Summary: There is no evidence of fault in the way the Council reached its decision about the inclusion of the loan in Mr and Mrs X’s financial assessment, and no evidence of delay or poor communication.

The complaint

1. Mr X complains that the Council included the amount of a loan in the financial assessment it undertook when Mrs X required a package of care. He also says that delayed communication from the Council prevented them from repaying the loan sooner and consequently they incurred additional payments.

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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 significant injustice, or that could cause injustice to others in the future we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
3. 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

4. I considered the information provided by Mr X and by the Council. Both Mr X and the Council had the opportunity to comment on this statement and I considered their comments before I reached a final decision.

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What I found

Relevant law and guidance

5. A council has a duty to arrange care and support for those with eligible needs, and a power to meet both eligible and non-eligible needs in places other than care homes. A council can choose to charge for non-residential care following a person’s needs assessment. Where it decides to charge, the council must follow the Care and Support (Charging and Assessment of Resources) Regulations 2014 and have regard to the Care Act statutory guidance. (Care Act 2014, section 14 and 17)
6. Where a council has decided to charge for care, it must carry out a financial assessment to decide what a person can afford to pay. It must then give the person a written record of the completed assessment. Councils have no power to assess couples according to their joint financial resources. A council must treat each person individually.
7. In assessing what a person can afford to contribute a local authority must apply the upper and lower capital limits. The upper capital limit is currently set at £23,250 and the lower capital limit at £14,250.
8. A person with assets above the upper capital limit will be deemed to be able to afford the full cost of their care. Those with capital between the lower and upper capital limit will be deemed as able to make a contribution, known as ‘tariff income’, from their capital.
9. Schedule 2 of the Care and Support (Charging and Assessment of Resources) Regulations 2014 sets out the capital that can be disregarded for the purpose of financial assessments. It also details the circumstances in which a loan can be disregarded. The Regulations do not provide specific guidance in terms of general loans, whether secured or unsecured, and if they should be excluded from the financial assessment.

What happened

10. Mrs X was discharged from hospital in September 2023 after a stroke. She required home care.
11. An officer from the Council carried out a financial assessment in October 2023. The Council says during the assessment it was confirmed that Mr and Mrs X’s daughter had loaned them £100,000 which was secured by a legal charge on their property. At the time of the assessment Mr X said £86,000 was held in a joint bank account belonging to him and Mrs X. Mr X says he made it clear this was an approximate amount and later clarified that it included moneys earmarked for interest payments to their daughter and so not available for use. He says the Council continued to use the figure of £86000 however.
12. The Council included 50% of the loan amount in Mrs X’s financial assessment. An officer wrote to Mr X on 24 October explaining that Mrs X would be liable for the full cost of her care as her capital was above £23,250, and requesting further details of the loan. Before Mr X had the chance to send the requested details, confirmation that the loan amount was being included in the assessment was sent on 31 October (although the loan was incorrectly described as a gift).
13. Mr X appealed against the decision at the beginning of November. The Council replied on 16 November apologising for the confusion and the use of the word ‘gift’ to describe the loan but confirming the decision. Mr X says he did not receive that letter. He wrote again on 4 December complaining about the letter of 31 October, the decision and the absence of a response to his letters of 1 and 6 November.
14. An officer replied to Mr X on 23 January. He explained the reason why the loan had been included in the assessment: he said, “In terms of the treatment of a loan in a financial assessment, Schedule 2 of the Regulations details the circumstances in which a loan can be disregarded. The Regulations do not state that general loans, whether secured or unsecured, should be excluded from the financial assessment. We have therefore included the value of the loan, and the remaining amount held in the joint bank account, as capital in the financial assessment. As the remaining £86,000.00 was held in a joint bank account the value was halved and the sum of £43,000.00 was included in the financial assessment as capital owned by your wife.” He apologised again for the inaccuracy in the letter of 31 October and the appearance of a failure to respond.
15. The letter concluded with advice that “If the financial circumstances change, i.e. (Mrs X) decides to repay the loan and her capital reduces,” they should contact the Council for a reassessment.
16. Mr X says he was surprised by the suggestion of a reassessment. He wrote to the Council again on 25 January. He contacted the Council again on 8 February and spoke to another officer on 16 February who agreed that there would be a reassessment of the charges if some of the loan was repaid. Mr X repaid half the loan and a reassessment confirmed that as Mrs X’s assets were now below the limit, there would be no charge for the cost of care.

The complaint

17. Mr X complained to the Ombudsman. He said he believed the loan should have been disregarded in the first place because part of the equity of the value of their home was accounted for by the loan, and the regulations say the financial assessment does not take account of the value of the home. He also said the delay and poor communication had cost them several months when they had paid charges, and earlier advice about a reassessment in case of a repayment would have prevented those charges.
18. The Council says “Schedule 2 of the Regulations states loans obtained for educational purposes should be disregarded. But it does not state that other types of loans fall into this category and should be disregarded. This suggests the legislative intention was that general loans would be included as capital for financial assessments under the 2014 Regulations. If the intention was to exclude general or other types of loans this would have been expressly provided for.”
19. The Council also sought advice from the committee of the National Association of Financial Assessment Officers to ensure its interpretation was correct. The Council has provided me with the responses, which unanimously agree with the Council’s interpretation.

Analysis

20. The financial assessment did not cause injustice to Mr and Mrs X. Mr X says the Council never produced an accurate assessment based on his detailed figures. The letter of 16 November (which unfortunately Mr X did not receive) explained that the detailed figures he had produced were taken into account. The Council was entitled to treat the loan as part of the capital to be assessed in line with the regulations. That decision was also in line with decisions previously issued by the Ombudsman.
21. Mr X did not receive the letter from the Council which was sent in November. There is no evidence that was the fault of the Council, although I can see that coloured his view that there was delay on the part of the Council.
22. In any event, it was not for the Council’s assessment officers to suggest to Mr X that he should repay the loan.

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Final decision

23. I have completed this investigation. There is no evidence of fault by the Council.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman