Privacy settings

LGO logogram

Review your privacy settings

Required cookies

These cookies enable the website to function properly. You can only disable these by changing your browser preferences, but this will affect how the website performs.

View required cookies

Analytical cookies

Google Analytics cookies help us improve the performance of the website by understanding how visitors use the site.
We recommend you set these 'ON'.

View analytical cookies

In using Google Analytics, we do not collect or store personal information that could identify you (for example your name or address). We do not allow Google to use or share our analytics data. Google has developed a tool to help you opt out of Google Analytics cookies.

Lincolnshire County Council (20 004 464)

Category : Adult care services > Charging

Decision : Not upheld

Decision date : 15 Mar 2021

The Ombudsman's final decision:

Summary: There is no fault in the Council’s decision making during the financial assessment process. The Council has considered the law, guidance and reached a decision that deprivation of capital has occurred. The Council has reached a view on the amount of capital it will disregard without fault. New explanations of the gifting made at appeal had not been made to the Council before and it is at the Council’s discretion if it wants to consider a new assessment of this information.

The complaint

  1. The complainants, the family of Mrs X, complaint the Council has not taken into account previous financial gifts when deciding that there has been deprivation of assets. Mrs X’s family complains the amount of capital that has been allowed for gifting is too low and has meant that previous gifts have been assessed as notional capital, so they have to find the money for care home fees.

Back to top

The Ombudsman’s role and powers

  1. 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)
  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)

Back to top

How I considered this complaint

  1. I read the papers put in by Mrs X’s family and discussed the complaint with a member of the 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.

Back to top

What I found

The law and guidance

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?

Key facts

  1. Mrs X went into residential care in January 2009, the NHS paid for her care under continuing healthcare. Her house was sold in July 2010. Mrs X’s husband was also in self funded residential care and died in July 2011. Mrs X self funded her care costs from February 2016, as she had capital above the upper capital limit.
  2. In 2016 the Council carried out a financial assessment. This showed Mrs X had capital above the upper capital limit and so she continued to self fund her care.
  3. Email correspondence in 2016 between the Council and Mrs X’s family showed the Council allowed gifts of £11,000 in total between 2008 and 2016. Mrs X’s family provided evidence of cheque stubs which supported this between 2008 and 2010. The Council told Mrs X’s family in an email that the level of gifting needed to be reduced to preserve Mrs X’s capital to pay for her care. In an email from December 2016 the Council said ‘the decision is the sum of £1500 per annum would be allowed’.
  4. The Council has an adult care charging policy which has a section on deprivation of assets. This explains that in cases where it is considered there may have been a deprivation of assets with a view to reducing care fees they will be considered by the Financial Resolution Group (FRG) with a final decision made by the Head of Service.
  5. In a letter to Mrs X’s family in 2016 the Council said the information provided by the family in the financial assessment showed that gifts of £3000 had been given to the 6 children totalling £18,000. Also 2 investment bonds had been taken out for £101,849 while Mrs X was in the care home. The Council said that as Mrs X had been in receipt of care services for a number of years, the FRG’s view was that this was deprivation of capital.
  6. The Council carried out a new financial assessment in 2019. The finance team wrote to Mrs X’s family in September 2019. This said that Mrs X should continue to self fund her care and was not eligible for Council funding. The Council said the case had been considered by the Council’s FRG. The Council said that in its opinion £121,494 should have been preserved for Mrs X’s future care needs. This consisted of:
    • £72,000 in gifting to Mrs X’s children
    • £49,494 capital difference.

The Council said that it had applied a discretionary disregard of £12,600 so it assessed Mrs X as having notional capital of £108,894 plus actual capital of £128,519. This left a total capital of £237,413 in February 2016, which should leave £103,815 of notional capital in August 2019.

  1. Mrs X’s family complained to the Council about the decision in October 2019. They said:
    • Each child (there are 6 children) had been gifted £200 for a birthday and £500 for Christmas since about 2005 in cash.
    • From 2008 one of the children took over this responsibility. They gifted £250 for birthdays and £1000 for Christmas to each child, by cheque on Mr X’s instructions.
    • From 2010 gifting increased to £250 for birthdays and £1200 for Christmas to each child, by cheque on Mr X’s instructions.
    • From 2011 gifting increased to £500 for birthdays and £1000 for Christmas to each child, by cheque on Mr X’s instructions.
    • From 2012 to 2015 gifting increased to £1000 for birthdays and £2000 for Christmas. Mrs X’s family said that this increase to £3000 per child was related to the maximum allowed gifting threshold.
    • The family said they carried out no gifting in 2016 on the Council’s advice.
    • In 2017 and 2018 all 6 children were gifted £250 after advice from the Council.

The family said that the 6 children had only received 25 % (£103,815) of their parents savings and property, which at 4% each they felt was a reasonable amount of gifting to each child.

  1. The Council replied that:
    • The family had supplied no evidence of this pattern of gifting, which it first mentioned in the letter of October 2019. So, the pattern of gifting had not been a factor in the original decision, as the Council was unaware of this.
    • Mrs X had no capacity to manage her financial affairs from 2009 onwards and so any gifting was done by the children.
    • The proportion of gifting was 55% of Mrs X’s capital, higher than the 30% in a previous LGO report the family referred to. The Council also carried out a full financial assessment.
    • All the gifting and diminishing of Mrs X’s capital occurred in 2009-2016, before Mrs X self funded her care.
    • The Council had taken proper account of all the relevant facts when making its decision, including Mrs X’s right to continue to make gifts.
    • As Mrs X entered residential care in 2009, her future care needs were foreseeable and those responsible for managing her affairs should have ensured that Mrs X’s money was preserved for that purpose.
    • The Council noted that people who have power of attorney should not spend the persons money on gifts to avoid contributing to care home costs.

My analysis

  1. Mrs X’s family complain the Council wrongly decided they deliberately deprived capital with the intention of decreasing liability for care charges.
  2. Mrs X’s family refer to another Ombudsman’s report, 16 006 552, which they have said is similar to their case. They say it is unfair that only 3% of their parents wealth can be gifts to the children.
  3. The report, refers to a different situation, as there was evidence of a gifting pattern for 8 years before the parent went into a care home. The was also fault, as the Council did not carry out a financial assessment. Neither is the case with this complaint, the Council did carry out a financial assessment and there is no evidence of gifting before Mrs X required residential care.
  4. The family say that as their parents gave gifts in cash, they do not have this evidence. They have one bank statement from January 2011 which shows that gifts of £1200 to £1450 were made from their parents account. The family said that one of the children took over this responsibility in 2008.
  5. The family also say the Council has not given consistent information on the level of gifting that it allows. They ask why the Council has not allowed £3000 per child, per year. The Council says there is not a set figure allowable, the figure the family refer to may relate to inheritance tax.
  6. 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 the amount of gifting that can be disregarded.
  7. 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. With regard to the first point, both Mr and Mrs X were in residential care from 2009, so there was a reasonable expectation that they would need care in the future. Mr X was also self funding his care and so there was a reasonable expectation that he would need to contribute towards his care costs.
  2. The Council has said that it has applied a discretionary disregard of 300 pounds per child, per year from 2009 to 2016. This is in line with the £1500 figure mentioned in an email in 2016. The main issue the family complain about is the amount of gifts that are allowable. It is not till October 2019 the family gave a clear history of when gifts were given to the family. So, when the Council made its decision before then it could not take it into account. The family did not mention this gifting in 2016.
  3. In accordance with its policy, the Council referred the matter to the FRG in 2016 and 2019. I can see from the letters sent to the family the FRG considered the law and the families view. I can find no evidence of fault in the decision making process.
  4. Mrs X’s family sent in some new information in October 2019. This was a history of gifting and a 2011 bank statement. I cannot see any evidence the Council has properly considered this new information. Its response to the appeal said that ‘no evidence has been provided to the Council regarding a previous pattern of gifting. The first mention of this is in the letter of October 2019 and is not supported by documentary evidence. The previous pattern of gifting (or any increase in the amounts gifted during 2009-2016) was therefore not a decisive factor in the FRG reaching its decision, as at the time of considering this matter the FRG was not aware of either the previous pattern of gifting or the changes in the gifting amounts over the years’.
  5. The Council’s FRG reached a decision after looking at all the evidence in the financial assessment filled in by the family in 2019. I can find no evidence of fault in this decision, as it took account of all the relevant facts available to it then. Mrs X’s family provided different and new information when making the appeal to that they gave in 2016 and 2019.
  6. There is no evidence the Council has considered the new information. I am not convinced that it should at the appeal stage, as it would need a new financial assessment for proper consideration. And, Mrs X’s family had the opportunity to provide this information in 2016 and in 2019 but did not. The Council has to base its financial assessment on the information given to it by the family in the financial assessment form. So, for this reason I do not find fault in relation to considering the new information. The Council does have the discretion to review its financial assessment if it considers that this new information may change its view. The Ombudsman could not require the Council to do this, as there is no evidence of fault.

Back to top

Final decision

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

Back to top

Investigator's decision on behalf of the Ombudsman

Print this page