Summary: Mr F complains on behalf of his sister about the Council’s decision she deprived herself of her assets. The Ombudsman has found no fault.

The complaint

1. Mr F complains on behalf of his sister, Mrs J, about the Council’s decision she deprived herself of her assets. Mr F says the Council did not advise Mrs J or himself as her attorney that she was not allowed to gift money. Mr F says this means she has been wrongly charged for the cost of her care, leaving her badly off.

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The Ombudsman’s role and powers

2. 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)
3. 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 spoke to Mr F about his complaint and considered the Council’s response to my enquiries and:
• The Care and Support Act 2014 (“the Act”)
• Care and Support Statutory Guidance (“the Guidance”)
5. Mr F and the Council had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.

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What I found

Charging for care

6. Councils can make charges for care and support services they provide or arrange. Charges may only cover the cost the council incurs. (Care Act 2014, section 14)
7. The law states that people who have over the upper capital limit (£23,250) are expected to pay the full cost of their care. They are known as self-funders. Once their capital has reduced to less than the upper capital limit, they must only pay an assessed contribution.
8. The Act and Guidance set out the rules local authorities must follow when undertaking a financial assessment to decide how much a person must pay towards the cost of their care. The Act requires local authorities to:
• ensure there is sufficient information and advice available to ensure people can understand any contributions they are asked to make.
• make the person or their representative aware of the availability of independent financial information and advice.
9. The Council’s website has information on financial assessments for social care. This says “If you give away savings and assets or put them in someone else’s name - known as ‘deprivation of assets’- to reduce the amount you pay towards your care, we may treat you as if you still had them and charge you.” The website has a link to a factsheet Care and Support at home or in the community - paying for your care which refers to a further factsheet Paying for social care - capital and gifting of assets. The same page also says: “It is also recommended that you seek independent financial advice” and has a link to information about how to find an independent financial advisor.

Deprivation of assets

10. The Guidance says people should be able to spend the money they have saved as they wish. However, it is also important people pay their fair contribution towards their care and support costs. Local authorities should ensure people are not rewarded for trying to avoid paying their assessed contribution. Councils must therefore assess a person to determine whether they have intentionally deprived themselves of assets to avoid paying care fees. A person can deprive themselves of capital in many ways, for example by making a lump sum payment to someone else as a gift.
11. Local authorities should not assume someone has intentionally deprived themselves of assets to reduce their contribution to care fees. The Guidance says there may be other valid reasons. In deciding whether the purpose of the deprivation was to avoid care fees, local authorities should consider:
• Whether avoiding the care and support charge was a significant motivation in the timing of the disposal of the asset; at the point the capital was disposed of could the person have a reasonable expectation of the need for care and support?
• Did the person have a reasonable expectation of needing to contribute to the cost of their eligible care needs?
12. If a local authority decides a person has deprived themselves of assets to avoid paying care fees, it may treat those assets as if the person still owns them (notional capital) in its financial assessment.

Mental Capacity

13. The Mental Capacity Act 2005 is the framework for acting and deciding for people who lack the mental capacity to make particular decisions for themselves. It says a person must be presumed to have capacity to make a decision unless it is established that he or she lacks capacity. The council must assess someone's ability to make a decision when that person's capacity is in doubt.
14. The Mental Capacity Act 2005 introduced the "Lasting Power of Attorney (LPA)," which 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.

What happened

15. Mrs J has care and support needs. Her care and support assessment says she has no difficulties making decisions for herself and no assessment of her mental capacity was required. It also says she requires some support with managing her finances, which was provided by Mr F who has power of attorney for Mrs J’s property and affairs.
16. Mrs J moved into extra care housing in 2016 and put her previous property on the market. In December 2017 the Council visited Mrs J at home to carry out an annual review of her finances. It was established that Mrs J still owned her previous property, which had not yet sold. The Council advised she would therefore have to pay the full costs of her care as she had capital of over £23,250.
17. The Council started invoicing Mrs J for the costs of her care. This caused some concerns as Mrs J did not have the money to pay. Mr F and Mrs J’s sister contacted the Council about this and it was agreed one of them should be involved in discussions about Mrs J’s finances.
18. The Council sent Mrs J information about its deferred payment scheme in March 2018. Initially, Mrs J said she would set up a deferred payment agreement, but on 4 May 2018 she told the Council she would instead pay the invoices.
19. Mrs J’s property was sold towards the end of 2018 and she received the funds of about £100,000 in January 2019. A few days later she made a gift to her children of £10,000. In August 2019 Mrs J paid the Council the arrears of her care charges (approximately £25,000).
20. There was a financial assessment in September 2019 as by then Mrs J’s balance was £24,000. In October 2019 the Council determined the £10,000 gift was a deliberate deprivation of assets to avoid care costs. It therefore treated this as notional capital. This meant Mrs J had more than the upper capital limit and had to continue to pay the full cost of her care.
21. Mr F complained to the Council in November 2019. He said there was no evidence Mrs J had made the gift deliberately to avoid paying for her care. Mr F said Mrs J did not have the capacity to manage her finances and had been unaware of the implications of gifting money to her children. She had made the gifts solely because it was the first time she had had enough money to and it gave her pleasure to do so.
22. The Council replied on 2 December 2019. It said Mrs J had been in receipt of care and support since 2011 and was aware of the need to have a financial assessment to determine her contribution towards the cost of her care from her income and assets. The Council therefore considered Mrs J knew she needed care and support at the time of giving the money to her children and was aware of the implications of having capital above the threshold.
23. Mr F remained dissatisfied and asked to escalate the complaint. He said the Council had not advised Mrs J or himself about deprivation of assets. It was not possible for Mrs J’s motive to have been to avoid paying for her care as she was unaware of the rules. He also noted she had been paying for her care throughout and had therefore not avoided paying.
24. The Council’s final response on 9 January 2020 did not uphold Mr F’s complaint. It said Mrs J had been advised on numerous occasions about the impact of having capital in excess of £23,250 and was therefore aware of the impact of reducing her capital. The Council had therefore concluded that avoiding the care and support charge was a significant motivation in the timing of her disposal of the asset.

My findings

25. That Mrs J made the gift is not in dispute. The only dispute is over the Council’s decision that she did this deliberately to avoid care costs.
26. It is the Council’s responsibility to decide whether Mrs J has deliberately deprived herself of capital to avoid care costs. The Ombudsman is not an appeal body. It is not for me to say whether the gift was deliberate deprivation, or what Mrs J’s motivation was in giving it. My role is to decide whether the Council followed the Guidance and considered relevant information in coming to its decision. If a council considers all this information properly the Ombudsman cannot find a council at fault just because a person disagrees with its decision.
27. The Guidance requires councils to consider whether there has been a deprivation of assets when it carries out a financial assessment. During the financial assessment, the Council spoke to Mr F about the reason for some of Mrs J’s expenditure. He explained about the gift and the Council was therefore required to consider whether this was a deprivation of assets.
28. The Guidance says gifts to family can be treated as deprivation of capital. However, any deprivation must be with the intention of reducing the amount they are charged for their care. In determining this councils must consider two questions:
• in February 2019 could Mrs J have had a reasonable expectation of the need for care and support?
• in February 2019 did she have a reasonable expectation of needing to contribute to the cost of her eligible care needs?
29. I have reviewed the Council’s decision making. It has considered both questions and found Mrs J did have these expectations. It was also aware there was no previous pattern of gifting as Mrs J did not have capital at her disposal before she sold her property.
30. Mr F says Mrs J did not have capacity to make decisions about her finances and did not understand or know about the implications of gifting. The Mental Capacity Act says a person must be presumed to have capacity unless an assessment has deemed otherwise. The Council’s care and support assessment found that whilst Mrs J needed some support to manage her finances, she had no difficulties in making decisions and no assessment was required. So, whilst I appreciate Mr F disagrees, I cannot say Mrs J lacked capacity.
31. Mr F says Mrs J’s motive was not to avoid care costs, which she was paying, but solely because it was the first time she could afford to give her children a gift. I can see Mrs J made the gift a few days after receiving the proceeds of her sale, and that this did not immediately impact on her need to pay the full cost of her care as she remained over the threshold. But it is not for me to determine Mrs J’s motive. That is a decision for the Council.
32. Mr F complains the Council did not advise Mrs J or himself about the impact of making the gift. Councils must ensure people have sufficient information and advice to understand any financial contributions they are asked to make. They must also make people aware of the availability of independent financial advice. But they are not required to act as financial advisers. I have seen the Council has information about deprivation of assets and independent financial advice on its website. The finance officer visited Mrs J in December 2017 and there were discussions about how Mrs J could pay for her care. I therefore do not find fault.
33. The Council considered whether Mrs J had a reasonable expectation of the need for care and support and of the need to contribute to the costs of her care at the time the property was sold and the gift was made. These were the considerations it needed to make and I have seen no evidence of fault in the way it made them. I therefore do not find fault.

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Final decision

34. There was no fault. I have completed my investigation.

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Investigator's decision on behalf of the Ombudsman