Summary: Mrs X complained about the Council’s handling of her father’s financial assessment in December 2020. There was fault in the way the Council decided that gifts to great grandchildren amounted to a deprivation of assets and it will reconsider that decision. There was also an initial failure to explain its reasons for deciding a payment for renovations amounted to a deprivation of assets, for which it should apologise.

The complaint

1. Mrs X complained about the Council’s handling of the financial assessment for her father, Mr Y, in December 2020. In particular, she said the Council wrongly decided a number of payments from his account amounted to a deprivation of assets, including:
1. a payment to Mr and Mrs X relating to renovations to a property they own;
2. gifts made to two great grandchildren; and
3. the payment of a sum to Mrs X equivalent to the Attendance Allowance Mr Y received.
2. Mrs X also complained the Council cancelled her father’s care package without notice in December 2020.
3. Mrs X said the faults with the financial assessment meant her father had to pay more towards his care than he should have done, she was put to additional time and trouble pursuing the Council to try to resolve this, and she incurred legal costs the Council refused to reimburse her for. She also said the Council’s actions caused avoidable stress.

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The Ombudsman’s role and powers

4. We investigate complaints of injustice caused by ‘maladministration’ and ‘service failure’. 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 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 considered:
• the information provided by Mrs X and her representative;
• information provided by the Council;
• relevant law and guidance, as set out below; and
• our guidance on remedies.
8. Mrs X and the Council had an opportunity to comment on my draft decision and I considered their comments before making a final decision.

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What I found

Relevant law and guidance

Needs assessment and charging for care

9. Councils have a duty to assess the needs of any adult who appears to need care and support. If a council decides a person has eligible needs under the Care Act 2014, it must meet those needs. It will usually set out the support identified to meet those needs in a care and support plan. This will include a personal budget, which is the amount the council estimates is needed to provide the support.
10. The person needing care or their representative can ask the council to pay the budget to them so they can arrange the care they need rather than asking the council to arrange it. This is called “direct payments”.
11. Councils can make charges for care and support services they provide or arrange. They will carry out a financial assessment, in line with the principles in law and guidance, to decide what contribution the person should make towards their care. This will include considering any expenses a person incurs directly relating to any disability they have (“disability related expenditure”). The assessed contribution must not reduce the person’s income below the “minimum income guarantee” (income support plus 25%).

Deprivation of assets

12. The Care and Support Statutory Guidance says where a council considers the person has deliberately deprived themselves of assets to reduce the contribution to their care costs, it can treat them as still having the assets. The amount of those assets is called “notional capital”.
13. Annex E says deprivation should not be assumed. There may be valid reasons for disposing of an asset and the council should fully explore this first.
14. Before deciding there has been a deprivation of assets, councils must consider whether the person, at the time of the disposal of the asset:
• had a reasonable expectation of needing care and support;
• had a reasonable expectation of needing to contribute to the cost of that support; and
• whether avoiding care and support charges was a significant motivation in the timing of the disposal.
15. The Office of the Public Guardian’s (OPG) practice note (PN7) on Giving gifts: a guide to the legal background for deputies and attorneys says, as a general rule, attorneys must not make gifts from the person’s estate, subject to some exceptions. “To count as an exception, the gift must satisfy all three points below. It must be:
1. “given on a customary occasion for making gifts within families or among friends and associates (for example, births, birthdays, weddings or civil partnerships, Christmas, Eid, Diwali, Hanukkah and Chinese new year)”
2. “to someone related or connected to the person or (if not a person) to a charity the person supported or might have supported”
3. “of reasonable value, taking into account the circumstances in each case and, in particular, the size of the person’s estate.”

“If an attorney wishes to make a gift which falls outside these restrictions they must apply to the Court of Protection for approval.”

16. The OPG’s guidance (OPG2) on Giving gifts for someone else, explains how to decide whether a gift is of reasonable value:
• “did the person used to give gifts of this value when they had mental capacity?”
• “would the gift affect the person’s ability to meet their living expenses, now and in the future?”
• “what is the person’s life expectancy – and will they have enough funds for the remainder of their life?”
• “does the gift reflect what the person has said they want to leave people in their will?”
• “Gifts must always be well within what the person can comfortably afford. ‘Affordable’ varies a lot from person to person. A £200 gift has a bigger impact on someone with £9,000 than someone with £90,000.”

Mental capacity

17. A person must be presumed to have capacity to make a decision unless it is established that they lack capacity. If this is in doubt, the council must carry out a mental capacity assessment in line with the Mental Capacity Act 2005.

Lasting Power of Attorney

18. The Mental Capacity Act 2005 introduce the “Lasting Power of Attorney” (LPA), which is a legal document that allows a person to choose one or more persons to be their “attorney” and make decisions on their behalf. To be effective, the attorney must register the LPA with the Office of the Public Guardian.
19. There are two types of LPA:
• Property and Finance LPA – this gives the attorney(s) the power to make decisions about the person's financial and property matters, such as selling a house or managing a bank account.
• Health and Welfare LPA – this gives the attorney(s) the power to make decisions about the person's health and personal welfare, such as day-to-day care, medical treatment, or where they should live.

Background

20. Mr and Mrs Y lived for some years in property A, a property owned by their daughter and her husband, Mr and Mrs X.
21. Mr and Mrs Y both suffered strokes in 2018, following which their health and independence declined.
22. In August 2018, Mr and Mrs X bought a new property, property B, with a view to building an annexe for Mr and Mrs Y to live in. Mr and Mrs Y lived with Mr and Mrs X in the main house from August 2018 until they moved into the completed annexe in January 2019. The building of the annexe was funded by Mr and Mrs X. Mrs X provided care for both her parents from August 2018.
23. Mrs X registered an LPA for Mr Y in December 2018. She and her brother, Mr Z, were named as attorneys.
24. In March 2019, after Mr Y had suffered another stroke, Mrs X asked the Council for support because she was struggling to meet her parents’ needs as a result of their declining health. At that point, she was her parents’ sole carer. The Council assessed the needs of Mr and Mrs Y, following which it arranged a package of care. It completed financial assessments for Mr Y and Mrs Y between July and September 2019.
25. Over time Mr and Mrs Y’s health declined significantly and their care package was adjusted to reflect their increased support needs. In June 2020, the Council decided Mr and Mrs Y needed residential care and identified a care home they could move to that could meet their needs and where they could share a room. Mr and Mrs X declined this because they were concerned about COVID-19 restrictions on visiting. In the circumstances, the Council agreed Mr and Mrs Y should remain at home with changes to their care package.
26. In October 2020, Mrs Y died, following which the Council carried out a further financial assessment for Mr Y. Mrs X had a number of concerns about the financial assessment, some of which were resolved during protracted communications and a two stage complaints process. It decided Mr Y had deprived himself of assets. Mr and Mrs X disputed this and the Council issued its final response in April 2021, following which Mrs X complained to us, with the assistance of her legal representative. Mr Y died in April 2021.

Complaints

27. Mrs X complained the Council wrongly decided that a number of payments amounted to a deprivation of assets. She also disputed a number of other aspects of the financial assessment that are not part of the complaint I am investigating.

a payment to Mr and Mrs X relating to renovations to a property they own

28. For a number of years Mr and Mrs Y lived in property A, which was owned by Mr and Mrs X, before moving to property B in August 2018. Mrs X said they lived in property A rent-free and that it was agreed within the family that after they left, Mr and Mrs Y would contribute towards the costs of renovating property A. Mrs X said there was no written record of this agreement because the family did not foresee the need for this at the time.
29. In March 2019 Mrs X asked the Council for support and it arranged a care package for Mr and Mrs Y. Mrs X told the Council she had an LPA for property and finance, and she handled the financial assessments for both parents on their behalf. As part of the financial assessment, she signed Declaration A, which included the following: “I understand that if I give away any of my assets or sell them for less than they are worth, future applications for assistance with funding may be affected.”
30. Mrs X did not mention the agreement to pay 60% of the renovation costs of property A at that point. She later told the Council she did not think about it at the time.
31. The renovations to property A were carried out in January and February 2020. On 22 April 2020, a payment was made from Mr and Mrs Y’s bank account to Mr and Mrs X for £10,467, which represented 60% of the renovation costs. The Council did not become aware of this until it carried out a financial assessment after Mrs Y’s death in October 2020. It made enquiries about a number of transactions, including this payment. At that stage it treated half of this sum as notional capital for Mr Y because it said the payment, made from Mr and Mrs Y’s joint bank account, amounted to a deprivation of assets.
32. Mrs X disputed this. She said the Council had not considered the fact that her parents lived rent-free in property A for many years, nor the fact she had given up her job to care for them, which she continued to do even after a support package was arranged in March 2019. She also disputed other aspects of the financial assessment and provided further information, including an explanation of the current agreement about rent, and bank statements.
33. The Council considered the information she provided but concluded (in late December 2020) that:

“Given that the verbal agreement to pay 60% of renovations at [property A] was not declared during the original financial assessment, and in the absence of any evidence that this was agreed by [Mr and Mrs Y], [it] had no alternative than to include half the value of the amount paid to [Mrs X] in [Mr Y’s] financial assessment”.

34. This meant Mr Y’s capital exceeded the upper limit of £23,250 and therefore he needed to pay the full cost of his care until his capital fell below that sum, at which point Mrs X could reapply for assistance. It also raised concerns about other large withdrawals. It said it would raise with the Office of the Public Guardian (OPG) its concern that Mr Y’s overall level of expenditure was not sustainable, and the potential conflict between Mrs X’s role as attorney and landlord.
35. Mrs X disputed the payment was a deprivation of assets. She said a 60% contribution to the renovations after many years of living rent free was “not unreasonable”. She said the Council had made an arbitrary decision without discussion or review of the facts.
36. In addition, she argued the Council should taken into account the redecoration of the annexe when Mr Y vacated, given that various adaptations, such as grab rails, had been made that would need removing, and that it should take into account a sum for Mr Y’s funeral costs. She said she could not account for transactions before December 2018 and she felt angry and insulted by the reference to the OPG given all the care she had provided.
37. The Council treated this as a complaint and responded at stage 1 in early March 2021. Amongst other things, it noted that:
• Mr and Mrs Y had both had strokes and suffered declining health by March 2019, following which a care package was arranged.
• Mrs X was aware of the need for care and the need to contribute towards the costs of that care.

In relation to the contribution to the cost of renovations, it said:

• Mrs X made no reference to the agreement to contribute to the renovations during the financial assessment in 2019.
• The renovations were not completed until early 2020, 18 months after Mr and Mrs Y left property A. If the property had been privately rented, they would not have been liable for such costs, and there was no evidence to show they had agreed to this.

It concluded the payment was not reasonable.

38. After further correspondence, the Council again confirmed its position. It acknowledged Mr and Mrs X had funded the building of the annexe but argued this had increased the value of property B.
39. Mrs X’s legal representative complained to us on her behalf. They said the Council:
• had not properly considered the statutory guidance when deciding the disputed payments amounted to a deprivation;
• had not properly reviewed the extensive information Mrs X had provided; and
• had not taken into account the rent free period Mr and Mrs Y benefitted from when they lived in property A, nor the level of care Mrs Y provided from August 2018 onwards.

They said Mrs X had not mentioned the agreement during the 2019 financial assessment because:

• Mrs X was focussing on her caring role, which was becoming overwhelming;
• the money was not due until works were completed; and
• the works had not been costed at that stage.

gifts made to two great grandchildren

40. The Council also decided that gifts of £500 each to two great grandchildren should be treated as a deprivation of assets. It therefore decided Mr Y’s share of those gifts (£500) should be treated as notional capital. It said these gifts were made after Mrs X signed the Declaration in 2019, at a point where her parents were receiving care and she was aware that capital was needed to pay for this.
41. Mrs X said she accepted the Council’s position in early January 2021. However, she remained unhappy and included this in her complaint to the Council in March 2021 and referred to an Ombudsman decision. The Council said in this case the gifts were made after Mrs X signed a declaration that confirmed future gifts would be included in the financial assessment, which made it different from the situation in the Ombudsman decision.
42. In the complaint to us, Mrs X’s legal representative pointed out that section 12(2) of the Mental Capacity Act says attorneys can make gifts, as set out at paragraphs 15 and 16 above. They argued that £500 each (£1,000 in total) was given on the birth of two great grandchildren, which was neither an unreasonable sum, nor an unreasonable gift on such special occasions.

the payment to Mrs X of a sum equivalent to the Attendance Allowance Mr Y received

43. The Council included the Attendance Allowance Mr Y received as income in the financial assessment. The Council said this meant Mr Y could not give this sum to Mrs X and as his expenses exceeded his income such payments were effectively gifts from capital. It therefore concluded those payments (£342.40 per month) amounted to a deprivation of assets. In deciding this, the Council noted Mrs X was receiving a carer’s allowance of £67.25 per week.
44. Mrs X’s legal representative argued, in the complaint to us, that the Council had discretion to disregard the Attendance Allowance because Mr Y was receiving care at home rather than in a care home. It could have taken into account the fact that Mrs X had given up her job to provide care and that she was providing a significant proportion of that care. They argue the Council has not demonstrated that it considered this and has therefore fettered its discretion.

Cancellation of Mr Y’s care package

45. Mrs X’s legal representative said the Council, “without any notice whatsoever, after completing the financial assessment in late 2020, cancelled [Mr Y’s] care package on 30 December 2020”. They argued this was a breach of the Care Act 2014.
46. The Council, in its final complaint response in April 2021, said Mr Y’s care package had not been withdrawn. The outcome of the financial assessment was that Mr Y was able to meet the full cost of the care being provided to him at the time. It accepted this discussion took place on 30 December 2020 but said Mrs X was advised to leave the care in place over the Bank Holiday weekend, whilst she considered whether to appeal the funding decision. It also said that as Mr Y had over £20,000 in his bank account at the time that Mrs X, as his attorney had immediate access to, there was no reason to consider the provision of care would be jeopardised pending the outcome of any appeal submitted.
47. In the event, the care package did not stop so Mr X was not left without care.

Was there fault causing injustice?

48. We are not an appeal body. It is not my role to say whether the Council make the correct decisions. My role is to consider the decision-making process. If there was no fault in the decision-making process, I cannot comment on the decisions reached.
49. When considering whether there was a deprivation of assets the Council was required to consider:
• whether there was a reasonable expectation of care;
• whether there was a reasonable expectation of needing to contribute towards that care; and
• taking into account the timing of the payments, whether reducing the costs of care was a significant motivation.
50. In this case, when the disputed payments were made, Mr and Mrs Y were already receiving care and their health was deteriorating. Mrs X, as their attorney, was aware of the need to contribute towards the costs of care and had participated in a financial assessment. Therefore, the Council was entitled to decide there was a reasonable expectation of care and a reasonable expectation of needing to contribute to the costs of that care.
51. The Council made appropriate enquiries about the disputed transactions and Mrs X provided the information and evidence that she was able to provide.

Renovation costs

52. In respect of the renovation costs, the Council initially decided that because Mrs X had not mentioned this in the 2019 financial assessment, and in the absence of written evidence this payment was agreed by Mr and Mrs Y, it had no alternative than to conclude this was a deprivation. There was no indication it considered whether reducing the costs of care was a significant motivation at that stage and it did not provide detailed reasons for its conclusions about this payment. This was fault. This led to Mrs X’s uncertainty about whether it had properly considered the information she had provided.
53. In its complaint responses in March and April 2021, the Council explained why it considered it was unreasonable to expect Mr and Mrs Y to contribute to the renovation costs. It also explained why the timing of the payment, 9 months after the 2019 financial assessment, was relevant when considering whether the payment amounted to a deprivation.
54. Although there was no written evidence of the agreement, the communications show the Council considered Mrs X’s account of that and it was for the Council to decide how much weight to attach to her account. The Council was entitled to reach its own conclusions about the motivation for the payment, based on all the information it had available to it. Therefore it was open to the Council to decide the payment amounted to a deprivation even though Mrs X disputed this.
55. Its communications also show the Council considered the rent free period in property A and the level of care provided by Mrs X.
56. On balance, although it could have communicated its reasons more clearly, I find the Council has considered all relevant factors and there was no fault in its decision making.

Gifts to great grandchildren

57. The Council asked Mrs X to sign a declaration, which said she understood that making gifts may affect future applications for assistance. However, this does not mean that no gifts can be made. The Council was at fault for not considering the motivation for those payments and the OPG Guidance on gifts before reaching a conclusion about whether they amounted to a deprivation of assets.

Attendance Allowance

58. Councils must take most benefits into account when carrying out a financial assessment. Attendance Allowance is not one of the benefits that must be disregarded. However, councils must also ensure that in addition to the minimum income guarantee, people retain enough of their benefits to pay for things to meet those needs not being met by the council.
59. I have not seen evidence that Mrs X asked the Council to consider a discretionary disregard and I do not consider the circumstances suggest the Council ought to have done so in any event. I note Mrs X was providing at least 35 hours per week of care and was claiming carer’s allowance. The care she provided was on an informal basis. She had not asked the Council about being paid for the hours of care she provided, and it had not formally agreed this with her. Councils will only agree that close relatives are paid for care in exceptional circumstances.
60. Therefore, in these circumstances, the Council was entitled to include the Attendance Allowance as income in the financial assessment. And it was also entitled to treat the payment from capital to Mrs X of a sum equivalent to the Attendance Allowance as a deprivation of assets. It was not at fault.

Cancelling care

61. As a result of the financial assessment, the Council decided Mr Y could meet the full costs of his care. There is a dispute about whether the Council cancelled Mr Y’s care or simply said it would not continue to fund it. Whilst this decision was made in late December, his care did continue and there was no reason for the Council to consider this was a risk, given that there was a significant sum in his bank account that Mrs X had access to. Therefore, although I recognise the timing of the Council’s decision caused stress and anxiety for Mrs X, who had to contact the care provider to ensure the care continued, I do not consider there was a significant injustice that warrants further investigation.

Legal costs incurred

62. Mrs X also complained the Council refused to reimburse her for legal costs of £772.20 incurred in pursuing the complaint with the Council. We would not usually recommend that a Council reimburses a complainant for legal fees, unless the case in question was particularly complex and the complainant could not be expected to pursue a complaint without access to legal advice. That does not appear to be the case here. In addition, we do not expect complainants will need to employ lawyers to assist them to complain to us. In the circumstances, I am not recommending a payment to Mrs X for legal costs.

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Agreed action

63. The Council will, within one month of the date of the final decision:
• apologise to Mrs X for the uncertainty caused by its initial failure to provide detailed reasons for deciding the payment for renovations was a deprivation of assets, and for its failure to properly consider whether the gifts to great grandchildren amounted to a deprivation of assets;
• reconsider its decision about the gifts to great grandchildren and issue a fresh decision to Mrs X explaining the reasons for the conclusion reached; and
• remind staff of the need to consider all three factors set out in the statutory guidance (and OPG guidance on gifts, where relevant) before deciding whether payments amount to a deprivation of assets, ensure they keep a proper record of the reasons for their decision, and provide full reasons to the family.

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Final decision

64. I have completed my investigation. I have found fault leading to personal injustice. I have recommended action to remedy that injustice and prevent recurrence of the fault.

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Investigator's decision on behalf of the Ombudsman