Summary: Mr and Mrs X complain on behalf of Mrs X’s mother, Mrs Y, about the Council’s decision that she deprived herself of an asset to avoid its inclusion in a financial assessment for care. Mr and Mrs X say Mrs Y has unfairly had to pay for the care she receives. The Ombudsman finds no fault in the way the Council made its decision.

The complaint

1. Mr and Mrs X complain the Council unfairly decided Mrs Y deprived herself of an asset to avoid its inclusion in a financial assessment for her care.
2. Mr and Mrs X say Mrs Y has unfairly had to pay for the care she receives in a nursing home as a result.

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The Ombudsman’s role and powers

3. 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)
4. We may investigate complaints from a person affected by the matter in the complaint, or from someone the person has authorised in writing to act for him or her. (section 26A or 34C, Local Government Act 1974)
5. 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

6. I have read the information provided by Mr and Mrs X and notes of a discussion with Mrs X about the complaint.
7. I have made enquiries to the Council and considered the information provided by it.
8. Mr and Mrs X and the Council have had the opportunity to provide their comments on a draft of this decision. I have considered their comments before making a final decision.

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What I found

Legal and administrative background

9. The Care Act 2014 introduced a single framework for assessment and support planning.

Charging

10. The Care Act, supported by the Care and Support Statutory Guidance, sets out how councils should work out how much service users should pay for services. Under those rules, service users with capital or income above upper limits have to meet the full costs of care services. The capital upper limit is £23,250.

Deprivation of capital

11. Paragraph 8.27 of the Statutory Guidance says:

“People with care and support needs are free to spend their income and assets as they see fit, including making gifts to friends and family. This is important for promoting their wellbeing and enabling them to live fulfilling and independent lives. However, it is also important that people pay their fair contribution towards their care and support costs”.

12. Annexe E to the Statutory Guidance says:

“People should be treated with dignity and respect and be able to spend the money they have saved as they wish – it is their money after all. [But]…it is important that people pay the contribution to their care costs that they are responsible for. This is important to the overall affordability of the care and support system. A local authority should therefore ensure that people are not rewarded for trying to avoid paying their assessed contribution.”

“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.”

13. Annexe E also says:

“There may be many reasons for a person depriving themselves of an asset. A local authority should therefore consider the following before deciding whether deprivation for the purpose of avoiding care and support charges has occurred:

(a) 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?

(b) did the person have a reasonable expectation of needing to contribute to the cost of their eligible care needs?”

Mental capacity

14. One of the key principles of the Mental Capacity Act 2005 is that every adult has a right to make their own decisions and must be assumed to have capacity to make them, unless it is proved otherwise. The Mental Capacity Act Code of Practice says it is important to start from an assumption of capacity.

Power of attorney

15. Enduring power of attorneys (EPA) allowed people to appoint a representative, or attorney, to manage and make decisions about their property and/or financial affairs on their behalf.
16. The Mental Capacity Act 2005 introduced lasting power of attorneys (LPA) which replaced EPAs. However, EPAs created prior to the introduction of LPAs remain valid provided they were prepared and completed properly.

The Council’s Deprivation of Assets Policy

17. The Council’s deprivation of assets policy says:

“A key to the overall affordability of the Care and Support scheme is that the Council correctly calculates the person’s contribution towards their care and support costs. Therefore, the Council will make robust, but necessary enquiries to ensure that those who have a legitimate entitlement to receive Care and Support funding, do so.”

“The Council will not automatically assume that deprivation has occurred as there may be valid reasons why someone did have, but no longer has an asset. The Council will undertake further enquiries and it is up to the person or their legal representative to prove they no longer have the asset, furthermore the Council will need to be provided with information and evidence as to why the person no longer has it. This will enable the Council to make an informed decision as to whether deliberate deprivation of the asset has occurred.”

“The term deliberate deprivation covers a broad range of ways in which the owner of an asset might transfer it out of their possession, for example:

• transferring the ownership of a property to someone else;
• putting money into a trust that cannot be revoked.”

What happened

18. Mr and Mrs Y lived in a property which they jointly owned. In 2003, Mrs Y signed an EPA which appointed her daughter, Mrs X, and a third party as her attorneys.
19. In 2008, Mrs Y became the sole owner of the property. Mr and Mrs X say Mrs Y became concerned about the responsibility of the upkeep and maintenance of the property.
20. They say Mrs Y was also concerned about what would happen when the leasehold on the property expired. Mr and Mrs X say Mrs Y wanted to remain living in the property without the responsibility of ownership.
21. Mrs Y sought legal advice and in 2009 set up a Trust which transferred her property to Mrs X and two other family members as Trustees. The Trust stated that Mrs Y could remain living in the property rent-free for as long as she wished. Mrs Y was required to keep the property in good repair with no cost to the Trustees. A clause within the Trust stated that no income or capital from the Trust Fund could be paid to Mrs Y.
22. Mrs X bought the freehold of the property in 2014 and made improvements to the house for the benefit of Mrs Y.
23. In 2017, Mrs Y was diagnosed with the early stages of dementia.
24. In 2019, Mrs Y’s health deteriorated, and she required residential care.
25. The Council carried out a financial assessment in June 2019 and requested information about Mrs Y’s income and capital. Mrs X told the Council about the Trust.
26. The Council decided to treat the transfer of Mrs Y’s property as deprivation of assets. Because of this, Mrs Y was required to pay for her care costs.
27. Mr and Mrs X disagreed with the decision and complained to the Council. They said Mrs Y had been in good health at the time the Trust was set up and had not known she would require care. They said Mrs Y decided to create the Trust after taking legal advice.
28. The Council’s decision was reviewed by an asset deprivation panel in October 2019.
29. In November 2019, the Council told Mr and Mrs X it had upheld its decision. It referred to the reason stated for the creation of the Trust (that Mrs Y was concerned about the responsibility of ownership) and the works carried out at the property by Mrs X. The Council said the Trust contradicted the explanation provided. It said the Trust stated Mrs Y was to keep the property in good repair at no cost to the Trustees.
30. The Council also said it could not see why Mrs Y was worried about the length of time remaining on the lease given that she was said to be fit and healthy at the time. It also said that leaving the property in a will would have achieved the desired result.
31. Mr and Mrs X disputed the panel’s decision. They said there was no contradiction as Mrs Y had paid for the improvements to the property, and Mrs X had only organised the tradesmen. They said Mrs Y was concerned about the remaining term of the leasehold because it may have affected her ability to sell the property and downsize into sheltered accommodation.
32. Mr and Mrs X said Mrs Y did not want the property to become part of any settlement if Mr X was to remarry, and that leaving the property in a will would not have ensured the property remained in the family bloodline.
33. The Council reviewed its decision in another asset deprivation panel hearing in January 2020.
34. The Council told Mr and Mrs X it had considered the relevant information relating to the transfer and maintained its original decision. It said there were sufficient primary facts to reasonably conclude that a significant factor in the property transfer was to avoid it being included within a financial assessment.
35. Mr and Mrs X remained unhappy with the Council’s decision and brought their complaint to the Ombudsman.

Was there fault by the Council?

36. My role is to decide whether there was any fault by the Council in its assessment leading to its decision that Mrs Y had deprived herself of an asset to avoid care and support charges.
37. The key issue is not that Mrs Y transferred the property. She was entitled to do what she wished with her capital. But, having done so, the Council was entitled to investigate whether avoiding care costs was a significant motive in the reasons for doing this.
38. I have reviewed the Council’s records and am satisfied there is no fault in the way the Council made its decision.
39. As stated at paragraph 13, the Council must consider whether Mrs Y could have had a reasonable expectation of the need for care and support and have a reasonable expectation of needing to contribute to the cost of those care needs.
40. The Council has explained it considered the timing of the transfer. It says it acknowledges Mr and Mrs X say Mrs Y was fit and healthy at the time. However, it refers to Mrs X’s statement that Mrs Y intended “to eventually downsize into sheltered accommodation”. The Council says this indicates Mrs Y recognised she may need support in later life.
41. I have seen a copy of the notes made as part of the legal advice sought by the Council when considering its position. The Council sought advice about the content of the Trust and about the reasons for the transfer as provided by Mr and Mrs X.
42. The legal advice considered the Trust’s clause that no income or capital from the Trust Fund was to be paid to Mrs Y. The Council decided this clause indicated an intention to prevent Mrs Y from being required to pay care costs.
43. Mrs X says if it were Mrs Y’s intention to deliberately decrease her assets, there would be evidence of a decrease in her savings. The Care Act 2014 allows the Council to decide whether to charge a person when it is arranging to meet a person’s care and support needs. Where a Council decides to charge, it must carry out a financial assessment of what the person can afford to pay. In carrying out the assessment, the Council must assess the income and capital of the person. The assessment of capital includes property.
44. Mrs X says the Council has automatically assumed that deliberate deprivation of assets has occurred. She is not satisfied the Council considered the reasons for the transfer of the property and questions if the Council based its decision on evidence or assumptions.
45. The legal advice obtained, and the explanations provided by the Council when explaining its decision, confirm it considered the points raised by Mr and Mrs X. I am satisfied the Council made appropriate enquiries and its decision was not based on assumptions, but on the findings and subsequent consideration of those enquiries.
46. I acknowledge Mr and Mrs X disagree with the Council’s decision. However, as stated at paragraph three, the Ombudsman 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.
47. The evidence shows the Council made enquiries, considered Mr and Mrs X’s explanations, and sought legal advice regarding those explanations. The Council also followed the relevant guidance and its own deprivation of assets policy. As a result, I am satisfied there is no evidence of fault in the way the Council reached its decision.

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Final decision

48. I have found no fault by the Council and have concluded my investigation on this basis.

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Investigator's decision on behalf of the Ombudsman