidance says (Annex E) “When undertaking or reviewing 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.”
- Deprivation of assets means where a person has intentionally deprived or decreased their overall assets in order 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 in order to reduce the contribution they are asked to make towards the cost of that care and support.
- The guidance goes on to say that examples of deprivation might include a lump-sum payment to someone else, for example as a gift; the title deeds of a property have been transferred to someone else; or assets have been put into a trust that cannot be revoked.
- The guidance says, “There may be many reasons for a person depriving themselves of an asset. A local authority should therefore consider the following before deciding whether deprivation for the purpose of avoiding care and support charges 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?
For example, it would be unreasonable to decide that a person had disposed of an asset in order to reduce the level of charges for their care and support needs if at the time the disposal took place they were fit and healthy and could not have foreseen the need for care and support.”
- Mrs X suffered a brain aneurysm in 2011. She was discharged home from hospital with a package of care, so that her husband could look after her in their own home. In 2013 Mr X arranged for adaptation works to be completed to make the property more suitable for her needs. Mr and Mrs X owned the property jointly.
- In December 2014 Mrs X gifted her half share of the property to Mr X. Her solicitor says this was done in recognition of the care he had given her, and to compensate for the costs of the adaptation of the property. Mr X created a Trust and transferred his assets into it, with the intention of keeping inheritance tax liability to a minimum (his former solicitors say).
- In 2015 Mr X was diagnosed with cancer. Mrs X moved into a residential care home: she eventually returned to live at home with an increased care package from October 2016. She had a further long period of residential care in 2017, and then moved into permanent residential care in 2018.
- In 2019 Mr X sold the house for £260,000. He transferred £130,000 into the Trust. He bought a smaller house for £130,000.
- In its financial assessment of Mrs X for her permanent residential care, the Council assessed Mrs X as having assets over the upper threshold of £23,250 and therefore able to pay her own care fees. An officer wrote to Mr X in September 2019 after the sale of the house, and said that although its value had been disregarded during the period of residential care between June and October 2016 (as Mr X was living there), it was clear that Mrs X had required care and support since 2011. It said it would take her assets into account from the time of her move into permanent residential care in July 2019.
- Mrs X’s (then) solicitors wrote to the Council to appeal. They said although there was a clear deprivation of capital as Mrs X gifted her share of the property to Mr X, they did not agree there was deliberate deprivation for the purpose of avoiding care charges. They said Mr X had expected to continue to care for Mrs X at home and the sole reason he was unable to do so was his own diagnosis of cancer which could not have been foreseen. They said the implications of transferring the assets into a Trust were not explained to Mr and Mrs X. They said if Mrs X was to be treated as not having gifted a half share of the former home to Mr X, then she would own the greater share of the new home and in that case (as she had a spouse living in the property) the value of her share would be disregarded anyway.
- The Council said its view remained that the purpose of the deed of gift in 2014 was to avoid care costs and it would continue to assess Mrs X as retaining the capital she had transferred. It asked the solicitors to clarify why the deed of gift had been made so that it could consider the appeal further.
- Mrs X’s current solicitors took over her representation. They wrote to the Council in February 2020. They said at the time of the gift Mrs X could not have known she would need permanent residential care. They said at the time of the gift, the property had been an exempt asset and so could not be taken into consideration. They said Mr X would not have spent £35,000 adapting the home to meet Mrs X’s needs if they had considered she would require permanent residential care.
- The Council responded. It said it remained of the view that at the time of the gift Mrs X had a reasonable expectation of the need for care and support, and a reasonable expectation of a contribution towards the cost of her care as she was already making such a contribution.
- Mrs X’s solicitors made a formal complaint to the Council in June 2020. They complained the Council had failed to act in accordance with the statutory guidance. They said the Council had made an assumption of deprivation without any evidence. They said the Council had dismissed out of hand the explanations about the reasons for the deed of gift. They said the Council had failed to show deprivation was deliberate, and misinterpreted the rules on notional capital.
- The Council did not uphold any of the complaints. It reiterated its view that no reasonable explanation for the deed of gift had been given. It said Mrs X had been in receipt of care services since 2011 and had been aware therefore of the financial assessment process. It said the case law quoted in the guidance (and which the solicitor relied on) was not analogous to the case of Mrs X. It said the former home was disregarded, in accordance with the guidance, only while Mr X was resident there and was not an example of an exempt asset. The Council said it had considered all the information given to it, and sought additional clarification, before it reached its decision.
- Sadly Mr X died in August 2020.
- Mrs X’s solicitors complained to the Ombudsman. They said the Council had failed to adhere to the guidance and had not reached a fair decision. They said Mr and Mrs X had every intention of remaining in the former home with Mr X providing care for Mrs X. They said Mr X’s diagnosis and subsequent death could not have been foreseen as a reason why Mrs X would require long term residential care.
- In response to my draft decision the solicitors say Mrs X herself was not aware of the financial assessment process as Mr X dealt with the family finances. I note however that Mr and Mrs X had a joint bank account from which her contributions towards the cost of care were made.
- Mrs X has required care services since 2011. She has been through the financial assessment process for residential care as a consequence of her rolling respite requirements. I do not find fault in the Council’s view she was aware therefore of the process and the need to ensure the Council was notified of changes in circumstances.
- I am satisfied the Council considered all the information available to it and sought more clarification concerning the reasons for the deed of gift. The solicitor explains there was detailed consideration of the reasons for the deed of gift, which was preceded by a severance of the joint tenancy. The previous solicitor acting for Mr and Mrs X said the implications of creating the Trust had not been explained to Mr and Mrs X. I do not have available to me the advice given to Mr and Mrs X at the time.
- The Council was entitled to reach a decision about deprivation of assets. It is not the role of the Ombudsman to question the merits of a decision which the Council reached properly.
- I have completed this investigation on the basis that there is no evidence of fault in the way the Council reached its decision.
Investigator's decision on behalf of the Ombudsman