Summary: Mrs C says the Council wrongly treated her as having deprived herself of capital to avoid care fees when she had only converted two disregarded life assurance bonds into one disregarded life assurance bond. There is no fault in the Council’s decision making process.

The complaint

1. The complainant, whom I shall refer to as Mrs C, is represented by her son who I will refer to as Mr D. Mrs C complained the Council wrongly treated her as having deprived herself of capital to avoid care fees when she had simply converted two disregarded life assurance bonds into one disregarded life assurance bond.

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The Ombudsman’s role and powers

2. We investigate complaints of injustice caused by ‘maladministration’ and ‘service failure’. I have used the word fault to refer to these. We consider whether there was fault in the way an organisation made its decision. If there was no fault in the decision making, we cannot question the outcome. (Local Government Act 1974, section 34(3), 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. As part of the investigation, I have:
• considered the complaint and Mr D's comments;
• made enquiries of the Council and considered the comments and documents the Council provided.
5. Mrs C, Mr D and the organisation had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.

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What I found

What should have happened

6. The capital limits, specified in regulations issued under the Care Act 2014, set the levels of capital (excluding any capital that has been disregarded) that a person can have while qualifying for financial support from their local authority.
7. A person with assets above the upper capital limit is responsible for the full cost of their care in a care home. A person with assets between the capital limits will pay what they can afford from their income, plus a means-tested contribution from their assets (calculated as £1 per week for every £250 of capital between the capital limits). A person with assets below the lower capital limit will pay only what they can afford from their income.
8. Deprivation of capital is when someone knowingly reduces the value of an asset they hold for financial benefit. Regulations say a council can treat someone as 'possessing capital' if they find that person has 'deprived themselves' of it, 'for the purpose of decreasing the amount they may be liable to pay towards the cost of meeting their needs for care and support' (Care and Support (Charging and Assessment of Resources) Regulations 2014, Regulation 22).
9. For a council to treat someone as possessing notional capital it must be satisfied 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.
10. The Ombudsman issued a publication ‘Deprivation of Capital - guidance for practitioners’ which sets out the approach we expect councils to take when deciding whether a person possesses notional capital following a deprivation of assets. In summary, this says:
• councils should make enquiries and obtain a version of events from the service user or their representatives before making a decision;
• councils should consider if the service user 'must have known that they needed care and support';
• the person must have had a 'reasonable expectation' they may need to pay towards care and support at the time of the deprivation; and
• councils should consider the timing of the asset disposal to help inform a decision about the person's motivation.

What happened

11. Mrs C took out two life assurance bonds in 2000 and 2010. At the time Mrs C did not have any care needs. Mrs C developed dementia in around 2013.
12. In 2015 Mrs C and her family took financial advice about the performance of the two life assurance bonds. The advice included the following:
• ‘we also discussed the position with your mother’s capital as it may be assessed by the local authority, should she need to have nursing care. Certain capital assets must be disregarded; this includes the surrender value of any life insurance policy.’
13. Mrs C decided to surrender the original two bonds and purchase a new life assurance bond.
14. By 2017 Mrs C’s health had deteriorated and she moved into a care home. Mrs C therefore sold her property and used the funds from that house sale to fund her care needs.
15. In 2021 Mrs C’s family approached the Council for support with funding as Mrs C’s capital had fallen below the capital limit. The Council’s complex needs panel considered the case, including the information Mr D had provided about the bond purchased in 2015 and the two previous bonds Mrs C held. The panel decided Mrs C had deprived herself of capital as she had care needs when she purchased the new bond in 2015 and had received financial advice about the type of investments which were disregarded in financial assessments for care.
16. Mr D has challenged the Council’s decision and pointed out Mrs C simply transferred two disregarded bonds into one disregarded bond in 2015. The Council’s complex case panel has considered Mr D’s concerns at panel meetings in January, February and July 2022 and in February 2023. Each time the panel has upheld the original decision to treat the money invested in the 2015 bond as deprivation of capital. That is because the panel was satisfied when the funds were invested in the 2015 bond Mrs C had care and support needs and could have chosen to invest the money in bonds which were not disregarded for financial assessment purposes but instead chose to use a bond she had been advised was disregarded for financial assessment purposes.

Analysis

17. Mr D says the Council should not have treated Mrs C as having deprived herself of capital to avoid care fees when she consolidated her investments into one life assurance bond in 2017. Mr D says all Mrs C did at that point was to move one disregarded investment into another disregarded investment and therefore it cannot have been to avoid paying care fees, as the Council has decided.
18. It is not for the Ombudsman to decide whether the Council should have treated the amount in Mrs C's bond as deprivation of capital. Rather, the Ombudsman's role is to consider whether the Council, in reaching its decision, has done so properly and after considering the evidence.
19. In this case I am satisfied the Council presented the case to its complex care panel on several occasions since 2021. I am satisfied at each panel meeting the panel considered the information provided by Mr D and the arguments he put forward, as well as the evidence on the reinvestment of Mrs C's money in a new bond in 2015. I therefore could not say the Council's decision to treat the amount invested in the bonds was affected by fault. I say that because, in reaching its decision I am satisfied the Council considered all the evidence, including:
• Mr D's arguments;
• the status of the original investments which Mrs C purchased when she did not have care needs;
• the documentary evidence showing the financial advice given in 2015; and
• the fact Mrs C had care needs at the time she purchased the new bond in 2015.
20. In those circumstances I could not say the Council failed to consider the case properly. I am satisfied the Council knew the bond purchased in 2015 was as a result of Mrs C closing two previous bonds which would have been disregarded for the financial assessment. Nevertheless, taking into account the fact Mrs C had care needs at the time the 2015 bond was purchased and as she had been given financial advice which included advice about the type of investment disregarded in any means test for care services the Council was satisfied part of the motivation for choosing a life assured bond was to avoid paying care fees. As the Council has reached that decision properly after considering the evidence it is a decision it is entitled to reach, albeit it is a decision Mr D strongly disagrees with. It is not, however, a decision the Ombudsman could comment on given there is no evidence of fault in how that decision was reached.
21. In reaching that decision I understand Mr D's concern given that from his point of view the funds were simply reinvested from one disregarded asset into another. However, I am satisfied the Council has considered those matters when reaching its decision to treat the investment in the bond in 2015 as deprivation of capital. The Council's view is that as Mrs C knew she had care needs in 2015 when the money was reinvested, as she had received financial advice which included advice about the type of investments that could be disregarded in a means test for a care assessment and as she could have chosen to invest those funds in a non-disregarded asset she did so partly to avoid paying care fees. As I have made clear, that is not a decision I could criticise given it was not affected by fault.

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Final decision

22. I have completed my investigation and do not uphold the complaint.

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Investigator's decision on behalf of the Ombudsman