Summary: Mr X complained about the way the Council considered income from an investment bond when calculating his wife’s contribution to the cost of her care. The Council was not at fault.

The complaint

1. Mr X complained, on behalf of his wife, about the way the Council considered income from an investment bond when calculating her assessed contribution to the cost of her care after she moved into a care home.

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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 an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
3. 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)
4. 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

5. I spoke to Mr X and considered the information he provided.
6. I considered the Council’s replies to my enquiries and relevant law and guidance, as set out below.
7. Mr X and the Council had an opportunity to comment on my draft decision. I considered their comments before making a final decision.

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What I found

Relevant law and guidance

8. 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.
9. 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.
10. 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.
11. The guidance says councils should not take into account the surrender value of a life insurance policy or annuity when calculating the amount of capital a person has. (Annex B, paragraph 33, Care and Support Statutory Guidance 2014)
12. The guidance says in some circumstances a council can treat a person as having income they do not actually have. This is known as notional income. This includes income that could be available if the person applied for it. (Annex C, paragraph 34, Care and Support Statutory Guidance 2014)
13. Where a person disposes of capital or deprives themselves of income in order to reduce the amount they have to pay towards their care, this is known as deprivation of assets. The guidance explains what action a council can take if it thinks a person has deliberately deprived themselves of assets. (Annex E, Care and Support Statutory Guidance 2014)

What happened

14. Mrs X went into a care home in July 2018 for respite. The Council and Mr X agreed she would stay permanently in the care home in early August 2018.
15. Council records show it did not ask Mr X for financial documents until
    mid October 2018. This was after Mr X called to ask when the financial assessment would be completed because he needed to know what he had to pay towards the care costs. The Council wrote to Mr X again in November 2018 and January 2019 about the financial documents. After the second reminder, Mr X told the Council he was not able to copy and post documents. He asked for a home visit.
16. A Council officer visited Mr X in mid February 2019. At this point the Council realised the information it had about the couple’s income from benefits was not accurate. This was because Mr X had not told the Department for Work and Pensions (DWP) that Mrs X had moved into a care home. There was a delay whilst the Council waited for the DWP to clarify the benefits payable.
17. The Council completed the financial assessment in late April 2019. Mr X asked the Council to explain how it had treated an investment bond. It confirmed it had not included it when calculating how much capital Mrs X had because it had an insurance element. However, as Mr and Mrs X were withdrawing a regular sum of £300 per month from the bond it treated this sum as income. Mr X confirmed the investment was in joint names and the Council amended its calculation to show only half of the monthly payment (£150) as Mrs X’s income.
18. After thinking about this further Mr X said he was considering stopping the withdrawals. The Council initially said this would amount to a deprivation of assets because it thought his intention was to reduce his wife’s contribution to the cost of her care. It said if Mr X stopped the withdrawals it would continue to include
    Mrs X’s share as “notional income”.
19. Mr X was unhappy the Council had accused him of deliberately depriving himself of income. He explained the bond was initially worth £100,000 but withdrawals over the years had reduced the value to around £18,000. He was concerned that if he continued to withdraw from the bond this would reduce the insurance element to the point it would no longer cover the costs of funeral and associated expenses for the couple.
20. The Council considered what Mr X said. It accepted he was not deliberately depriving himself of income but was making the decision as part of longer term financial planning. However, it decided it could include the £150 as “notional income” when calculating Mrs X’s contribution to her care because it was income she could receive if Mr X chose to claim it. It said it would stop including the payment when the value of the bond reduced to £12,000 as this would be a reasonable sum for funeral expenses. In response to my enquiries, the Council said it had done some research on the cost of funerals to arrive at this figure.
21. Mr X complained to us because he felt the Council’s decision to include the £150 as income whether or not he continued to take the withdrawals was unfair and the £12,000 figure suggested was arbitrary.

My findings

22. There was a delay of two months after Mrs X went into the care home before the Council requested the financial documents it needed from Mr X for the financial assessment. Mr X did not respond to the Council’s requests for documents between mid October 2018 and mid January 2019. When an officer visited it became apparent the benefits figures needed clarification and there was a further delay whilst this was done. Therefore, although it took longer to complete the financial assessment than I would expect to see, most of the delay was due to factors outside the Council’s control. I do not consider the initial delay was sufficient to warrant a finding of administrative fault.
23. The Council followed the statutory guidance when deciding not to consider the value of the investment bond when calculating Mrs X’s capital. It also followed the guidance when it decided to treat the withdrawals as income.
24. When Mr X indicated he would stop the withdrawals the Council decided this amounted to a deprivation of assets. When Mr X explained his thinking the Council reconsidered its position and accepted the decision to stop receiving the withdrawals was part of long term financial planning. The Council was entitled to decide it would treat £150 per month as “notional income” when calculating
    Mrs X’s contribution if the withdrawals were stopped. This is because the guidance allows it to do this where a person could take an income but chooses not to do so. It also took into account the fact this particular sum had been paid for at least two years before Mrs X went into the care home.
25. The Council said it would continue to treat this sum as “notional income” until the value of the bond reduced to £12,000. It decided this was a reasonable sum to cover the cost of funeral and related expenses for the couple, after carrying out some research into the costs of funerals. Therefore, it was not an arbitrary sum.
26. I am satisfied the Council has followed the statutory guidance when carrying out the financial assessment and there is no evidence of fault.

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Final decision

27. I have completed my investigation. I have not found evidence of fault.

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Investigator's decision on behalf of the Ombudsman