Peterborough City Council (20 002 999)

Category : Adult care services > Charging

Decision : Not upheld

Decision date : 08 Mar 2021

The Ombudsman's final decision:

Summary: There is no evidence of fault in the Council’s decision that Mrs X deliberately deprived herself of capital with the intention of decreasing her liability for care charges. The Council also considered whether Mrs X’s daughter had a beneficial interest in one property without fault. The Council is willing to consider any further evidence the family has and has paid Mrs X’s care charges until the complaint is decided.

The complaint

  1. Mrs X’s children says the Council wrongly decided their mother deliberately deprived herself of capital with the intention of decreasing her liability for care charges. They say that Mrs X’s intention was not to avoid care charges, but to ensure the financial security of her children during her lifetime.
  2. Mrs X’s children also complain the Council has not considered whether her daughter has a significant beneficial interest in one property.

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The Ombudsman’s role and powers

  1. 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)
  2. 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

  1. I read the papers put in by Mrs X’s family.
  2. I considered the Council’s comments about the complaint and any supporting documents it provided.
  3. Mrs X’s family 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 permanent residential care

  1. The Care Act 2014 and the associated Care and Support Statutory Guidance (“the guidance”) set out the rules the Council must follow when undertaking a financial assessment to decide how much a person has to pay towards the costs of their residential care.
  2. The law states that people who have over the upper capital limit (currently £23,250) should pay the full cost of their residential care home fees. Once their capital has reduced to less than the upper capital limit, they only have to pay an assessed contribution towards their fees.

Deprivation of capital

  1. Sometimes a person may be the legal owner of a property but not the beneficial owner of a property. In other words, they have no rights to the proceeds of any sale. In such circumstances the Council must not take the property into account.
  2. Annexe E of the guidance covers issues relating to the deprivation of capital. The guidance states 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.
    • 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. While the Care Act 2014 represents an important step forward in redefining the partnership between the State and the individual, it is important people contribute to the care costs they are responsible for. This is important to the overall affordability of the care and support system. A local authority should therefore ensure people are not rewarded for trying to avoid paying their assessed contribution.
    • But the Council should not automatically assume deprivation. 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 pay 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 make towards the cost of that care and support.
    • A person can deprive themselves of capital in many ways, but common approaches may be transferring the title deeds of a property to someone else or assets being put into a trust that cannot be revoked.
    • There may be many reasons for a person depriving themselves of an asset. A local authority should therefore consider the following before deciding whether there has been deprivation to avoid care and support charges:

(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?

Background to the complaint

  1. Mrs X received a care package at home, consisting of 5 calls a day from carers and one visit from her son, from 2015. At this point she was self-funding, as she had capital above the upper capital limit.
  2. In 2016, 12 months after the complex care plan started, Mrs X put both the properties that she was the legal titled owner of into trust. The trust document has a clause that says ‘if the occupier subsequently needs to move to a care/nursing home then in consideration of a simultaneous transfer of the property to the legal owners the legal owners shall pay equally between them the difference between the Government funding for care home fees to which the occupier is entitled and the actual fee chargeable to enable the occupier to move in to a care/nursing home of her own choice’. The Council says that this shows that care home fees were a consideration when placing both properties into Trust when it would have been reasonable for Mrs X to consider how she would pay her future care fees (i.e. if she went into a care/nursing home permanently).
  3. Mrs X had a stay in respite care in 2018. A financial assessment in October 2018 showed that at this point Mrs X had capital over the upper capital limit and so the Council assessed her as paying the full cost of her stay in respite.
  4. Mrs X decided to stay in residential care from 21 January 2019. After a financial assessment the Council wrote to her on 28 January. This said ‘the Council assessed Mrs X as liable for the full cost of her care fees as the Council thought her to have notional capital assets over the upper capital limit. This was because Mrs X gifted a property (not her main home) to her daughter when she was receiving home care and the Council considered this deprivation of capital. The Council said that it would also treat the gifting/transfer of her main home to Mrs X’s other two children as capital deprivation’.
  5. Mrs X’s solicitors wrote to the Council in February 2019. They said that Mrs X made property transfers when she was living at home and had no intention of going into care. The solicitor said that avoidance of care home fees was not a consideration on the date the transfers occurred as at that point Mrs X was in hospital and not expected to recover from an infection. Mrs X put the properties in her children’s names with the intention of making probate simpler if she died.
  6. The solicitor also argued that Mrs X’s daughter had a substantial beneficial interest in the first property. This was because Mrs X’s husband had owned the property and it passed to Mrs X on his death in 2007. The solicitor said that Mrs X’s daughter had lived in the first property and paid for utilities for several years.
  7. In response to further correspondence from the Council, Mrs X’s solicitor argued that it did not consider that Mrs X’s need for a ‘low level care package’ at home meant that a need for residential care would follow.
  8. After some correspondence, Mrs X’s solicitors made an offer to the Council. It suggested that one daughter bought the main home for £300,000 from Mrs X (the money to be used for Mrs X’s care fees) on the condition the Council accepted that Mrs X did not have a beneficial interest in the second property. The Council rejected the offer in September 2019.
  9. In October 2019 the Council said that it was prepared to take a pragmatic view and treat Mrs X as having capital of £400,000 in January 2019. This would be on the basis that Mrs X took over funding her current care costs on 1 December 2019 and paid the sum owed to the Council. Mrs X’s solicitors rejected this offer – the Council then said it would reduce the capital to £375,000 and allow the family more time. Mrs X’s family rejected this offer and the Council said it would treat the matter as an official complaint. The Council did not uphold the complaint and Mrs X complained to us. The Council is paying for Mrs X’s residential care until resolution of the complaint.

My analysis

  1. Mrs X’s children complain the Council wrongly decided their mother deliberately deprived herself of capital with the intention of decreasing her liability for care charges.
  2. In response to my enquiries, the Council has said that Mrs X had both her properties (she was the legal titled owner) put into trust on 24 May 2016 some 12 months after the complex care plan started. The Council assessed Mrs X as self-funding for care from June 2015 due to having capital (excluding property) above threshold. As Mrs X had a complex care plan in place 12 months before she placed the properties in trust the Council said there was a reasonable expectation that Mrs X would need her capital to fund her ongoing care.
  3. Mrs X’s children complain the Council has not considered whether her daughter has a significant beneficial interest in one property.
  4. In response to my enquiries, the Council has said it does not consider Mrs X’s daughter as being the beneficial owner of the property before it was placed in trust. The Council says this is because it has not been provided with any evidence to support this e.g. evidence of her having made a financial contribution towards the purchase of the property (initial lump sums/mortgage payments). The Council has said that though the families solicitor has said that Mrs X’s daughter has lived there for many years and was responsible for the general upkeep and payment of utilities, this would be in the same way a normal paying tenant would be responsible for these costs and have paid.
  5. The Council has said it would consider carrying out a new financial assessment if the family can provide details to support that Mrs X’s daughter has a beneficial interest.

Finding

  1. My role is to decide whether there has been fault in the Council’s decision making process. It is not to decide whether deprivation of capital has occurred or if Mrs X’s daughter has a beneficial interest in one of the properties.
  2. The Care Act 2014 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 to 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?

  1. I consider the Council has considered the Care Act guidance when deciding whether deprivation of capital has occurred. It has considered whether Mrs X was aware that she needed care and support before her assets were put into trust (this was the case as she received care at home). And, that she had an expectation that she would need to contribute towards the cost of her care needs (the Council had assessed her as self funding her care previously). So, I can find no evidence of fault in the Council’s decision making process on this point. I appreciate that Mrs X’s family disagree with the decision, but it was a decision the Council was entitled to make.
  2. On the matter of the beneficial interest in one of the properties, I can see the Council has considered the arguments put forward by the families’ solicitors. It decided there is not enough evidence for it to consider Mrs X‘s daughter has a beneficial interest. However, it is willing to reconsider if the family can provide further evidence. I can find no fault in the Council’s decision making and its view that living in the property, as a tenant would, does not automatically mean Mrs X’s daughter has a beneficial interest. The Council has considered all the relevant evidence Mrs X’s family gave it before making its decision.

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Final decision

  1. I have completed my investigation of this complaint. This complaint is not upheld, as I have found no evidence of fault.

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Investigator's decision on behalf of the Ombudsman

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