Summary: The Council had a duty under the Care Act to ensure the late Mrs X was left with her Personal Expenses Allowance (PEA). Its records show it deducted the PEA from the total of Mrs X’s income before it calculated her client contribution.

The complaint

1. Mr A (as I shall call the complainant) complains that the Council failed to leave his late mother-in-law with the PEA specified in the Care Act regulations.

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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. 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

3. I considered the information provided by the complainant and the Council. I spoke to an officer of the Council. Both Mr A and the Council had an opportunity to comment on an earlier draft of this statement. I revised my draft statement and findings after I received the Council’s comments. I invited further comments and considered the responses before I reached a final decision.

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What I found

Relevant law and guidance

4. 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.
5. 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.

6. The Care and Statutory Support Guidance says, “The local authority must leave the person with a minimum amount of income. This is known as the Personal Expenses Allowance (PEA) and the amount is set out in regulations and updates sent via a local authority circular. Anything above this may be taken into account in determining charges…..The PEA is not a benefit but the amount of a person’s own income that they must be left with after charges have been deducted…..The purpose of the PEA is to ensure that a person has money to spend as they wish. It must not be used to cover any aspect of their care and support that have been contracted for by the local authority and/or assessed as necessary to meet the person’s eligible needs.” (Annex C para 43 – 45)
7. The Care and Support Statutory Guidance also says (Annex B para 27): “Where a person has assets between the lower and upper capital limits the local authority must apply tariff income. This assumes that for every £250 of capital, or part thereof, a person is able to afford to contribute £1 per week towards the cost of their eligible care needs”.
8. The Care and Support (Charging and Assessment of Resources) Regulations 2014 says

“Personal expenses allowance for residents or temporary residents provided with accommodation in a care home:

The amount specified for the purposes of section 14(7) of the Act (“A local authority may not make a charge under subsection (1) if the income of the adult concerned would, after deduction of the amount of the charge, fall below such amount as is specified in regulations”) in relation to a resident or temporary resident provided with accommodation in a care home is £24.40 each week.”

9. The Mental Capacity Act 2005 introduced the “Lasting Power of Attorney (LPA),” which replaced the Enduring Power of Attorney (EPA). 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.

10. Government guidance on the responsibilities of a Power of Attorney says “You can only claim expenses for things you must do to carry out your role as an attorney, for example:

• hiring a professional to do things like fill in the donor’s tax return
• travel costs
• stationery
• postage
• phone calls

…. Keep your receipts and invoice the donor for your expenses”

What happened

11. Mrs X moved into residential accommodation in 2015. At the time her assets were above the upper financial limit and she funded her own care.
12. In 2018 when Mrs X’s assets fell below the upper limit, Mr A (who held Power of Attorney for her affairs) completed a financial assessment form for the Council’s help with funding Mrs X’s care. In February 2018 an officer from the Council’s Financial Assessment and Benefits (FAB) team wrote to Mr A. He said Mrs X’s assessed contribution was £289 for the first four weeks and £203 after that. He said the contribution had been calculating by “taking all of the income and any tariff income from savings above the lower threshold of £14,250 into account and deducting the statutory personal allowance and any other relevant disregards.” The spreadsheet enclosed with his letter showed the statutory PEA subtracted from the income before the deductions were calculated.
13. In March 2019 the Council asked Mr A for updated details of Mrs X’s savings. Mr A responded with the requested details.
14. In May 2019 another FAB officer wrote to Mr A. She said the new contribution towards care for Mrs X would be £245 a week. She also said Mrs X was shown to have savings of £25,748, and Mr A should send a cheque to the Council for £2498 to take Mrs X back below the upper threshold. The financial assessment calculation she sent showed the PEA deducted from Mrs X’s income before other deductions were calculated.
15. Mr A replied. He said how disappointed he was that the Council was asking Mrs X to pay £2498. He said the reason her savings had gone over the threshold was because he and his wife had been purchasing Mrs X’s clothes and toiletries themselves. He raised other concerns about discrepancies in the figures the Council gave for Mrs X’s weekly income, which it said was £276 but he said was £237. He said the new assessed contribution of £245 was actually £8 more than she received a week.
16. The FAB officer replied with an explanation of the sums quoted. She said it was easier for Mr A to pay the Council £2498 than go through the process of making Mrs X a ‘self-funder’ again, when she would have to go through the referral process again when her income fell below £23,250. She said however the Council would review the assessment if he could supply receipts for his purchases.
17. Mr A complained again about the way in which the Council was calculating the income and deductions, and specifically the tariff income stated in the Care Act (“Where a person has assets between the lower and upper capital limits the local authority must apply tariff income. This assumes that for every £250 of capital, or part thereof, a person is able to afford to contribute £1 per week towards the cost of their eligible care needs”) which the Council calculated as £36 a week. After further correspondence he wrote to say that the way in which the Council was calculating Mrs X ‘s income meant that she was not left with the statutory PEA, as she did not even have enough income to cover her assessed contribution. He asked the Council for an assurance it would reduce Mrs X’s assessed contribution to leave her with the PEA of £24.90 a week.
18. The FAB team manager replied to Mr A. She said the way in which the Council was applying the tariff income complied with the Care Act. She said the assessed contribution of £245 was correct in terms of Mrs X’s income. She said the expectation of the tariff income was to reflect the level of savings.
19. Mr A wrote back. He said the FAB manager had not responded to his concerns that Mrs X was not left with the PEA. He said the calculations showed the PEA amount was deducted from Mrs X’s income before other deductions were made from the remaining income amount, but it was not ‘ring-fenced’ to ensure it was actually available to her.
20. The FAB manager met Mr A to discuss the way the calculations were made. Mr A wrote again to the FAB manager with evidence showing how the PEA should be protected.
21. Mr A complained to the Ombudsman. He said the way in which the Council calculated the tariff income outweighed the stipulation that a care home resident must be left with the PEA.
22. Mrs X died in November 2019.
23. The Council says in response to my enquiries, “The tariff income is not what has formed the basis of the calculation. The tariff income is applied to the capital only element of the financial assessment. The financial assessment incorporates and ensures that capital and income are treated separately to ensure the amount of contribution levied on capital is treated separately from personal income”. The Council says that the Personal Allowance relates to income not capital. It says the effect of the Personal Allowance is to ensure that someone’s disposable income is not reduced below the rate of the Personal Allowance.
24. The FAB manager told us that councils must apply both sections of the Care Act: the PEA (deducted from Mrs X’s income before the Council calculated other deductions) and the tariff income.
25. In response to my earlier draft decision the Council says “the client contribution is to be paid from money available to Mrs X from her income and savings. The Financial Assessment has made clear that the money to pay both client contribution and the PEA is available from income and capital.” It says it was the responsibility of Mr A, who held the financial power of Attorney, to ensure that the application of the tariff income was factored into managing the late Mrs X’s financial affairs and that the total tariff income figure was made available from Mrs X’s capital, in order to ensure that Mrs X received the personal allowance.
26. The Council explains that Mrs X’s contribution towards the cost of her care should have been paid from the total money available - her income and savings, not just her income – and that it was Mr A’s responsibility to ensure this happened so she was left with the PEA. It concludes “(Mrs X) had enough funds from her income and her tariff income to pay her contribution and be left with her personal allowance”.
27. In respect of the personal items purchased for Mrs X by Mr A, the Council says ‘a key responsibility within the role of Power of Attorney is to ensure the financial affairs of the Power of Attorney and the person for whom they act in an official capacity are separated. (Mr A) took the decision to purchase items on behalf of (Mrs X)….it is crucial that (Mr A) was able to verify and keep receipts for any purchases made from his own income for which he is seeking reimbursement.”
28. Mr A says he has personally provided support for Mrs X’s personal purchases for some years before her savings dropped below the upper threshold and says that by doing so, has saved the Council a significant amount of money before it started to contribute towards Mrs X’s care. He says the Council never told him that there would be annual review of Mrs X’s finances.
29. Mr A also raises concerns because he considers there are other anomalies in the Council’s calculations.

Analysis

30. The Council deducted the PEA amount from Mrs X’s income as it is required to do before it carried out the other calculations. It was also obliged under the Care Act to apply the tariff income.
31. The level of Mrs X’s savings was such that there was sufficient money available to her to enable her to receive the PEA.
32. I also note the point made by Mr A that he and his wife were purchasing items for Mrs X. However, the guidance for people who hold Power of Attorney is clear that finances must be kept separate. Mr A kindly purchased the items for Mrs X but in fact, as the guidance states, it was always open to him to invoice Mrs X for the purchases as she had sufficient savings. As it was, the Council offered to consider reimbursement on receipt of proof of expenditure.

Final decision

33. There was no evidence of fault on the part of the Council.

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Investigator's decision on behalf of the Ombudsman