Summary: Miss X complained the Council overcharged for her late mother’s care home fees and the costs were unauthorised. She also complained about poor communication. The Council wrongly charged for dementia care, did not explain the Deferred Payment Agreement annual uplift and did not confirm in writing Mrs Y’s care home room rate. The Council was also at fault for a delay in responding to Miss X’s complaint. This caused Miss X distress and time and trouble. The Council has already apologised, refunded the dementia and annual uplift overpayments and refunded the interest paid. This was an appropriate remedy for the injustice caused. The Council is also reviewing its procedures to prevent a reoccurrence of the faults. The Council will provide evidence it has done this.

The complaint

1. Miss X complained on behalf of her late mother, Mrs Y. Miss X complained the Council overcharged for Mrs Y’s care home fees and the costs were unauthorised. Miss X managed Mrs Y’s finances and says the Council’s actions caused her distress and time and trouble to resolve the matter. Miss X also says it caused a delay in settling her mother’s estate. Miss X would like a refund of the money owed.

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The Ombudsman’s role and powers

2. 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)
3. When considering complaints, if there is a conflict of evidence, we make findings based on the balance of probabilities. This means that we will weigh up the available relevant evidence and base our findings on what we think was more likely to have happened.
4. If we are satisfied with an organisation’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

5. I spoke to Miss X about her complaint and considered the information she provided.
6. I considered the Council's comments about the complaint and the supporting documents it provided.
7. I considered the Council's policies and relevant law and guidance and the Ombudsman's guidance on remedies.
8. Miss X and the Council had the opportunity to comment on the draft decision. We considered their comments before making a final decision.

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What I found

Relevant law and guidance

The Care Act 2014 and charging

9. In 2014, the Government introduced the Care Act. This legislation replaced all previous guidance about how councils assess and provide care for adults in need. The charging rules for residential care are set out in the Care and Support (Charging and Assessment of Resources) Regulations 2014 and councils should have regard to the Care and Support Statutory Guidance.
10. The Care Act states councils have discretion to charge people for the care they receive. If a council decides to charge for care, it must complete a financial assessment. People who have over £23,250 of eligible capital have to pay for the full cost of their care fees.
11. Section 8 of the Care and Support Statutory Guidance sets out that the approach to charging for care and support needs should ‘be clear and transparent so people know what they will be charged’.

Deferred payment agreements

12. Deferred payment arrangements (DPAs) are designed to prevent people from being forced to sell their home in their lifetime to pay for their care in a care home.
13. By entering a deferred payment agreement (DPA), the council pays the care home fees and secures a loan against the property. The costs are deferred until the person dies or the property is sold.

Other security

14. In some circumstances, it is not possible for a service user to enter into a DPA. In these cases, councils may accept other forms of security for payment of the care fees. A service user may, for example, have other assets which could be used as security for the debt. A solicitor’s letter of undertaking (LOU) is one such form of security. This differs from the DPA scheme in that a legal charge is not placed on the property. However, the individual agrees to put the property on the market for sale and to keep it on the market until it is sold. The individual’s solicitors give the Council a professional undertaking that the Council will be refunded on the sale of the property.

12-week property disregard

15. In cases where a service user who moves into permanent residential accommodation has a property, the council can apply a ‘12-week property disregard’. This means that, during this 12-week period, the value of the property is not considered when calculating their contribution towards their care. The purpose is to provide a period when they could sell their property and release funds or put other arrangements in place. It will also prevent them from being charged unfairly if the stay turns out to be temporary.
16. At the end of this period, though, the service user’s property is considered when their contribution is calculated.

What happened

17. Mrs Y lived in her own home. Following several hospital admissions Mrs Y was discharged to a community hospital between November 2018 and February 2019. She was then discharged to her own home with a package of care. In early March 2019 Miss X, a Council social worker and NHS physiotherapist expressed concern about Mrs Y’s poor mobility. Between mid-March 2019 and early May 2019 Mrs Y went into a respite care home.
18. In late March 2019 the Council reviewed Mrs Y’s care needs. The assessment noted:
• Mrs Y had capacity to decide on her care and accommodation;
• Mrs Y did not want to return to her own home after her respite stay and wanted to live in long-term residential care; and
• Mrs Y’s property would help fund the long-term residential care.
19. At the start of April 2019 the Council carried out a financial assessment. This confirmed Mrs Y did not have savings of more than £23,250 but she owned her own home.
20. In early April 2019 Miss X identified a long-term care home for Mrs Y. Miss X said the care home manager told her the rate was £950 a week.
21. A Council officer noted they discussed the care home’s fees with Miss X. The officer agreed to speak to the care home about whether they would accept the Council’s rate for the 12-week property disregard period. The officer then spoke to the care home who agreed to this. The officer noted that after twelve weeks the cost would go up to £980 a week. They noted ‘this has been agreed with the daughter also’.
22. The records show the Council officer then spoke to Miss X. They recorded ‘after week 12 a legal charge at £980 is required…Family aware that they need to get this arranged in time to allow further funding to go ahead’.
23. In early May 2019 Mrs Y moved from the respite care home to her long-term care home.
24. In mid-May 2019 the Council sent Miss X a letter which explained:
• Mrs Y’s assessed contribution towards residential care;
• the 12 week property disregard period;
• the funding choices following the 12 week property disregard when Mrs Y would need to pay for her own care; and
• the Council enclosed a deferred payment scheme factsheet.
25. In late May 2019 Mrs Y applied to enter a DPA with the Council.
26. In late June 2019 the Council approved Mrs Y’s DPA application. A week later Miss X emailed the Council to request a change from a DPA to a Letter of Undertaking (LOU).
27. Mrs Y’s care and support plan says between early May and the end of July 2019 Mrs Y had a 12 week property disregard period.
28. In late July 2019 Mrs Y started to pay for her care home fees. In mid-August 2019 Mrs Y’s solicitor signed the LOU and sent it to the Council.
29. Mrs Y lived at the care home until she was admitted to hospital in July 2020. The NHS discharged Mrs Y to an alternative care home until the end of August 2020 when Mrs Y passed away.
30. In May 2021 the Council sent Miss X an invoice setting out the settlement figure for the care charges. Miss X thought the settlement figure was wrong and spoke to the Council. Miss X said the Council assured her it would resolve the settlement figure. Miss X did not want to hold up the sale of Mrs Y’s property. Mrs Y’s house was sold and her solicitor paid the LOU balance to the Council in early May 2021.
31. In mid-May 2021 Miss X complained to the Council. She said:
• it was agreed at the care home pre-assessment the cost of Mrs Y’s room was £950 per week;
• Mrs Y passed away before her property was sold and the outstanding deferred payment debt was paid in full to the Council in early May 2021 by the solicitor;
• the care home invoiced the Council for £1015.38 including a charge for dementia care from late July 2019 to late August 2020. Mrs Y did not suffer from dementia;
• she questioned the care home over the costs but it said a social worker agreed the cost due to the DPA.
• at no time did a social worker seek approval for the inflated costs;
• there was an overpayment of £4242.81 and DPA interest.
32. Miss X said the Council sent an automated reply to her first complaint. Miss X did not receive a further response from the Council and she telephoned the Council about her complaint in late May 2021. The Council told Miss X she would receive a response the next day. She did not receive a response. Miss X telephoned the Council in late June 2021. The Council advised Miss X the Council was dealing with her complaint.
33. In mid-July 2021 Miss X completed a Council online complaint form and attached her first complaint from mid-May 2021. Four days later Miss X complained to the Ombudsman. She complained about Mrs Y’s added fees for dementia care, that the agreed room rate was £950 not £980 and said a social worker approved the extra costs.
34. The law says we cannot normally investigate a complaint unless we are satisfied the council knows about the complaint and has had an opportunity to investigate and reply in full. We therefore asked the Council to consider Miss X’s complaint. The Council confirmed to the Ombudsman it would respond to Miss X by mid-August 2021.
35. The Council emailed Miss X in mid-September 2021 and said she would receive a response by late September 2021, Miss X did not receive a response and telephoned the Council. The Council said it passed her complaint to the legal department. Miss X did not get a response and in mid-November 2021 she complained to the Council’s Chief Executive.
36. The Council sent a response to Miss X’s complaint in mid-December 2021. It said:
• the cost of the placement was £980 a week. It mistakenly charged Mrs Y for dementia care and it apologised;
• the contract between the care home and the Council included an annual uplift from 1 April each year but it did not make this clear in the documentation sent to individuals with DPAs and it did not explain this to Miss X or Mrs Y;
• an urgent review would take place to ensure deferred payment documentation made it clear there was an annual uplift of costs and the amount of annual uplift was communicated to service users and their families each year
• it would refund the overpayment for dementia care, the annual uplift it had applied and, noting the length of time taken to resolve the complaint, it would refund the total interest charged because of the deferred payment. This totalled £2,966.86.
37. Two days later Miss X replied to the Council, she:
• thanked the Council for the breakdown of costs but explained her complaint was also about unacceptable management of Mrs Y’s financial accounts;
• disagreed with the refunded amount due to the bed rate which she said was £950 not £980;
• was unhappy a social worker approved care home fees for DPA’s without approval from herself or Mrs Y; and
• said the Council review should also include ‘no financial contract should be agreed without approval from the self-funder or their Power of Attorney (POA)’.
38. The Council sent a response at the next stage of its complaints procedure in mid-January 2022. The Council response:
• referred to Council records regarding telephone conversations between the Council and Miss X about the care home placement, the 12 week property disregard, that Miss X had chosen a premium room and the agreed cost of the room was £980;
• said a social worker would not have authority to approve expenses of care home fees which was covered by the Council’s scheme of delegated authority. Council records showed approval from a senior manager;
• said it would ask relevant departments to ensure it is clear no financial contract will be agreed without formal approval from the self-funder or POA; and
• confirmed the calculations given in the previous complaint response were correct.
39. Miss X remained unhappy and asked the Ombudsman to consider her complaint.
40. In response to my enquiries the Council said:
• work has started to ensure any person with approved DPA or LOU received a letter telling them of the value of the annual uplift and within the letter the self-funder or representative had the opportunity to agree the uplift prior to being charged;
• in future it would ensure written agreement from the self-funder or POA for financial contracts and this would be added to the person’s records.
• the Council apologised again for the distress caused by not keeping within its complaint timescales.

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My findings

41. The Council carried out the correct needs assessments once Mrs Y was in respite care and helped Mrs Y get a long-term care home placement. The Council also carried out the correct financial assessments and arranged the 12-week property disregard rate with the care home, which was appropriate.

Room rate

42. The records show the agreed room rate between the Council and care home was £980 a week. Miss X said she verbally agreed £950 with the care home. The Council’s records show it telephoned Miss X and advised her of the long-term care home room rate. The Council’s records make no mention at any point of a rate of £950 a week. However, the Council did not set out the agreed room rate in any of its correspondence with Miss X. This was fault and led to Miss X’s confusion over what was agreed.
43. However, Miss X chose the care home and Mrs Y received the care. Even on the balance of probabilities, given the time passed, we cannot know if Miss X would have acted differently had the cost been made explicit at the time. In response to Miss X’s complaint the Council agreed to ensure in future there is written agreement from the self-funder or POA for financial contracts and this will be added to the person’s care notes. This is appropriate to prevent recurrence of the fault.

Deferred Payment Agreement and Letter of Undertaking

44. The Council accepted it did not give Miss X or Mrs Y information about the annual uplift of care home fees. This was fault and caused Miss X confusion when she received the settlement figure in May 2021. The Council has started work to ensure any person with approved DPA or LOU receives a letter telling them of the value of the annual uplift and within the letter the self-funder or representative have the opportunity to agree the uplift prior to being charged. The Council has also already returned funds to Miss X which it had charged Mrs Y for annual uplift costs and refunded all the associated interest. This remedies the injustice caused.

Dementia rate

45. The Council charged Mrs Y a dementia rate which was fault. The Council has apologised and paid back the dementia overpayment. This remedies the injustice caused.

Unauthorised payments

46. The Council did receive agreement for Mrs Y’s care charge fees from a senior manager which was in-line with the Council’s scheme of delegated authority. This was not fault.

Complaint response

47. The Council took seven months to respond to Miss X’s complaint. This was fault and caused Miss X frustration and time and trouble. The Council has already apologised for the distress. In recognition of the impact of the delay the Council also refunded the total interest paid as part of the DPA which amounted to £635.08. This was an appropriate remedy for the injustice caused.

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Agreed action

48. Within three months of the final decision, the Council will provide evidence it has revised its procedures to ensure:
• written agreement from the self-funder or POA for financial contracts and the agreement will be added to the person's care notes; and
• any person with approved DPA or LOU receives a letter advising them of the value of the annual uplift and within the letter the self-funder or representative have the opportunity to agree the uplift prior to being charged.

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Final decision

49. I have completed my investigation. There is evidence of fault by the Council causing injustice which has already been remedied. The Council has agreed to carry out service improvements to prevent reoccurrence of the faults.

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Investigator's decision on behalf of the Ombudsman