The Ombudsman's final decision:
Summary: There is no evidence of fault in the way the Council considered the financial assessment for the late Mrs X. The complaint is not upheld.
- The complainant (whom I shall call Mrs A) complains that the Council charged the late Mrs X too much for her care home fees as it would not accept the renovation costs incurred in selling Mrs X’s house.
The Ombudsman’s role and powers
- We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word ‘fault’ to refer to these. 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 the written information provided by Mrs A and by the Council. Both Mrs A and the Council had the opportunity to comment on an earlier draft of this statement before I reached a final decision.
What I found
- 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 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 council must assess the means of people who have less than the upper capital limit, to decide how much they can contribute towards the cost of the care home fees.
- The Care and Support statutory guidance says, “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, “It is up to the person to prove to the local authority that they no longer have the asset. If they are not able to, the local authority must assess them as if they still had the asset. For capital assets, acceptable evidence of their disposal would be:
(a) a trust deed
(b) deed of gift
(c) receipts for expenditure
(d) proof that debts have been repaid”
- The guidance also says, “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….As a first step, a local authority should seek to charge the person as if the deprivation had not occurred. This means assuming they still own the asset and treating it as notional capital or notional income”.
- The Mental Capacity Act 2005 introduced the “Lasting Power of Attorney (LPA)”. An LPA is a legal document, which allows people to choose one person (or several) to make decisions about their health and welfare and/or their finances and property, for when they become unable to do so for themselves. The 'attorney' is the person chosen to make a decision, which has to be in the person’s best interests, on their behalf.
There are two types of LPA:
Property and Finance LPA – this gives the attorney(s) the power to make decisions about the person's financial and property matters, such as selling a house or managing a bank account.
Health and Welfare LPA – this gives the attorney(s) the power to make decisions about the person's health and personal welfare, such as day-to-day care, medical treatment, or where they should live.
The Ofﬁce of the Public Guardian (OPG) oversees the work of attorneys and court appointed deputies and produces detailed guidance for them.
- Mrs A held a power of attorney for the late Mrs X. When Mrs X went to live in residential care, her house had to be sold but Mrs A says it needed extensive renovations first. She says the house was on the market for over two years. She says that with the agreement of the Court of Protection and the OPG, she arranged for her own daughter (Miss A), an experienced property developer, to renovate the house for sale. Mrs A says she was concerned because Mrs X’s care charges were rising and at that time she owed over £30,000 to the Council.
- Miss A completed the renovation works. She submitted an invoice to Mrs X for £23,892 in August 2013, together with an extensive list of works completed. The property sold in September 2013 for £124,995. Mrs X paid the full cost of her care until 2015 when Mrs A said Mrs X’s assets fell below the upper threshold limit.
- The Council carried out an assessment of Mrs X’s assets in accordance with the regulations. It calculated on the basis of the completed financial assessment form that the amount of Mrs X’s capital had diminished much faster than expected. An officer telephoned Mrs A and asked for a copy of the completion of sale document as she said she thought (based on an internet search) that the property had sold for more than the capital amount which had been declared on the financial assessment form suggested.
- Mrs A sent a copy of the completion of sale document to the Council. The Council completed a diminishing capital calculation from which it assessed that around £32,000 was missing from the total declared. It wrote to Mrs A asking for details of what had happened to the proceeds from the sale.
- Mrs A wrote to the Council in January 2016 and said that most of the money had been paid for the necessary renovations to the property before the sale. The Council sent a letter in February 2016 advising that Mrs X was liable to pay the full cost of her care charges, but that the charges could be reviewed if evidence as to the disposal of the sale proceeds was provided.
- The Council says Mrs A sent a list of the renovation costs and personal gifts, but without any receipts or invoices. In March the Council wrote again asking for documentary proof and receipts, for its audit purposes. In response Mrs A sent a list of the works which had been done, at a cost of £24,605.26, and said the renovation was undertaken by Miss A’s property company.
- In June the Council asked for itemised invoices and receipts for the work. It says in October it then received an invoice from Miss A, dated 02 August 2013, for a total cost of £23, 892.06. It says it also received a list of suppliers and bank statements showing transfers to a total of £23,892.06. It wrote to Mrs A again and said that the bank statement provided only showed capital transfers out of the account, not what the money was paid for: it requested receipts again.
- In November 2016 solicitors wrote to the Council on Mrs A’s behalf. They enclosed a further copy of the invoice. They said Mrs A was very upset that despite sending bank statements, invoices and receipts the Council said it had not received them. They said the sum of £23,892 was paid out for renovation works prior to the sale and was then reimbursed from the sale proceeds.
- In December 2016 Mrs X died.
- Mrs X wrote to the Council with a copy of the death certificate. She said her instruction to her daughter to carry out the renovation works had been undertaken with the approval of the OPG and the Court of Protection and she said no other contractor would have waited until the property sold to be reimbursed. She said Mrs X had paid out £120,000 for the costs of her care and she asked the Council to reimburse the late Mrs X the costs which she said had been incorrectly paid. She complained about the way she had been challenged about the costs despite having obtained the approval of the OP for her actions.
- The Council continued to correspond with Mrs A. It asked why the amounts quoted for the renovations in June 2016 differed from the amount she quoted later. It asked why the invoice submitted in June 2016 stated “materials included” but attached separate receipts for all the materials used between 2010 and 2013. It asked for the registration details of Miss A’s company (as it said it could not find them at Companies House) and also asked who paid for the works prior to the sale of the property.
- In January 2018 Mrs A complained to the Ombudsman. She said the matter was no further forward and she had provided the Council with all the information it had requested. She said it was a “total injustice” to the late Mrs X to have paid in full for her own care after the point at which her assets fell below the upper threshold limit.
- The Council says the bank statements which Mrs A provided did not match the receipt dates: it says there were multiple invoices for the same works but the dates and amounts differed. The Council says it requires evidence of who paid for the work on the property before it was sold, and invoices from all the individual contractors used to carry out the work on the property. It adds that is prepared to review the financial assessment, subject to satisfactory evidence being supplied within a specific timescale.
- Once it was asked to assess Mrs X’s finances as below the upper capital limit, the Council had a duty to investigate where it considered that the amount of money which accrued from the sale of the property had diminished faster than it expected. It has taken the view that so far it has not received the requested details of expenditure which would satisfy it that its initial assessment was incorrect.
- It is not the role of the Ombudsman to question decision taken properly by a council however much people may dislike or disagree with them. There is no evidence of fault in the way the Council has considered the information presented to it about the late Mrs X’s finances.
- There is no evidence of fault on the part of the Council.
Investigator's decision on behalf of the Ombudsman