Summary: Mrs X complained the Council made an erroneous decision about deprivation of assets when she transferred hers, and her husband’s property, to her son. Mrs X says this has caused her husband to incur higher care costs. We found the Council had not considered the full factors in its deprivation of assets decision. We also found fault with the delays in the Council considering the full relevant factors and the distress and inconvenience this caused. The Council agreed to our recommendation to complete a review of its decision, apologise to Mrs X and apply a credit of £500 to her husband’s care charges to address this fault.

The complaint

1. Mrs X complained the Council has made an erroneous decision about deprivation of assets when she and Mr X transferred their property to her son. Mrs X says the Council has not properly considered the relevant questions about deprivation of assets.
2. Mrs X says her husband, Mr X, is now incurring higher care costs after the Council assessed him as a self-funder by considering the house as notional capital. Mrs X says had she not gifted the house, the Council would have disregarded the house since she still lived in the property.

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The Ombudsman’s role and powers

3. 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)
4. We consider whether there was fault in the way an organisation made its decision. If there was no fault in the decision making, we cannot question the outcome. (Local Government Act 1974, section 34(3), as amended)
5. If we are satisfied with an organisation’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

6. I have considered all the information Mrs X provided. I have also asked the Council questions and requested information, and in turn have considered the Council’s response.
7. Mrs X provided comments on my draft decision which I considered before making my final decision.

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What I found

Deprivation of assets

8. The charging rules for residential care are set out in the “Care and Support (Charging and Assessment of Resources) Regulations 2014” (the regulations), and the “Care and Support Statutory Guidance 2014” (CSSG). When the Council arranges a care home placement, it must follow these rules when completing a financial assessment to decide how much a person must pay towards the costs of their residential care.
9. The rules state that people who have over the upper capital limit, £23,250, should 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.
10. Regulation 22 says councils must treat people as still having capital they have deprived themselves of for the purpose of reducing the amount they need to contribute to the costs of their care. Capital treated this way is often called ‘notional capital’.
11. However, the CSSG says councils should not automatically assume deprivation. It says there may be valid reasons someone no longer has an asset and councils should ensure they fully explore this first.
12. Annex E of the CSSG says that when deciding if someone has deprived themselves of assets, councils should consider:
1. 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?
2. did the person have a reasonable expectation of needing to contribute to the cost of their eligible care needs?

Property disregard

13. The Care and Support (Charging and Assessment of Resources) Regulations 2014 (the regulations) say that a Council must disregard capital in certain circumstances.
14. Schedule 2, Section 4(1)(b) says a Council must disregard the value of a property which is occupied, as their main or only home, by a qualifying relative of the person receiving care who also occupied this property as their main or only home before they received accommodation or care in their home under the Care Act.

What happened

15. The Council contacted Mr X’s doctor in 2017 following a referral to enquire about Mr X’s health. Mr X’s doctor said it had no formal diagnosis but Mr X showed early signs of dementia.
16. The Alzheimer’s association contacted the Council in February 2019 to ask for a referral for home care for Mr X following his diagnosis of Alzheimer’s in 2018.
17. The Council contacted Mrs X and agreed to complete a care assessment. Mrs X at first declined the offer of care before agreeing to have this from 16 June 2019.
18. On 7 August 2019, Mr and Mrs X met with their accountants to discuss the transfer of property to Mrs X’s son, Mr X’s stepson. Mr and Mrs X told their accountants they wished to transfer the property to Mrs X’s son to avoid a dispute over Mr X’s will.
19. The Council completed its financial assessment of Mr X on 14 August 2019 and decided he needed to contribute £40.15 a week towards the cost of his care. This was a partial contribution of cost.
20. On 19 December 2019, Mr and Mrs X transferred most of the land of the farm to Mrs X’s son. Mr and Mrs X kept ownership of their home and adjoining gardens.
21. In February 2020, Mr X spent a week in respite care. When the Council completed a financial assessment of Mr X in June 2020 it did not discover Mr X had transferred land to his stepson. The Council decided Mr X should partially contribute to the cost of respite care at £146.49 a week.
22. Mr X moved into respite care on 30 July 2020 and did not return to his house. In September 2020, the Council contacted Mrs X to advise it needed to complete a further financial assessment given Mr X’s longer stay in respite care. The Council arranged to complete a telephone financial assessment with Mr X’s stepson on 29 September 2020. Mr X’s stepson confirmed Mr X had transferred land to him in December 2019.
23. Mr X moved into permanent residential care on 7 October 2020.
24. On 20 October 2020, the Council completed its financial assessment of Mr X. The Council noted that Mr X had transferred land worth upwards of £800,000 to his stepson in December 2019. The Council said as part of a financial assessment it must identify if a person has deprived themselves of assets to reduce the amount they would need to contribute towards cost of care. The Council considered Mr X deprived himself of assets because at the time the transfer of land took place there was:
• “a reasonable expectation of the need for care and support”.
• “a reasonable expectation of needing to contribute towards the cost your eligible care needs”.
25. The Council said it would treat Mr X as a self-funder because of this deprivation of assets.
26. In November 2020, Mr X’s stepson contacted the Council to dispute the Council’s decision. The Council explained to Mr X’s stepson how to appeal the decision. Mr X’s solicitors also contacted the Council in December 2020 and the Council explained to them how to appeal the decision.
27. The Council continued to fund Mr X’s care while it awaited the appeal.
28. On 25 October 2021, Mr X’s solicitors lodged an appeal against the Council’s deprivation of assets decision. The solicitors said the Council failed to consider Mr X’s motivation in disposing of the asset. The solicitors explained Mr X’s motivation was to avoid a post-death inheritance dispute and provided the context for this motivation. The solicitors also argued that Mrs X continued to live at the property so the Council had to disregard the property.
29. On 23 February 2022, the Council responded to Mr X’s solicitors. The Council said:
• Mr X was aware of his health conditions since at least 2017 when the Council was notified of Mr X’s declining health.
• It provided care to Mr X since 2019 and at that time had assessed Mr X to contribute towards the cost of this care.
• It only assessed Mr X to pay a contribution towards this cost of care and did not charge the full cost of care before October 2020.
• It only checks the land registry when a person enters residential care and this is when it discovered the transfer of land to Mr X’s stepson in December 2019.
• The Council has assessed Mr X as needing to contribute the full cost of his care since December 2019 because of the transfer of land to his stepson.
• It had considered the reasons put forwards in the letter of 25 October 2021 for the transfer of land but maintained the value of the land should continue to be included in the financial assessment.

Analysis

Deprivation of assets

30. When considering deprivation of assets, Annex E of the CSSG says a council should consider three main points. The Council should consider whether a person had reasonable expectation of needing care, reasonable expectation of needing to contribute to the cost of their care and their motivation of disposing of the asset. All three of these questions are relevant considerations at the time a disposal of assets took place.
31. The Council has shown consideration of Mr X having reasonable expectation of needing care. The Council’s system has notes about Mr X’s declining health since 2017, his diagnosis of Alzheimer’s and the provision of home care by the Council before December 2019. The Council’s letter of 20 October 2020 in which it made its decision on deprivation of assets confirmed its thoughts that Mr X has “a reasonable expectation of the need for care and support”.
32. The Council has also shown consideration of a reasonable expectation of needing to contribute towards the cost of care. The Council made Mr and Mrs X aware of Mr X’s need to contribute towards the cost of his home care since 14 August 2019. The letter of 20 October 2020 also states Mr X had “a reasonable expectation of needing to contribute towards the cost” of his care.
33. The Council has also time-bound these considerations in the letter of 20 October 2020 “at the time the transfer of land took place”.
34. While the Council has considered these two factors it has not detailed any consideration over motivation in the letter of 20 October 2020 or any of its system notes before this date. The Council decided Mr X deprived himself of assets based on the expectation of needing care and expectation of needing to contribute alone.
35. We would expect to see a Council making enquiries of the person about their motivation and version of events before making a decision about deprivation of assets. The Council has not made such enquiries or obtained supporting evidence from Mr X, or his relatives, to consider Mr X’s motivation before reaching its decision in October 2020. The Council has failed to follow the guidance outlined in the CSSG in October 2020 meaning its decision about deprivation of assets was at fault.
36. While the Council did not consider motivation in October 2020, it has considered this in 2022. Within the appeal of the Council’s deprivation of assets decision, Mr X’s solicitors provided an explanation for Mr X’s motivation in disposing of the assets. Mr X’s solicitors also provided the context surrounding this about avoidance of an inheritance dispute. Mr X’s solicitors also provided supporting documentation to the Council.
37. The Council considered Mr X’s motivation in response to the contact from the solicitors. In the letter of 23 February 2022, the Council detailed the motivation outlined by Mr X’s solicitors but did not agree with it. The Council reaffirmed its decision that a deprivation of assets took place after considering Mr X’s motivation. This means the Council has, in theory, corrected the fault from the October 2020 by considering the outstanding “motivation” factor.

Property disregard

38. While the Council has now considered the relevant questions about deprivation of assets, Mrs X expressed concerns about the Council’s failure to consider the rules surrounding property disregards.
39. The Care and Support Regulations 2014 says a Council must disregard the value of a property which a qualifying relative of the person receiving care continues to occupy as their main or only home.
40. Before December 2019, Mr and Mrs X both lived in the property as their main residence. The Land Registry showed this property as the building itself, the associated gardens and the agricultural land. Had Mr X moved into a care home before 19 December 2019, and Mrs X continued to live in this property, the property would have been subject to the property disregard under Section 34(c) of the CSSG.
41. However, on transferring the agricultural land, without the main residence, to a non-qualifying relative before Mr X entered a care home, Mr and Mrs X have created an asset which does not benefit from the main residence property disregard. The Council was therefore entitled to consider the transfer of the agricultural land as notional capital within its financial assessment. I do not find fault with the Council for this decision.
42. While the Council’s decisions about deprivation of assets and property disregards are fine in isolation, the Council has not detailed any consideration of these two aspects combined. Given the agricultural land for Mr X’s property would have been subject to the property disregard if he had not transferred it to his stepson, transferring this land would arguably not have been motivation to avoid care charges unless Mrs X intended not to remain living in the property. The Council has not detailed any consideration of this. This is fault.

Conclusions

43. There was at first fault by the Council in failing to consider all the relevant questions outlined in the CSSG in October 2020. However, when the Council did consider the relevant questions in February 2022 it reached the same decision.
44. However, even when the Council has considered the relevant questions, it has not considered the full factors. Namely, about why Mr X would transfer part of his property which would have been exempt under the property disregard rules.
45. The Council’s failure to consider motivation from October 2020 to February 2022 and failure to consider the full factors surrounding motivation to date is fault causing nearly two years of distress and inconvenience.

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Agreed action

46. Within one month of the Ombudsman’s final decision the Council should:
• Provide an apology and to Mrs X and a apply a credit of £500 to Mr X’s care charges. This is to reflect the nearly two years of delays causing distress and inconvenience through the failure of the Council to consider the full relevant factors surrounding Mr X’s motivation in disposing of the asset.
• Complete a review of its deprivation of assets decision detailing its full consideration. The Council should consider whether Mr X had reasonable expectation of needing care and of needing to contribute to the cost of his care and his motivation of disposing of the asset in December 2019. The Council should ensure it details it consideration about motivation in reference to the context provided by Mrs X surrounding the decision to transfer the land to her son. And, the fact the asset transferred would have been exempt under the property disregard rules had Mr X not transferred this to his stepson.
47. Within three months of the Ombudsman’s final decision the Council should:
• Provide training to its staff about the importance of considering motivation, and the full factors and evidence surrounding motivation, when making a decision about deprivation of assets and detailing their thinking about this consideration.

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Final decision

48. There was fault leading to injustice. As the Council accepted my recommendations I have completed my investigation as I consider that a suitable remedy.

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Investigator's decision on behalf of the Ombudsman