Summary: There was no fault in the Council refusing to give Ms D a deferred payment agreement or in its decision that Ms D had deliberately deprived herself of assets by giving her house to her daughter.

The complaint

1. Ms C complains for her mother Ms D about Middlesbrough Borough Council (the Council). She says it unfairly decided her mother had deliberately deprived herself of assets and failed to offer her mother a deferred payment agreement.

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The Ombudsman’s role and powers

2. We cannot investigate late complaints unless we decide there are good reasons. Late complaints are when someone takes more than 12 months to complain to us about something a council has done. (Local Government Act 1974, sections 26B and 34D, as amended)
3. 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)

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How I considered this complaint

4. I considered Ms C’s complaint to us, the Council’s response to her complaint and documents described later in this statement. I discussed the complaint with Ms C. Both parties had the chance to comment on a draft of this statement.

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What I found

5. Councils charge people for residential care and they have the power to charge for home care. In either case, if councils charge, they need to carry out a financial assessment applying rules set out in regulations and statutory guidance. The law about charging changed in April 2015. As this complaint is about a financial assessment before April 2015, the guidance and law below (Fairer Charging and Charging for Residential Accommodation Guide) is what was in force before April 2015.
6. Fairer Charging was national guidance about charging for non-residential care. The 2014 update said:
• Paragraph 63: the value of the main home occupied by the user should not be taken into account, but other forms of capital may be taken into account, as set out in Charging for Residential Accommodation Guide (CRAG);
• Paragraph 84: charges should ensure a person’s income was not reduced below basic levels of income support plus a buffer of 25%. Income should be assessed net of housing costs and council tax. Housing costs should be assessed net of housing benefit.
7. The CRAG update April 2014 at paragraphs 6.068 - 6.070 and 6.073 said:
• A council could consider a person had deprived themselves of a capital asset to reduce their care charge if avoiding the charge was a significant motive for the disposal of the asset (it need not be the main motive). If, for example the capital has been used to repay a debt, consideration should be given as to whether there was a need for the debt to be repaid at that time;
• The timing of the disposal was relevant when considering the purpose. It would be unreasonable to decide a person had disposed of an asset in order to reduce care charges if the disposal took place at a time when he was fit and healthy and could not have foreseen the need for care;
• If the council decides a person has deprived themselves of capital in order to avoid or reduce a care charge then the council will need to decide whether to treat them as having the capital and assess the charge payable accordingly and then whether to recover the assessed charge from the person or if they cannot pay the assessed charge, to use the law to transfer liability for part of the charge to the third party who has benefitted from the capital asset.
8. Because a person receiving home care will need to pay living costs like food, rent and utilities, the charging rules must ensure they have enough money to meet these expenses. Councils must ensure the person’s income is not reduced below a specified level after charges have been deducted. This must be after any housing costs such as rent and council tax net of any benefits provided to support these costs.
9. A deferred payment agreement (DPA) is an arrangement with a council that lets people use the value in the homes to help pay care home costs. You can only get a DPA if you receive care in a care home.

Key facts

10. Ms D lived in a house which she owned. In May 2014, she moved in to a rented property. Ms C told me Ms D moved to the rented property because she (Ms D) was fleeing an abusive partner. The partner later moved out of Ms D’s house. Ms C and her husband then moved in to Ms D’s property. Ms C managed Ms D’s finances (welfare benefits) as her appointee. The DWP decides whether a person is suitable to be appointee for another person’s finances.
11. Ms C completed an application for housing benefit for Ms D. Ms C put on the application form that Ms D had left her home, which she owned outright and had moved into a rented property. Ms D told the Council she intended to sell her property to her daughter. The Council gave Ms C a second property valuation form and told her to complete and return it. The Council told me that when Ms C and Ms D visited the office to make a claim for housing benefit, Ms D said Ms C was paying her £450 a month rent.
12. In June 2014, the Council wrote to Ms C to say she had not returned the second property valuation form and so it could not pay her housing benefit. Ms C did not appeal this decision. So the claim was cancelled.
13. In July 2014, Ms D was receiving home care. The Council carried out a financial assessment and calculated her charge at £75 a week. The Council made allowances for council tax in the financial assessment as Ms C said Ms D owned a property. It did not make an allowance for housing costs.
14. In October 2014, Ms C moved to rented sheltered housing, where she remains. Ms C continued to receive home care through a direct payment.
15. In November 2014, the Council’s finance team wrote to Ms C saying it had reviewed Ms D’s financial assessment. It explained the Council would not include the rent Ms D was paying as an allowable expense as it was her decision to move into a rented property. The Council went on to say:
• Ms D should have considered her rent when she took on the property as she could not get housing benefit to cover this because of owning a second home
• Ms C had been paying the rent but could not continue to do so. This was a private arrangement
• It would not consider housing costs as part of the financial assessment.
16. Ms C told us Ms D gave her the house in 2015. Ms C also told us:
• She (Ms C) moved in to her mother’s house to do it up and sell it. The house did not sell and she (Ms C) had taken out loans to do it up.
• She only found out about deferred payment agreements in the last year and feels her mother should have been offered one.
• Her mother was vulnerable to financial exploitation from other members of the family.
17. In 2017, the Council took over as Ms D’s appointee. The Council pays Ms C, using the direct payment, to be her mother’s personal assistant.
18. Ms C complained to the Council in 2019 about the issues she raised in her complaint to the Ombudsman. The Council responded saying it would not consider the complaint because Ms C did hot have appointeeship or power of attorney for Ms D. So Ms C complained to us.
19. The Council told us:
• Ms C contacted social care in 2014 when her mother had moved into sheltered housing to say she had been advised Ms D was not entitled to claim housing benefit because she owned a property and had chosen to move to rented property. The decision on housing benefit was subject to an appeal but it was not appealed;
• It would not make an allowance for rent/housing costs in Ms D’s financial assessment for care charges because she had chosen to move from her own property so depriving herself of a home. The house was valued at £100,000 in 2011. It would have been worth the same when Ms C gave it to her mother in 2015. This was a clear deprivation of an asset;
• There were no concerns about Ms C’s finances. The Council was managing these. She had plenty of money to pay for her care and daily living expenses. There were allowances in her financial assessment for disability expenses;
• Ms D was not entitled to detailed information about her mother’s finances because she did not have appointeeship or Power of Attorney.

Was there fault?

20. The law allows councils to offer deferred payment agreements (DPAs) for people in residential care. Ms C was and is not receiving residential care and so there was no fault in the Council not offering her a DPA in 2014.
21. There was no fault in the Council’s calculation of Ms D’s care charge. The Council followed law and guidance at the time. The Council was entitled to decide there had been a deliberate deprivation because it applied the tests set out in CRAG: Ms C was already receiving care when she gifted the house and although she may have had more than one motive (the stated motive being to ‘repay’ Ms D for the money spent doing the house up), it was open to the Council to conclude that there was a second significant motive: to minimise the care charge.

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Final decision

22. There was no fault in the Council refusing to give Ms D a deferred payment agreement or in its decision that Ms D had deliberately deprived herself of assets by giving her house to her daughter.
23. I have completed the investigation.

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Investigator's decision on behalf of the Ombudsman