The Ombudsman's final decision:
Summary: Mr C complains the Council wrongly decided she had deprived herself of capital and was therefore liable for her care home fees. The Ombudsman finds no fault with the Council’s decision-making in this case.
- The complainant, whom I shall call Mr C, complains on behalf of his mother Mrs D that the Council has wrongly decided she has deprived herself of capital and is therefore liable for her care home fees.
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 submitted by Mr C about his complaint. I made written enquiries of the Council and took account of the information it provided in response. I provided Mr C and the Council with a draft of this decision and gave them the opportunity to comment on it.
What I found
- Mrs D has been in residential care since June 2016. Mr C now has Power of Attorney for his mother’s property and financial affairs.
- A family trust was set up in December 2010. At this time, it held only £10, but could be added to later.
The family requests help from the Council
- On 26 February 2016 Mrs D’s family approached the Council to enquire about help from social services as Mrs D’s eyesight was failing. The records show that on 1 March 2016 a social worker discussed the process of assessment for services with Mrs D’s daughter in law and advised about paying for services. Mrs D then went into hospital, and from there into temporary residential care which then became permanent.
Charging for residential care
- 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 must follow these rules when undertaking a financial assessment to decide how much a person must pay towards the costs of their residential care.
- The rules state that people who have over the upper capital limit 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.
Deprivation of assets
- The guidance notes that it is important that people pay their fair contribution towards their care and support costs. There are some cases where a person may have tried to deliberately avoid paying for care and support costs through depriving themselves of assets – either capital or income. Where a local authority believes they have evidence to support this, they may charge the person as if they still possessed the asset.
- 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 to reduce the contribution they are asked to make towards the cost of that care and support.
- If a local authority decides that a person has deliberately deprived themselves of assets in order to avoid or reduce a charge for care and support, they will first need to decide whether to treat that person as still having the asset for the purposes of the financial assessment and charge them accordingly.
Mrs D’s financial circumstances
- Arrangements were made for a financial assessment to be made in respect of Mrs D, and on 2 June the Council asked Mr C for relevant financial details. On 8 July 2016, the Council asked for details of the Trust Deed. Mr B provided this to the Council on 31 May 2017.
- There are two available documents relevant to the trust. The first is that dated 2010, when the Trust was formed with a holding of £10. The second is a ‘Trust of Land’ and this is dated 31 May 2016. This refers to the home address of Mrs D prior to her move to residential care. It includes reference to a transfer of the property having taken place on 12 April 2012. However, there is no documentation to show such a transfer at that time and there was no updating of the Land Registry document for the property until January 2017, where reference is made to the 2016 Declaration of Trust and the associated transfer of the value of £150,000 at that time to the Trust.
- In the 2016 document, Mrs D was named as the settlor and the only beneficiary. The Trust deed document said for the Trust to be valid there must always be “at least two [trustees] in number or a trust corporation”, and “the overriding powers shall be exercisable only at a time when there are at least two trustees”. The Council took the view that the Trust had no legal basis as Mrs D was the settlor, the only trustee and a beneficiary and therefore even if the property was in trust Mrs D would ultimately benefit from its proceeds.
- The Council took the view that this amounted to deprivation under S70 of the Care Act 2014, being a transfer of assets to avoid care charges. It said this position was supported by the chronology of events relating to Mrs D’s knowledge of her pending requirement for care and support. The Council had been asked to assess Mrs D’s care needs on 1 February 2016; the Trust document was dated May 2016; and she moved into a permanent residential care placement on 20 June 2016.
- The Council advised Mr C that after the expiry of the 12-week property disregard from 11 September 2016 Mrs D did not qualify for financial assistance with her care home fees as taking the value of her property into account meant she held capital of more than £23,250.00. The Council offered a deferred payment agreement which would mean that costs of care could be met by the Council then recouped from her estate (including the proceeds for the property) after her death.
- Mr C disagreed with the Council’s view and there was a further exchange of correspondence. Mr C said the reason for the transfer of the property into a trust was because when Mrs D’s husband had been in good health he had told his wife he wanted Mr C and his children to benefit from his estate. However, he made no will and so when he died the entire estate passed to his wife, Mrs D.
- Having reviewed the information provided by Mr C in support of the complaint, and the Council’s evidence of the consideration given to this matter, I find no fault in its decision-making.
- In addition to the points noted by the Council as relevant to its decision-making in this matter, I also note that the 2010 Trust document is accompanied by a memorandum of wishes signed by Mrs D on 21 December 2010. This includes the following statement: “The first priority of the trustees is to ensure that myself, the settlor [Mrs D], is adequately provided for. Only if my present and future needs have been fully provided for would I want you to consider the needs of other beneficiaries”. This seems to me to be significant in that it reinforces the position that Mrs D’s needs have first call on what is held in the Trust. Those needs now include her need for care.
- I have completed my investigation on the basis set out above.
Investigator's decision on behalf of the Ombudsman