Summary: Mrs X complained about the Council’s financial assessment of her late mother, Mrs Y. She said it did not properly consider the £25,000 gift she gave Mrs X and wrongly decided she had done this to avoid paying for care. Mrs X would like the Council to reconsider its decision. We found the Council was not at fault in the way it considered Mrs Y’s finances or in the way it dealt with Mrs X’s complaint about this.

The complaint

1. The complainant, whom I shall refer to as Mrs X, complains on behalf of her late mother, Mrs Y. Mrs X says the Council:
• did not properly consider whether Mrs Y had deliberately deprived herself of assets for the purpose of avoiding paying for her care.
• did not properly consider her complaint about this.
2. Mrs X would like the Council to reconsider its decision to include the gifted amount in Mrs Y’s financial assessment, taking into account the points she raised. She says these demonstrate that Mrs Y did not intend to deprive herself of assets to avoid paying for her care and the gifted amount should not be included.

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The Ombudsman’s role and powers

3. 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)
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)
5. 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.

6. (Local Government Act 1974, section 26A(2), as amended)
7. We are satisfied that Mrs X is a suitable person to complain on Mrs Y’s behalf.

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How I considered this complaint

8. I considered information from the Complainant and from the Council.
9. I sent both parties a copy of my draft decision for comment and took account of the comments I received in response.

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What I found

Background

Charging

10. 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.
11. 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.
12. The council must assess the means of people who have less than the upper capital limit, to decide how much they can contribute towards the cost of the care home fees.
13. People with care and support needs are free to spend their income and assets as they see fit, including making gifts to friends and family. This is important for promoting their wellbeing and enabling them to live fulfilling and independent lives. However, it is also important that people pay their fair contribution towards their care and support costs.
14. The guidance says deprivation of assets is where a person has deliberately deprived themselves of assets to reduce the amount they are charged for their care. It is up to the person to prove to the local authority that they no longer have the asset. If they are not able to, the local authority must assess them as if they still had the asset. A person can deprive themselves of capital in many ways, but common approaches may be:
1. a lump-sum payment to someone else, for example as a gift
2. substantial expenditure has been incurred suddenly and is out of character with previous spending
3. the title deeds of a property have been transferred to someone else
4. assets have been put into a trust that cannot be revoked
5. assets have been converted into another form that would be subject to a disregard under the financial assessment, for example personal possessions
6. assets have been reduced by living extravagantly, for example gambling
7. assets have been used to purchase an investment bond with life insurance
15. However, this will not be deliberate in all cases. Deprivation should only therefore be considered where the person no longer owns assets that would have otherwise been included in the financial assessment or has turned the asset into one that is now disregarded.
16. A local authority should therefore consider the following before deciding whether deprivation for the purpose of avoiding care and support charges has occurred:
• Whether avoiding the care and support charge was a significant motivation;
• 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?
• Did the person have a reasonable expectation of needing to contribute to the cost of their eligible care needs?
17. Where the Council has decided there has been deprivation it should seek to charge the person as if the deprivation has not occurred. This means assuming they still own the asset and treating it as notional capital.

What happened

18. In early 2016, Mrs X advised the Council that Mrs Y had moved into a care home. She said she had begun to feel isolated at home and understood the costs and benefits of moving into the home. She also said Mrs Y had the mental capacity to decide about this and was going to give Mrs X powers of attorney. Mrs X was going to manage her finances. The Council offered to assess Mrs Y’s care and support needs and finances. It also discussed the implication of Mrs Y having to move if she needed funding from the Council in future as the fees were £740 per week. Mrs X declined the assessments and Mrs Y paid the fees privately. The Council spoke to the Care Provider and confirmed that Mrs Y had the mental capacity to decide about this and that it was her choice to do so. The Council wrote to Mrs Y sending a guide to entering a care home, information on its deferred payment scheme, and a care home directory. The guide included information about needs assessments, council funding, contributing towards the cost of care, also third party top ups and deprivation of assets. Mrs X says she never saw this.
19. A few months later, Mrs Y sold her property for over £128,000 and Mrs X transferred £25,000 to her own account. At the time of this transfer, Mrs X was not attorney but did have arrangements in place to manage Mrs Y’s money, with Mrs Y’s consent. She says Mrs Y wanted to help her as she was in financial difficulties and told her to transfer the money. However, because Mrs X was authorised to deal with Mrs Y’s finances, there is no evidence that she authorised this specific transaction.
20. In mid 2016, Mrs X registered her lasting power of attorney for Mrs Y.
21. In January 2019, Mrs X contacted the Council to ask for help with funding Mrs Y’s care home fees as she only had enough money to pay for two months. The Council visited to assess Mrs Y’s care needs and, subsequently, her finances. It explained that Mrs X needed to consider moving Mrs Y to a cheaper home, but she said she wanted Mrs Y to stay where she was. By June, Mrs Y’s care home fees were £875 weekly. The Council wrote to Mrs Y to confirm it would help with funding from the beginning of December. It said until then, Mrs Y was responsible for the full cost of the fees. This was because it considered Mrs Y had paid £25,000 to Mrs X to avoid paying care costs so treated her as if she still had the money. Mrs X disputed this and said Mrs Y did not think about avoiding care costs but wanted to help Mrs X with her financial difficulties.
22. In July, a social worker from the Council’s safeguarding team visited Mrs Y; Mrs X was also present. The meeting was to clarify how Mrs X was to pay the fees, which she had been paying from Mrs Y’s funds, and the debt of £10,500 now due to the care provider. The social worker told Mrs X she needed to witness her telling Mrs Y that she would soon be unable to afford to live in the care home, which Mrs X did. The social worker advised Mrs X she needed to look at all care homes in the area as Mrs Y could not afford the fees. The social worker spoke to Mrs X privately to confirm she could afford to pay £250 weekly which she would need to pay when the Council took over funding. The social worker noted Mrs Y was aware that £40,000 had not been accounted for and the fees had not been paid for the last two months. The finance team calculated that Mrs Y should have over £4,000 in her account, but Mrs X said Mrs Y had no money.
23. Mrs X’s legal representative wrote to the Council and said Mrs X wished to appeal its decision that Mrs Y had deprived herself of the £25,000 to avoid paying care costs. It said Mrs X had discussed her own financial situation with Mrs Y when she was at risk of losing her home due to debts she had incurred. Mrs X was paying several debts at a nominal sum monthly with the help of a charitable organisation. The legal representative said Mrs Y had offered to help Mrs X and transferred £25,000 to her bank account. This was enough to pay all the outstanding debts with some left over which, Mrs X said, Mrs Y told her to use for a holiday. It also said at the time of the gift, Mrs Y had enough money to pay for her care for another three years and did not think she would be alive much longer as her health was poor. It sent a list of payments made, including for the holiday, totalling £23,000.
24. At the beginning of August, the Council wrote to Mrs X’s legal representative in response to its letter asking for a review of its decision. It set out how it had done this. It said Mrs Y had not any notable ill health when she moved to the care home and was described as “quite independent”. She clearly knew she had care and support needs as she was already in a residential care setting. The Council took the view that Mrs X’s financial situation was not as pressing as suggested because she was already slowly paying her debts by arrangement. The Council said Mrs X had also transferred a total of £67,000 to her own account between September 2016 and August 2017, but she did not mention this. Mrs X paid £2,400 into Mrs Y’s account each month to pay the money back. It believed the difference between what Mrs Y should have and what she had was almost £40,000. In addition to this, Mrs Y had a significant debt to the care provider and was at risk of eviction from the home. It said Mrs Y had capacity to deal with her finances but did not know about the gifting when asked, as she said Mrs X had responsibility for her finances. Mrs X disputes this and says Mrs Y did confirm it. The Council upheld its original decision to include the £25,000 in Mrs Y’s financial assessment and said Mrs Y would need to pay the full cost until December 2019.
25. The Council contacted Mrs X and she confirmed she had continued to use Mrs Y’s income to pay the full weekly fee. The Council arranged to send Mrs X information to help her find another care home and gave her details of an officer that would help her do that. Just over a week later, Mrs Y sadly died.
26. In February 2020, Mrs X’s legal representative wrote to the Council asking it to consider the matter at stage two of the review and appeals process. It said Mrs X disputed that Mrs Y had not known about the gifting and that she had confirmed it during the meeting with the social worker in July 2019.
27. In March the Council wrote to Mrs X to advise that the appeal panel had advised that it had not upheld the appeal.

Was there fault which caused injustice?

28. It is not my role to decide whether Mrs Y deliberately deprived herself of assets for the purpose of avoiding paying for her care. My role is to consider whether the Council made its decision about this properly and I am satisfied it did this.
29. The issues it had to consider were:
• Whether avoiding the care and support charge was a significant motivation.
• 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?
• Did the person have a reasonable expectation of needing to contribute to the cost of their eligible care needs?
30. Mrs Y had handed over control of her finances to Mrs X, so Mrs X was making decisions about this on Mrs Y’s behalf. Mrs Y was already in a care home when the £25,000 was transferred to Mrs X, so she had a reasonable expectation of the need for care and support. Both Mrs X and Mrs Y knew Mrs Y would need to contribute to the cost of her care once her funds dropped below the threshold. The only remaining consideration is the motivation. The Council considered this and concluded that avoiding care and support charges was a significant motivation for the transfer of monies from Mrs Y to Mrs X.
31. I also found no fault in the way the Council dealt with her complaint about this.

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Final decision

32. I have completed my investigation and do not uphold Mrs X’s complaint that the Council:
• did not properly consider whether Mrs Y had deliberately deprived herself of assets for the purpose of avoiding paying for her care.
• did not properly consider her complaint about this.

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Investigator's decision on behalf of the Ombudsman