Summary: Mr B complained the Council wrongly assessed his mother as having ‘notional capital’ to pay for care following a series of gifts and a property transfer she made between 2014 and 2017. We uphold the complaint, finding the Council has not taken account of relevant matters in its decision. This has caused Mr B distress because of the uncertainty created. The Council accepts these findings and has agreed action to remedy this injustice, including carrying out a review of its decision.

The complaint

1. I have called the complainant ‘Mr B’. He complains on his own behalf and that of his mother ‘Mrs C’. He complains that in assessing whether Mrs C should contribute to the cost of residential care, the Council has wrongly assessed Mrs C as having ‘notional capital’ available to her. In other words, the Council believes Mrs C has intentionally deprived herself of money or other assets to avoid care charges and the Council should include the value of those assets in its financial assessment. This is further to various gifts Mrs C made of money or property between 2014 and 2017.
2. Mr B says as a result the Council is unreasonably expecting Mrs C to pay towards her care based on the value of these assets.

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The Ombudsman’s role and powers

3. We cannot investigate late complaints unless we decide there are good reasons. Late complaints are when someone takes more than 12 months to complain to us about something a council has done. (Local Government Act 1974, sections 26B and 34D, as amended)
4. 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)
5. 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)
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. Before issuing this decision statement I considered:

• Mr B’s written complaint to the Ombudsman and supporting information provided in a telephone conversation;
• information provided by the Council in reply to our enquiries;
• relevant law and guidance as referred to in the text below.

8. I also gave Mr B and the Council chance to comment on a draft decision statement. I took account of any comments made before issuing this final decision.

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What I found

Relevant Law and Guidance

9. Section 14 of the Care Act 2014 allows councils to charge for care and support services they provide or arrange. Charges are means tested based on a person’s financial resources; including any income or capital they have. Capital includes such matters as savings, investments and can include the value of assets such as houses.
10. The Care and Support (Charging and Assessment of Resources) Regulations 2014 say that “an adult is to be treated as possessing capital of which the adult has deprived themselves for the purpose of decreasing the amount they may be liable to pay towards the cost of meeting their needs for care and support, or their needs for support”. In these circumstances the Council is to treat the adult ‘as if’ they still own the income they have deprived themselves of and to treat that as ‘notional capital’.
11. The Government has also produced statutory care and support guidance in support of the above Regulations. Annex E of that guidance discusses “deprivation of assets”. It says a council should refer to the guidance in cases where it suspects somebody has deprived themselves of capital to decrease the amount they are charged for care.
12. The guidance says:

• deprivation may come to light when a council completes a financial assessment with a client. Authorities must “treat this issue with sensitivity and care” (paragraph 3);
• people are entitled to “spend the money they have saved as they wish – it is their money after all” (paragraph 4). So, “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.” (paragraph 5)
• The term ‘deprivation of assets’ refers to when 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 in order to reduce the contribution they are asked to make towards the cost of that care and support” (paragraph 6).
• “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:
1. 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?
2. did the person have a reasonable expectation of needing to contribute to the cost of their eligible care needs?” (paragraph 11)

Chronology of key facts

13. Mrs C first came to the attention of the Council’s adult social care service in April 2012. At that time, her husband, who I will refer to as ‘Mr C’, was still alive but seriously ill in hospital and he passed away the following month. Mr C expressed concern for Mrs C’s welfare. Mrs C was known to suffer from asthma and MS. She was said to be struggling with the stairs and showering in the family home. The Council assessed Mrs C but decided her needs did not meet the threshold where she was entitled to receive social care. It suggested she may benefit from some support with tasks such as shopping and cleaning from a charity and signposted accordingly.
14. In March 2013 Mrs C moved to a flat in a retirement complex. She rented this out, wanting to see if she enjoyed living there. She rented the family home.
15. Sometime during 2014 Mrs C gave Mr B’s brother (who I will call Mr D) £15,000. Mrs C said in 2017 (see below) this was to support Mr D with his business. Mr B has advised Mr D’s business was struggling at the time.
16. In November 2014 Mrs C received some short-term care at home from the Council following a stay in hospital. This ended the following month. She did not have to pay for that care.
17. Around the same time Mrs C received notice that she needed to vacate her rented flat. In January 2015 Mrs C moved to another flat in the retirement complex. This was bought for her by Mr B and his wife, who I will call “Mrs B”, with their savings. Mrs C lived there rent free paying the service charge and for utilities and so on.
18. In July 2015 Mrs C transferred the ownership of the family home to Mr B and Mr D (Mr B says the Council has wrongly recorded this transfer in its records as taking place in November 2015). The Council says this was for a value of £110,000. It has been repeatedly recorded that Mrs C did this in recognition that Mr B and his wife had purchased her retirement flat. Mr B said that he asked the transfer include Mr D also even though he did not contribute funds to the flat purchase.
19. In September 2015 Mrs C had another stay in hospital. The Council did not assess she had any care needs on discharge. It says that it has a record that Mrs C was given a booklet on ‘paying for care’ at this time.
20. In March 2017 Mrs C gifted £12,000 to two daughters of Mr C (Mr B’s half-siblings). She did this after receiving a pension lump sum payable in the name of Mr C. Mr B says this was in accord with Mr C’s wishes before he died.
21. In April 2017 Mrs C then gifted approximately a further £30,000 to Mr B and Mr D and a grand-daughter. This was after an ISA matured. Mr B says the funds given to him and his brother were in recognition of money spent renovating and improving Mrs C’s flat after she moved in. Mr B says he and his brother gave most of this money back to their mother.
22. In April 2017 Mrs C had another stay in hospital. It is recorded in the case notes that she was suffering with COPD (Chronic Obstructive Pulmonary Disease). On discharge she received some care arranged and paid for by the Council. At this point it was envisaged Mrs C would need care at home on a longer term basis.
23. The Council therefore completed a financial assessment to see what Mrs C should contribute towards her care. It was during this assessment the three gifts of money I have referred to above and the house transfer came to light. The financial assessment records that Mrs C gave money to Mr D in 2014 to help with his business. There is no record of her providing or being asked reasons for the other gifts. It is noted on the form that Mr B owned Mrs C’s flat.
24. The Council decided all the gifts above should be treated as ‘notional capital’ and so Mrs C was charged for home care from late May 2017 onward. The Council says Mr B did challenge this decision at the time. When he did so, it says that it asked him to provide a copy of Mr C’s will but that he failed to do so.
25. In July 2018 Mrs C was again admitted to hospital. She was suffering from confusion and hallucinations. Mrs C returned home but the symptoms recurred in September 2018. Mrs C entered residential care around this time, initially on a short-term basis but later as a permanent resident.
26. In November 2018 the Council therefore undertook a second financial assessment. As before the Council identified the three gifts of money and the house transfer described above. It again decided to treat these as notional capital. Additional detail contained in this assessment (which was completed with Mr B as he was now Mrs C’s attorney) refer to Mr B and Mr D supporting Mrs C with improvements and redecoration to her flat.
27. In December 2018 the Council sent a letter confirming the outcome of its financial assessment. It said it had assessed Mrs C as having around £51,000 in notional capital resulting from the three cash gifts explained above and £153,000 in notional capital from the transfer of her house to Mr B and Mr D. The letter said that at the time Mrs C transferred the house, it was unsuitable for her given her health needs, therefore she “would have been aware that [she] may need to make financial provision for future care”. The house valuation was based on information on the website ‘Zoopla’.

Mr B’s complaint

28. Mr B engaged the services of a solicitor to try and challenge the Council’s financial assessment. They complained the Council:

• had put forward no evidence which showed Mrs C had gifted or transferred assets to avoid care fees;
• that all sums gifted or transferred had pre-dated the Council carrying out a financial assessment;
• that most of the sums gifted and the transfer pre-dated a time when Mrs C needed any social care and she had no reasonable expectation of needing residential care;
• that gifts were made to help Mr D with his business at a time of difficulty; to respect the wishes of Mr C or to recognise that Mr B and Mrs B had purchased her flat.

29. In its reply the Council stressed that Government guidance allowed it to consider the timing of a disposal and whether someone had a “reasonable expectation of needing to contribute” towards their care needs when they made a gift. The Council suggested that all the gifts, except that made in 2014, were made “at or around the same time” that Mrs C began needing care and support. The letter set out some details of Mrs C’s engagement with adult social care services since 2012. Also, that Mrs C had received Attendance Allowance for some years. The Council said it would make some adjustment to the notional capital amount to take account that money was spent making Mrs C comfortable in her flat.
30. Mr B’s solicitor asked for copies of the care records the Council referred to in its response. It did not provide these for several months. But by August 2020 the solicitor had received and reviewed the files. It said:

• these did not show Mrs C had a reasonable expectation of needing care and support at the time of making any gifts;
• that Mrs C’s asthma and MS were always mild and a letter dated June 2020 from a health practitioner confirmed this was still the case; Mrs C entered residential care because of a previously unknown mental health illness whose symptoms only presented from July 2018.

31. In November 2020 the Council gave its final reply to the complaint. It said that it believed it had addressed all the issues raised by Mr B and followed ‘due process’ in its decision making. The Council therefore signposted Mr B to this office if he remained dissatisfied.

My findings

Ombudsman’s jurisdiction

32. I note the financial assessment being challenged by Mr B is that completed by the Council in December 2018. More than 12 months elapsed between Mr B receiving that assessment and complaining to the Ombudsman. This makes Mr B’s complaint a late complaint.
33. However, I consider there are special reasons that justify investigation. Within 12 months of the assessment Mr B engaged a solicitor who then raised a complaint on his behalf. Over 12 months passed between the solicitor’s first letter and the Council’s final response. However, I do not find Mr B contributed significantly to that delay. I find the biggest source of delay in the complaint procedure completing was that Mr B and his solicitor were waiting several months for care records. They considered these important as the Council referred to those records in justifying its position. I think it reasonable Mr B would want to read the records before deciding whether to pursue the complaint.
34. I am conscious that only part of the financial assessment in December 2018 was new – that part which related to the transfer of property between Mrs C and Mr B (and Mr D). In its financial assessment in May 2017 the Council decided to treat three cash transfers made by Mrs C between 2014 and 2017 as ‘notional capital’. It took the same approach towards those transfers in its December 2018 assessment. I have considered therefore if Mr B’s complaint about the treatment of the cash transfers should be considered as out of time, leaving this investigation to focus only on the treatment of the house transfer.
35. However, I do not think this would be a fair approach to take. First, because in its correspondence since December 2018 the Council has not sought to draw any such distinction. Indeed, it has implied that it may take a slightly different view of two of the transfers now than it did in May 2017. It would not be appropriate therefore not to investigate the Council’s own reconsideration of this matter.
36. Second, because the assessment has a lasting and ongoing impact in terms of what the Council expects Mrs C to pay towards her care.
37. However, I take the view that any findings made in this case should only apply to the December 2018 assessment. As Mr B only engaged the Council’s complaint procedure further to that assessment and not in response to the May 2017 assessment.

On the substance of the complaint

38. Turning in detail to the December 2018 assessment, I set out above relevant Government guidance which instructs councils on what to do if they believe someone may have deprived themselves of an asset to avoid care charges. I consider the following general statements can be made:

• that identifying there has been the gifting of an asset, regardless of timing, is not enough to show the gift was made to avoid care charges;
• that the Council must be able to show or reasonably infer on the facts there was intent to avoid care charges as a motivating factor behind a gift;
• to reach a decision on this question, the Council can legitimately make enquiries about assets which are disposed of but must do so with sensitivity;
• this means in turn, the Council must consider the reasons put forward for a gift being made; the Council can consider whatever evidence there is to support the reasons put forward;
• it is relevant to consider whether someone had a reasonable expectation of the need for care and support at the time they made a gift;
• also, the Council must consider if the person had a reasonable expectation they may have to pay for such care; as the timing of a gift can be relevant when weighing evidence as to whether there was any intent to avoid care charges.

39. In considering whether the Council made a decision in line with all the guidance above, I note the Council has cited:

• that Mrs C had health problems since 2012 and was known to social care from this time; she was at that time not found to meet the threshold for social care but was having some difficulties managing her home due to health and age-related issues;
• that Mrs C had further discussions with the Council about her health and/or care needs before May 2017; the Council has a record that at least in general terms Mrs C received some information about circumstances where someone may have to pay for care;
• that in the two months before Mrs C was assessed as having social care needs in May 2017 she had gifted over £40,000 in two separate sets of transactions to family members.

40. I also note that nowhere have I seen put forward an explanation for Mrs C’s gift in April 2017 to a grand-daughter.
41. I consider all the factors listed in paragraph 39 and 40 potentially relevant to a decision on whether the Council should treat Mrs C as having notional capital after depriving herself of assets. There is no fault in the Council considering the relevance of these matters.
42. However, I cannot see where the Council has also addressed itself to the following considerations:

• that an explanation has been put forward for why Mrs C gifted £15,000 to Mr D in 2014 for reasons other than to reduce the level of care charges she should pay; that he needed support with his business at the time; this gift was at a time when Mrs C did not have any assessed social care needs; in its complaint response the Council indicated it may no longer consider Mrs C has notional capital as a result of making this gift but I have not seen this clarified or confirmed;
• that an explanation has been put forward for why Mrs C gifted £12,000 to Mr C’s daughters in March 2017 for reasons other than to reduce the level of care charges she should pay; the Council’s decision and complaint replies do not refer to whether it accepts this explanation and if not, why not or what evidence it might need to be persuaded otherwise;
• that an explanation has been put forward for why Mrs C gifted some of the £30,000 in April 2017 to Mr B and Mr D in recognition of money they spent on her flat; the Council’s response to the complaint implies it might now accept some of this explanation but it has not clarified this; nor what difference this makes to its assessment;
• that an explanation has been put forward for why Mrs C gifted her home to Mr B and Mr D for reasons other than to reduce the level of care charges she should pay; Mr B says this was in return for Mr and Mrs B buying her retirement flat; the Council’s decision and complaint response does not refer to whether it accepts this explanation and if not, why not.

43. I consider part of this failure results from the Council not following a sufficiently robust process in gathering information necessary to make an administratively sound decision. It has given the impression of jumping to a conclusion about the money gifted by Mrs C and the transfer of property, without first exploring the transactions individually.
44. The failure to consider the series of relevant factors listed in paragraph 41 means the Council is at fault. The Council cannot pick and choose which facts it finds most convenient in support of its decision. Nor can it pick and choose which parts of the statutory guidance it finds most convenient. The Council must make a robust decision that shows it has properly considered all the facts and all the relevant guidance. It has not done so here.
45. This has caused an injustice. I cannot say whether an administratively sound decision would come to the same outcome, a very different outcome or produce an outcome which may go only slightly to Mrs C’s favour. I reiterate that I do not find the Council has put forward considerations without merit. But it has not balanced those with other relevant considerations. I find significant uncertainty results therefore from the administratively unsound decision taken by the Council. We regard this as a form of distress. I also find this has caused Mr B unnecessary time and trouble in pursuing complaint about this matter.

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Agreed action

46. The Council accepts these findings. To remedy the injustice set out at paragraph 45 it has agreed that within 20 working days of this decision, it will:

• apologise to Mr B accepting the findings of this investigation;
• pay Mr B £250 in recognition of his time and trouble;
• agree to a reassessment of its decision that Mrs C holds ‘notional capital’ in line with the advice set out at paragraph 46 below.

47. The reassessment will be completed by an officer who has had no previous involvement in Mrs C’s case. The Council will aim to complete the assessment within three months, enabling it to ask any relevant questions of Mr B and/or ask for any supporting evidence it thinks might be helpful to its decision. It will make relevant enquiries in writing and ask for replies in writing so there is an audit trail in support of its decision. It will offer Mr B signposting in the event he is dissatisfied with its reassessment. This can include signposting Mr B direct to this office if the Council sees no merit in further consideration of a complaint via its own procedure.
48. In addition, within three months of a decision on this complaint the Council will issue a briefing to all staff who make financial assessments to remind them of the requirements necessary to make a robust decision when it suspects someone has ‘notional capital’ resulting from deprivation. This can be in the form of a written reminder, staff briefing or training as it considers appropriate. The Council will write to us and tell us what action it has taken here.

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Final decision

49. For reasons set out above I uphold this complaint finding fault by the Council causing injustice. The Council accepts this finding and has agreed action I consider will remedy that injustice. I have therefore completed my investigation satisfied with its response.

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Investigator's decision on behalf of the Ombudsman