Summary: The Council has not shown how it reached the decision that the significant motivation of the timing of Mrs X’s disposal of her money was to avoid care charges. As it cannot do so, it should not regard her as retaining the notional capital and paying for her own care. It should reconsider how it reached that decision and take the appropriate steps to remedy any injustice.

The complaint

1. Mr A (as I shall call the complainant) says the Council has not properly considered the reason why his mother Mrs X gifted him the sale proceeds of her property when it decided she had deliberately deprived herself of her assets to avoid the cost of care.

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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. 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

4. I considered all the information provided by Mr A and the Council. I spoke to Mr A and to an officer of the Council. Both parties had an opportunity to comment on a draft of this statement and I sought more information before I reached a final decision.

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What I found

Relevant law and guidance

5. The Care and Support Statutory Guidance sets out at Annex E arrangements for how Councils should respond when they suspect that a person has deliberately deprived themselves of assets in order to avoid or decrease the amount they are asked to pay towards any care and support charges.
6. Deprivation of assets means where a person has intentionally deprived or decreased their overall assets in order 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.
7. The guidance says, “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:

(a) 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?

(b) did the person have a reasonable expectation of needing to contribute to the cost of their eligible care needs?

8. For a council to treat someone as possessing notional capital it must therefore have established both that they have:

• deprived themselves of an asset, and
• have done so with the intent of reducing what they have to pay towards the cost of their care and support.

9. If a council decides that a person has deliberately deprived themselves of assets in order to avoid or reduce a charge for care and support, it first needs to decide whether to treat that person as still having the asset for the purposes of the financial assessment and charge them accordingly (ie “notional capital”).
10. When the Council arranges a care home placement, it must follow the regulations when undertaking a financial assessment to decide how much a person has to pay towards the cost of their residential care.
11. The financial limit, known as the ‘upper capital limit’, exists for the purposes of the financial assessment. This sets out at what point a person is entitled to access council support to meet their eligible needs. People who have over the upper capital limit are expected to pay the full cost of their residential care home fees. Once their capital has reduced to less than the upper capital limit, they only have to pay an assessed contribution towards their fees. Where a person’s resources are below the lower capital limit they will not need to contribute to the cost of their care and support from their capital.
12. The Mental Capacity Act 2005 introduced the “Lasting Power of Attorney (LPA)”. An LPA is a legal document, which allows a person (‘the donor’) to choose one or more persons to make decisions for them, when they become unable to do so themselves. The 'attorney' or ‘donee’ is the person chosen to make a decision on the donor’s behalf. Any decision has to be in the donor’s best interests.

What happened

13. In 2020 Mrs X was living independently in sheltered accommodation (to which she had moved in 2018), but still owned her own home. She received some care services from the Council for which she paid a contribution towards the cost. Although she had been reported to have shown signs of some confusion prior to moving into sheltered accommodation, there was no diagnosis of cognitive impairment. Mr A (who lives some distance away) holds power of attorney for both finances and health and welfare for Mrs X.
14. The Council’s financial assessment in 2019 noted that Mrs X’s own home was up for sale.
15. In 2020 Mr A got divorced. Mrs X sold her property in July 2020. The Council’s records include an email from the financial assessments team leader noting that Mr A had just telephoned her to say his mother had sold her house: “Son has confirmed with existing capital and property she has approximately £70,000.

I have told him we will complete the reassessment from the 27/07/2020 and discussed full fee with him”. The Council wrote to Mr A (acting for Mrs X) to say she would now be charged the full cost of her care.

16. Mrs X gave Mr A £68,000 to help buy another property as he was no longer living in the marital home. Mr X says this was paid in several instalments and the last payment was not made to him until September 2021. He says he did not think to inform the Council at the time; Mrs X was paying her care contributions but was living independently in sheltered accommodation and he himself had numerous health problems.
17. By July 2021 Mrs X was reported to be “struggling” by the warden at her accommodation. She was admitted to hospital with an acute kidney injury and discharged home again in August with more support. After a further hospital admission in August it was recommended that she was discharged to a recovery bed for an opportunity for a proper assessment of her needs. A social worker visited her on the ward to discuss moving to a care home for a short period and noted at that time she had “insight” into her needs. Mrs X was discharged into a short-term bed with funding for up to four weeks.
18. A social worker assessed Mrs X in September at the home. The Council’s notes say, “Further assessment of needs completed by social worker. (SW) was concerned about (Mrs X’s) capacity to make decisions about her care and accommodation needs so completed a Mental Capacity Assessment and determined that she lacked capacity to make this decision. Recommendation for dementia residential care placement to be made long term. SW plans a further discussion with the family about this recommendation.”
19. The Council informed Mr A that Mrs X would be funding her own care as she had assets over the threshold.
20. In November Mr A contacted the Council to say Mrs X did not have assets over the threshold amount. He said she had sold her house in 2020 and through solicitors had gifted most of the proceeds to him to help buy his own property. He also asked if the Council could let him have details of less expensive care homes.
21. Mrs X’s social worker emailed Mr A at the end of November and said, “After reading her notes it was clear it is not in your Mum's best interests to move her to a different care home as she is very happy there and has made bonds with staff therefore I think we will just have to wait for the outcome of the investigation by finance/legal to see what the outcomes are but for the moment your Mum is to remain”.
22. The Council also decided to appoint a paid representative for Mrs X once she was assessed as lacking capacity. The social worker emailed Mr A to explain. She said some of Mrs X’s answers to questions about her wishes had been inconsistent during the Best Interests assessment and it was important someone had time to explore her wishes with her properly. She said as Mr A lived a long way away this was difficult for him. She explained his rights of appeal.
23. The outcome of the Best Interest assessment was that Mrs X should remain in that care home.
24. Mr A did not pay the care home fees Mrs X was assessed to pay. The care home served notice on her. The social worker spoke to him and noted, “he said he was going to wait for the 30 days to lapse and then move his Mum to a cheaper care home.” The social worker explained when she had sent him a list of less expensive homes she had not met Mrs X and did not know she lacked capacity, but it was now important for her to remain in familiar surroundings.
25. Mr A told the social worker he ‘simply could not afford’ the cost of the care home and did not understand how it could be justified when his mother could be cared for elsewhere at a much lower rate.

The complaint

26. On 8 November Mr A wrote to the Council. He said Mrs A’s general health throughout 2020, when the money was gifted to him at the time of his divorce, was good: it was not until July 2021 that anyone had raised concerns that she might need long term care. He said it was not a deliberate act to dilute her savings to avoid paying for care.
27. The Council investigated the complaint and responded (after phone calls) in February 2022. The manager who replied upheld the decision made that Mrs X had deprived herself of assets and should pay the full cost of her care. He said, “The gift made to you following the sale of your mother’s property was done at a time when she was in ill health and already receiving support from paid carers in her own home. She was also aware of the need to pay towards the cost of her support having been financially assessed for non-residential services in July 2019, which resulted in her paying a weekly contribution of £28.17.

You also contacted the Financial Assessment team on 29th July 2020 to inform the council your mother’s property had been sold and she had assets in the region of £70,000. Our notes from that contact state you were informed a review of the financial assessment would be required and that your mother would pay the full cost of her support. Our records show you were notified of the full cost re-assessment by letter on 5th August 2020 and all invoices issued to you have been paid in full.”

28. Mr A requested a change of social worker. A different practitioner agreed to accompany Mrs X to Mr A’s preferred choice of care home with him and assess whether it would meet her needs. Following the visit the Best Interests Assessor met Mrs X again. She concluded Mrs X did not want to move to the other home.
29. In March the Council agreed to place Mrs X on a local authority contract rate at the care home rather than a self-funder rate: £639.61 instead of £1045 with effect from 21 September 2021. Mr A agreed to the rate and said he would not pursue a move any further. The Council says although Mr X has paid the local authority rate for Mrs X’s care, the Council has paid the care home the full self-funder fee.
30. Mr A had complained to the Ombudsman before the Council agreed to the reduced rate. He said however that he expected the Council would treat his mother as having reached the lower threshold.
31. The Council says it placed Mrs X on its own commissioned contract with the care home “due to concerns in relation to the behaviour and conduct of her LPA working in their appointed role, and ensuring they acted in her best interests. The non-payment of privately commissioned care home fees by the LPA had led to the provider issuing an eviction notice to (Mrs X) and her LPA to terminate her care home placement.” It says it made the decision as Mrs X was deemed to lack the mental capacity to manage the arrangement and payment of her care home placement herself, in which case without an appropriate LPA she would be the responsibility of the local authority to manage.
32. The Council says it will not regard Mrs X as having reached the lower threshold after the payment of the backdated invoices reduced her assets to below the lower threshold as she has notional capital of over £89,000 as at September 2021. It points to the section of the statutory guidance (Chapter 8 paragraph 28) which says it can treat her as having the notional asset: “the local authority may either charge the person as if they still possessed the asset or, if the asset has been transferred to someone else, seek to recover the lost income from charges from that person.”
33. In respect of Mr A’s argument that his mother was not motivated by the desire to avoid care costs when she gifted him the money to help him purchase a property after his divorce, the Council says “this decision has been made on the basis that £68,000 was gifted following the sale of a property at a time when it looked likely that there would be further care and support required in the near future.”

Analysis

34. The Council is entitled to reach a decision about deprivation if it can show how it has reached that decision on the basis of the test set out in the guidance.
35. The Council has demonstrated that Mrs X was in receipt of care services and knew she would pay full cost for them at the time she gifted the money. But the fact that an individual may have existing care and support needs or know in general terms that they may be expected to pay for care, may not solely be sufficient grounds to demonstrate there was an intent to benefit from deprivation.
36. The Council has not in my view shown how it reached the conclusion that (according to the test in the statutory guidance) “avoiding the care and support charge was a significant motivation in the timing of the disposal of the asset”. At the time of the gift Mrs X was living in sheltered accommodation: it was not until over a year later that she entered long-term care.
37. The timing of the disposal of assets was just before Mr A’s divorce was finalised. The statutory guidance warns against assuming someone has deprived themselves of an asset with the intent of reducing what they should pay towards their care and support. It says there may be valid reasons why someone no longer owns an asset and councils should “fully explore this first”. The Council has not been able to demonstrate why and on what evidence it decided that avoiding care costs was a greater or more significant motivation for Mrs X than helping her son buy another property.
38. I note the Council has effectively subsidised Mrs X’s care since 30 September 2021 by paying the care home the balance of the self-funder rate while Mr X has paid the local authority contracted rate.

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Agreed action

39. Within one month of my final decision the Council should undertake a further assessment of the circumstances;
40. If the Council cannot conclude on the basis of that reassessment that avoiding care costs was a significant motivation in the timing of the disposal of the assets, and show clearly how it reached that decision, it should take steps to remedy the consequent loss to Mrs X as a result of continuing to charge once her available assets fell below the lower threshold (taking into account that the Council has already subsidised Mrs X’s fees since 30 September 2021).

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Final decision

41. I find there was fault on the part of the Council as it failed to show how it reached its decision in accordance with the guidance.

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Investigator's decision on behalf of the Ombudsman