Summary: Mr C considers that the Council was wrong to treat spending from his late father’s bank account as deprivation of assets, and that it should contribute towards the cost of his residential care. The Ombudsman has found fault because the Council did not take into account the reasons that Mr C put forward for the spending. The Council should carry out a new assessment taking proper account of the reasons Mr C puts forward. It should also ensure that officers are familiar with the relevant guidance on deprivation of assets.

The complaint

1. Mr C complains that the Council refused to contribute towards his late father’s residential care charges despite his assets falling below the financial threshold.

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The Ombudsman’s role and powers

2. We may investigate a complaint on behalf of someone who has died or who cannot authorise someone to act for them. The complaint may be made by their personal representative (if they have one), or someone we consider to be suitable. (Local Government Act 1974, section 26A(2), as amended)
3. 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)
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 have considered Mr C’s written complaint and supporting correspondence and discussed his complaint with him. I have made enquiries of the Council and considered its response and supporting papers. I have had regard to relevant legislation and guidance. I have also sent Mr C and the Council a draft decision and considered their comments.

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What I found

Legal and administrative background

Charging for permanent residential care

6. 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.
7. 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.

Notional capital

8. In some circumstances a person may be treated as possessing a capital asset even where they do not actually possess it. This is called notional capital.
9. Notional capital may be capital which:
• would be available to the person if they applied for it;
• is paid to a third party in respect of the person;
• the person has deprived themselves of in order to reduce the amount of charge they have to pay for their care.
10. Where a person has been assessed as having notional capital, the value of this must be reduced over time. The rule is that the value of notional capital must be reduced weekly by the difference between the weekly rate the person is paying for their care and the weekly rate they would have paid if notional capital did not apply.

Property disregards

11. In some circumstances, the value of the person’s main or only home must be disregarded. This includes where the person no longer occupies the property, but it is occupied in part or whole as their main or only home by the person’s partner, or by a relative who is aged 60 or over or is incapacitated.

Deprivation of assets

12. Annex E of the guidance covers deprivation of capital. It includes the following:
• When undertaking or reviewing a financial assessment, a local authority may identify circumstances that suggest a person may have deliberately deprived themselves of assets to reduce the level of the contribution towards the cost of their care. In such circumstances, the local authority should have regard to this guidance.
• But deprivation should not be automatically assumed. There may be valid reasons why someone no longer has an asset and a local authority should ensure it fully explores this first.
• Deprivation of assets means where a person has intentionally deprived or decreased their overall assets 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 to reduce the contribution they will be asked to make towards the cost of that care and support.
• A person can deprive themselves of capital in many ways, but common approaches may be: (a) a lump-sum payment to someone else, for example as a gift; (b) substantial expenditure has been incurred suddenly and is out of character with previous spending.
• Questions of deprivation therefore should only be considered where the person ceases to possess assets that would have otherwise been taken into account for the purposes of the financial assessment or has turned the asset into one that is now disregarded.

What happened

13. Mr C lives with his wife in the Council’s area. Both are in their 60s. Mr C’s late mother and father, Mr and Mrs D, lived in and owned their own home in another part of the country. Mrs D previously provided care for Mr D who was registered blind and had substantial hearing loss. However, after Mrs D started to develop dementia, the family decided it would be best for her to move into residential care.
14. Mr C has explained that his father wanted to come and live with him and his wife, where they could provide care for him. However, they lived in a small caravan where there was not enough space so Mr D put down a deposit on a larger lodge so they could all move in together. Mr D and his brother were granted Power of Attorney for Mr C’s financial affairs in March 2017. Mr D says that his father had mental capacity and wanted the lodge to be put in his and his wife’s names, as it would be easier.
15. Mrs D’s home was sold in September 2017 and she moved into residential accommodation close to Mr C’s home. Mr C says he asked the Council for help with his mother’s care home fees, but this was turned down. Mrs D fully funded her care with payments from Mr and Mrs D’s joint bank account.
16. Mr D moved in with Mr C and his wife. Mr C says they intended to care for Mr D at home and did not envisage that he would have to go into residential care. But he and his wife’s health worsened so they had to start paying a carer to come to their home periodically to help provide care. Mr C has explained that his father then went into the same care home as his wife for a month in January 2018 for respite.
17. Unfortunately, Mr D was then diagnosed with a serious illness. Due to Mr D’s and their own health problems, Mr C and his wife decided that Mr D should move permanently into the care home. Mr C says his father was admitted permanently to the care home in June 2018.
18. Mr D opened a bank account in his sole name in March 2018 and was fully funding his care home charges from capital in the account. However, his capital fell below the upper threshold so, in February 2019, Mr C asked the Council if it would contribute towards his father’s care charges.
19. The Council undertook an initial financial assessment of Mr D’s resources and asked for supporting documentation. Mr C provided some of the documents and offered to meet to explain how his father had spent his money. The Council reviewed the application in light of the bank statements provided. It decided that, due to the property purchase and other expenditure, there appeared to have been deprivation of assets. It referred the matter to the Office of the Public Guardian (OPG) which investigated the handling of Mr D’s monies by Mr C and his brother.
20. Mrs D sadly passed away at the start of August 2019.
21. Later that month, the OPG wrote to the Council. It explained that it had closed its investigation. It said that Mr D had made many significant gifts to family members. Although a doctor had now assessed Mr D as lacking capacity, it was presumed that he had capacity at the time of making gifts. The OPG said it had reminded Mr C and his brother of their responsibilities and told them to take action to rectify certain areas where their conduct had fallen short of what was required. It said that any dispute about deprivation of capital would be a legal matter between him and the Council.
22. The Council wrote to Mr C and Mr D with a further initial financial assessment setting out Mr D’s proposed contributions if it were to fund Mr D’s care. It considered that the spending on the lodge and other items constituted deprivation of assets. It said, if it were to fund Mr D’s care, it would invoice Mr C for the difference between the full cost of the home and Mr D’s assessed contribution until his assets (including any notional assets transferred to Mr C) would have fallen below the upper threshold. Alternatively, Mr D would have to self-fund his care until at least July 2023.
23. Mr C replied to the Council in November 2019. He disagreed with the decision on deprivation of assets. He said that Mr D had wanted to move in with him and his wife so they could provide care, it had therefore been necessary to buy a larger property and they had not expected Mr D to have to go into care.
24. In December 2019, the OPG wrote to Mr C confirming that he had now satisfactorily accounted for expenditure and repaid any outstanding funds. Mr C wrote again to the Council asking for a response to his November letter.
25. In March 2020, the Council undertook a fresh financial assessment. It advised him of the initial assessed charge but requested a copy of all bank statements up to the point at which Mr D’s capital had fallen below the threshold.
26. Mr C queried what was requested. He said he had already provided copies of the joint account statements (which had been used for his late mother’s finances). He felt that his mother’s will had no bearing on his father’s financial assessment. He said that, as a pensioner, he could not afford to photocopy his father’s bank statements but suggested a meeting at which the Council could copy the documents it required. He also said the OPG was satisfied with the action taken, so he saw no reason to need to provide more information.
27. Mr D sadly passed away in April 2020, after which the Council understood that funding was no longer needed. However, after contacting the Ombudsman, Mr C made a formal complaint to the Council about its financial assessment and the way it had responded to his request to meet.
28. The Council explained that it would undertake a further financial assessment if Mr C provided the requested documentation. It provided an email address that he could use to arrange a meeting where he could provide the required information. However, it said that the outcome would be unlikely to change, because it had already concluded that there had been deprivation of assets.
29. Mr C complained again to the Ombudsman.

My assessment

Information required for assessment

30. Mr C does not consider that the Council needs further information to complete a financial assessment. But he is willing to provide the information the Council requires and has offered to meet to provide the necessary documentation.
31. The Council says that it, if Mr C wishes to proceed with the financial assessment, it still requires the following items:
• A copy of the Mr D’s bank statements from the date of opening (which Mr C has advised was in March 2018).
• Details of the “Investment” referred to in Mr D’s bank account (which appears to be care home charges) and evidence of the expenditure to date.
• Confirmation of the date that Mr C started self-funding community care services for his father, and evidence of the amounts paid.
• A copy of the late Mrs D’s will (in order to determine the beneficiary of the will).
32. I see no fault in the Council seeking the remaining documents and note that the Council provide contact details for Mr C to arrange a meeting. The Council is entitled to clarify what monies were in Mr D’s possession, including any monies received from the late Mrs D, and details of spending.

Deprivation of assets

33. Mr C has complained that the Council has decided that Mr D deprived himself of assets in order to avoid paying care charges.
34. The Council decided in August 2019 that there had been deprivation of assets, based on spending from Mr D’s account and the purchase of a lodge in the name of Mr C and his wife. In its response to Mr C’s complaint, it said that, even if it were to carry out a financial assessment, the outcome would be unlikely to change because it had already decided that there had been deprivation of assets.
35. The Council was entitled to consider whether the spending from Mr D’s account should be regarded as deprivation of assets and treated as notional capital for the purpose of the assessment. However, in order to determine whether there was deprivation of assets, it would need to know what assets Mr D had (or should have had) and the nature of any spending, which it could not determine accurately without obtaining the information that it had requested from Mr C.
36. It would also need to consider the purpose of any spending. The fact that Mr D was not the legal owner of the lodge does not in itself mean that the Council was entitled to treat the payment for the lodge as notional capital. Rather, the test the Council must consider is whether a person has intentionally decreased their overall assets in order to reduce the amount they are charged towards their care.
37. In this case, Mr C explained in his letter of November 2019 the reasons for the purchase of the lodge. However, the Council has not taken those comments into account in deciding that there has been deprivation of assets.
38. It is ultimately for the Council to reach its own view as to whether there has been deprivation of assets, but it should have considered the reasons that Mr C put forward. Not doing so was fault.
39. If Mr C would like the Council to undertake a further financial assessment, he will need to provide the information requested above, but the Council should also consider the arguments that he has put forward as to why the purchase of the lodge should not be treated as deprivation of assets.

Property disregard

40. Mr C has suggested that the value of the lodge should be disregarded, because he is over 60 and has a disability.
41. I do not consider that this mandatory disregard would apply because Mr D was not a joint owner of the lodge, which was solely in the name of Mr C and his wife.

Referral to the OPG

42. Mr C has complained that the Council did not tell him it had referred him to the OPG.
43. The Council says it only refers to the OPG if it has concerns about financial abuse. In such cases, it will not notify the persons suspected of financial abuse.
44. I see no fault here.

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Agreed action

45. The Council should:
• within one month, contact Mr C to make arrangements to meet to obtain the information that it needs to complete a financial assessment to determine whether Mr D would have been eligible for contributions to his care charges;
• within three months, (provided that it has received the required information) complete the assessment - in carrying out the assessment, it must take into consideration the reasons that Mr C has put forward as to why the purchase of the lodge should not be treated as deprivation of assets;
• within three months, ensure that officers are familiar with the relevant section of the Care Act Guidance in respect of deprivation of assets and how this should be considered.

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Final decision

46. I have closed my investigation into Mr C’s complaint because the Council has agreed to the above recommendations which are a suitable remedy for the injustice caused.

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Investigator's decision on behalf of the Ombudsman