Summary: Mr X complained the Council decided his mother deliberately deprived herself of assets to avoid paying for care charges. Mr X says his mother decided to provide this gift years before knowing she would need care. Mr X also said his mother did not have capacity to decide the gift would be deprivation of assets when she made the gift. Mr X says he has had to settle outstanding care charges with the Council for his mother’s care and these charges continue to accrue. The Ombudsman does not find fault with the Council’s decision.

The complaint

1. Mr X complained the Council decided his mother, Mrs X, deliberately deprived herself of assets by gifting £130,000 to her granddaughter for her education. Mrs X made this gift a year after she went into residential care.
2. Mr X says his mother promised this gift many years before she knew she would need to pay for care. Mr X also says his mother’s dementia at the time of the gift meant she did not have capacity to deliberately deprive herself of funds.
3. Mr X says he has had to pay his mother’s debt to the Council and charges are continuing to accrue due to his mother remaining in care.

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The Ombudsman’s role and powers

4. 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)
5. 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)
6. 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

7. I have considered all the information Mr X provided. I have also asked the Council questions and requested information, and in turn have considered the Council’s response.
8. Mr X provided comments on my draft decision. I considered Mr X’s comments before making my final decision.

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What I found

Financial Assessment

9. The legal framework for charging is set out in sections 14 and 17 of the Care Act 2014. The Council must carry out a financial assessment of what the person can afford to pay and, once complete, it must give a written record of that assessment to the person.
10. A financial assessment is primarily to determine whether a person qualifies for funding towards the cost of their care. A person’s income and capital are considered. Capital includes savings, investments, and property. A person would not qualify for funding it they have more than £23,250 in capital.
11. The council must provide the person, or their family, with sufficient information about the likely costs of their care to ensure they can make an informed decision about their care and how it will be paid for.

Deprivation of assets

12. The care and support statutory guidance says people with care needs are free to spend their income and assets as they see fit. But, it is also important they pay their fair contribution towards their care costs.
13. Where the council decides, after making appropriate enquiries, the person has deliberately tried to avoid paying for their care by depriving themselves of capital or income, it may charge the person as though they still have the capital or income.
14. When deciding whether a person has deliberately deprived themselves of assets the council must consider the guidance in Annex E, which says councils should consider:
1. Whether avoiding care costs was a significant motivation at the time the person disposed of the asset, including whether the person had a reasonable expectation of the need for care and support at that time; and
2. Whether the person had a reasonable expectation of needing to contribute to the cost of their eligible care needs.
15. Annex E says it would be unreasonable to decide that a person had disposed of assets to avoid paying care costs if they were “fit and healthy and could not have foreseen the need for care and support” at the time they disposed of the asset.
16. Annex D says where a person has transferred an asset to a third party to avoid care charges, the third party is liable to pay the local authority. The third party must pay the difference between what it would have charged and what it did charge the person receiving care.

What happened

Events before 2017

17. Mrs X became known to the Council’s Adult Social Care team in March 2016.
18. The Council completed an Adult Needs Assessment in May 2016 and Mrs X spent time in respite care in May 2016 and September 2016.
19. The Council began a financial assessment for Mrs X in October 2016.
20. Mrs X entered hospital in December 2016 following a fall. The hospital discharged her with support from the Independent Living Team. The Independent Living Team referred Mrs X to the Council’s Adult Social Care team shortly after discharge due to concerns for Mrs X.
21. The Council placed Mrs X in a care home in December 2016. Mrs X had capacity when entering the care home and was aware she would need to cover the full cost of her care after the 12-week property disregard period ended. Mrs X’s house was on the market for sale.

Events after 2017

22. The Council told Mr X that when his mother’s 12-week disregard ended she would need to pay the full cost of her care at £480 per week.
23. Mr X declined the Council’s offer of a deferred payment arrangement and confirmed his mother would be responsible for the full cost of care after the 12-week disregard ended. The Council confirmed this on 6 March 2017 with the 12-week disregard due to end of 9 March 2017.
24. Mrs X sold her property in August 2017 for slightly over £130,000. Following sale of the property, Mrs X transferred £130,000 to Mr X.
25. Mr X completed a financial assessment form for Mrs X and sent this to the Council on 16 March 2018. Mr X named himself as the sole financial representative acting on his mother’s behalf. Mr X confirmed sale of the property within the financial assessment form.
26. The Council asked Mr X for copies of Mrs X’s bank statements on 26 April 2018. Mr X provided these bank statements showing transfer of the £130,000 to Mr X. The Council asked Mr X for an explanation of this transfer of funds.
27. Mr X told the Council Mrs X transferred the funds to pay for her granddaughter’s doctorate course.
28. The Council’s Finance Resolution Group considered the transfer of funds. The Council wrote to Mr X on 10 July 2018 saying the gift was excessive, regardless of the reasoning. It also said Mrs X made the gift after she was already receiving residential care services and she should have kept the money for this purpose. The Council said Mr X should return the money to Mrs X. The Council said it would treat the £130,000 as notional capital meaning Mrs X would be responsible for paying her full care fees.
29. Mr X told the Council he had no legal responsibility for his mother’s finances and no control over returning the money. Mr X told the Council the transfer of money was a long-standing agreement between Mrs X and her granddaughter and avoiding care fees was not a motive.
30. The Council asked its Finance Resolution Group to reconsider the matter.
31. The Council visited Mrs X on 18 July 2018 who did not remember the sale of the property or agreement to transfer the funds. Mrs X said Mr X handles her finances. The Council referred the matter for a safeguarding investigation.
32. The Council’s Finance Resolution Group confirmed its stance to Mr X on 26 July 2018 that Mr X should return the funds.
33. Mr X appealed the Finance Resolution Group’s decision on 20 November 2018.
34. The Council’s Finance Resolution Group responded to Mr X’s appeal on 27 November 2018. The Council said it upheld its stance the transfer of £130,000 was a deprivation of assets. The Council said Mrs X, or Mr X, should continue to pay Mrs X’s weekly contribution of £221.63 with the rest accruing as a debt.
35. Mr X tells the Council Mrs X cannot afford the debt and wants assurances he is not legally responsible for it.
36. The Council passed the matter back to its Finance Resolution Group for consideration. The Council also continued its safeguarding investigation. The Council advised Mr X these investigations were continuing in January 2019 and May 2019.
37. The police completed its investigation on 7 October 2019 and found no evidence of fraud or theft.
38. Mr X asked for an update on 13 November 2019. The Council advised that following closure of the police investigation its Finance Resolution Group was considering this matter again.
39. The Council wrote to Mr X to advise its Finance Resolution Group had reconsidered the matter following closure of the safeguarding and police investigations. The Council said the Finance Resolution Group’s decision remained the same because:
• The gift of £130,000 was disproportionately large given the size of Mrs X’s estate.
• Mrs X made the gift when she had a reasonable expectation of needing to contribute to cost of her care needs.
• The Council considered the gift was made with the intention to decrease Mrs X’s assets to reduce the amount the Council would charge for her care.
40. The Council asked Mr X a series of questions about the sale of Mrs X’s house and the transfer of those funds.
41. Mr X advised Mrs X agreed the sale of her property and the agreement with her granddaughter had been longstanding. Mr X advised the Council he would seek legal advice to confirm he is not financially responsible for his mother’s debt.
42. Mr X told the Council he had received legal advice that he was not responsible for his mother’s financial affairs. Mr X asked the Council to stop contacting him on 10 December 2019.
43. The Council told Mr X it considered he was involved in Mrs X’s financial affairs due to him being a signatory on her bank account and the £130,000 being transferred into his bank account.
44. The Council and Mr X continued to liaise over the matter. The Council confirmed the debt owed on 5 February 2020 was £31,728.10 and was increasing by £324.31 per week.
45. Mr X advised the Council he would settle the balance owed by the end of the month. The Council advised this was acceptable and it would bill Mr X quarterly for any future accrual of charges. Mr X settled the £31,728.10 balance owed.
46. Mr X asked if the Council could wait until September 2020 for any future invoices as this is when Mrs X’s granddaughter will enter employment. The Council accepted this request.
47. The Council sent Mr X an invoice for £9,412.88 in September 2020.
48. On 13 September 2020, Mr X told the Council the granddaughter’s studies had been put back three months because of the Covid-19 pandemic and the family was suffering financial hardship. Mr X asked for a further review of the matter.
49. The Council’s Finance Resolution Group reconsidered the matter.
50. The Council provided a response to Mr X’s request for a review on 16 October 2020. The Council:
• Said it upheld its previous decision the transfer of funds was a deprivation of assets.
• Offered Mr X repayment of the charges and debt through an instalment plan.
• Asked Mr X if he wished to provide contact details for the granddaughter as she is responsible for repayment of the money as the recipient.
• Advised Mr X he could approach the Local Government and Social Care Ombudsman if he disagreed with the Council’s decision.
51. Mr X offered to pay £500 per month to Council for the charges owed since February 2020. The Council confirmed it accepted this repayment plan for the debt but advised further debt would continue to accrue.
52. The Council wrote to Mr X on 10 December 2020 to advise the repayment plan would be in the form of a loan agreement and the Council would secure this against his property. Mr X rejected this proposal.
53. Mr X brought his complaint to the Local Government and Social Care Ombudsman.

Analysis

54. Mr X complained about the Council’s decision that Mrs X’s transfer of £130,000 was a deliberate deprivation of assets to avoid care charges.
55. There is no dispute that Mrs X gifted the funds from the sale of her property to Mr X’s bank account. Mr X says he transferred these funds to Mrs X’s granddaughter for her education in accordance with Mrs X’s wishes.
56. The dispute centres over the Council’s decision that Mrs X, or Mr X, transferred the funds to deliberately avoid care costs. The Ombudsman is not an appeal body. My role is to consider the process followed by the Council, whether it followed the guidance and whether there was fault in the way it reached its decision. If it considered the information properly, we cannot find fault just because a person disagrees with the decision.
57. The Council considered all the information available when reaching its decision to treat the transfer of Mrs X’s house sale funds as a deprivation of assets. The Council’s Finance Resolution Group considered the matter on five separate occasions from July 2018 to November 2020.
58. As noted in paragraph 14, the Council needed to consider two questions when deciding if Mrs X (and her family) had deliberately deprived herself of assets to avoid care costs.
59. The Council was able to show that Mrs X (and her family) knew Mrs X would need care and support, within a care home setting, at the time she transferred the house sale funds to Mr X. This was because Mrs X was living in a care home and had been experiencing memory loss and increased frailty before the sale of her home.
60. As part of the first question, a Council must also consider the intention behind transferring the funds. Namely, whether a motivation for transferring the funds was to avoid paying care charges. The Council considered Mr X’s explanation of the intention behind the gift of funds being a pre-existing agreement between Mrs X and her granddaughter. The Council rejected this explanation. The Council concluded that given the timing and size of the gift, the gift was made with the intention to reduce Mrs X’s assets to avoid care charges. This is a decision the Council was entitled to make.
61. The Council was also satisfied that Mrs X (and her family) had a reasonable expectation of needing to contribute to the cost of her care needs before transferring the funds. This is because Mrs X was already living in the care home and was incurring care charges. The Council had also outlined the care charges to Mr X, who declined a deferred payment arrangement and advised Mrs X would be responsible for the cost of her own care.
62. The Council considered the relevant questions in deciding Mrs X’s house sale as a deprivation of assets. The Council was not at fault in how it reached its decision.
63. Mr X was the direct recipient of the transfer of funds from Mrs X’s bank account. As the third-party recipient he is liable for Mrs X’s care charges unless he can evidence he transferred the funds to another third party, such as Mrs X’s granddaughter. I do not find fault with the Council’s decision to hold Mr X responsible for payment of Mrs X’s care charges.

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Final decision

64. I have completed my investigation as there was no fault in the Council’s decision.

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Investigator's decision on behalf of the Ombudsman