Summary: Mrs X complained the Council wrongly treated loan monies held in Mrs Y’s savings account as capital when calculating Mrs Y’s contribution towards the cost of her care. The Council required Mrs Y to self-fund her care until she repaid the loan. The Council was not at fault in including the loan as capital in Mrs Y’s financial assessment. However, the Council’s delay in agreeing a personal budget, reimbursing Mrs Y the cost of the care she had already paid and paying for her ongoing care, less her contribution, from 23 March 2023 was fault. This fault caused Mrs X and Mrs Y an injustice.

The complaint

1. The complainant, whom I shall refer to as Mrs X complained the Council wrongly treated loan monies held in her mother, Mrs Y’s savings account as capital when calculating Mrs Y’s contribution towards the cost of her care. The Council required Mrs Y to self-fund her care until she repaid the loan and has not made any payments in respect of Mrs Y’s care since the loan was repaid.
2. This has caused Mrs Y financial difficulties and caused Mrs X significant distress and anxiety.

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The Ombudsman’s role and powers

3. 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)
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. As part of the investigation, I have:
• considered the complaint and the documents provided by Mrs X;
• made enquiries of the Council and considered the comments and documents the Council provided;
• discussed the issues with Mrs X;
• Mrs X and the Council 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

Charging for care

6. A council has a duty to arrange care and support for those with eligible needs, and a power to meet both eligible and non-eligible needs in places other than care homes. A council can choose to charge for non-residential care following a person’s needs assessment. Where it decides to charge, the council must assess a person’s finances to decide what contribution he or she should make towards the cost of their care.
7. When completing these financial assessments the council must follow the Care and Support (Charging and Assessment of Resources) Regulations 2014 and have regard to the Care Act statutory guidance. Schedule 2 of the Regulations sets out the capital that can be disregarded for the purpose of financial assessments.
8. In assessing what a person can afford to contribute a local authority must apply the upper and lower capital limits. The upper capital limit is currently set at £23,250 and the lower capital limit at £14,250. People who have over the upper capital limit are expected to pay the full cost of their care. Once their capital has reduced to less than the upper capital limit, they only have to pay an assessed contribution towards their fees. Any capital below the lower limit should be disregarded.

What happened here

9. When Mrs Y bought her property in a retirement development several years ago she was offered an interest free loan. This would be secured against the property and could be repaid at any time. It only needed to be repaid when the property was sold or within six months Mrs Y’s death. Mrs X says that as Mrs Y had little savings she took out a £30,000 loan to provide a financial buffer should she need it in her later years. She says this £30,000 remained untouched in Mrs Y’s bank account.
10. In early 2023 Mrs Y was admitted to hospital and then discharged to a care home to complete an assessment of her care and support needs. The assessment determined Mrs Y should return home with 24-hour care.
11. Mrs Y returned home on 9 March 2023. Mrs X says she had to source the carers as the Council did not commission this type of service. An agency provided two live-in carers and required Mrs X to provide additional carers to cover 14 hours per week for breaks. Mrs X arranged for seven hours be provided by an independent carer but had difficulty in sourcing a carer for the remaining seven hours. She initially covered these hours herself. The independent carer was then able to increase their hours to 10 per week and Mrs X found another agency to cover the remaining four hours.
12. The Council’s records show Mrs X told the Council the independent carer charged £23 per hour. This was more that the Council’s standard rate and the Council advised Mrs X the balance would have to be paid via a top up. Mrs X has asked the Council to use its discretion to pay the higher rate given the difficulty in sourcing suitable carers.
13. The Council determined Mrs Y had capital over £23,250 and wrote to Mrs X on 21 March 2023 advising her Mrs Y would be responsible for the full cost of her care. Mrs X disputed this as the Council had included the £30,000 loan in Mrs Y’s capital. She asserted the loan was not Mrs Y’s money and had to be repaid.
14. The Council asked Mrs X to provide copies of Mrs Y’s bank statements and loan documents. It also advised Mrs X that repaying the loan now may amount to deprivation of assets. Mrs X provided the requested documents and the Council reviewed the financial assessment.
15. The Council concluded the loan funds had been correctly included as capital within the financial assessment and that Mrs Y would be self-funding her care. It referred Mrs X to its website for further information on what could be considered capital. The Council also advised that if Mrs Y paid back the loan the Council would consider reassessing from the point at which the capital was repaid as this may drop her capital below the upper threshold.
16. Having reviewed the information on the Council’s website Mrs X again questioned the decision to treat the loan as capital. She considered it was clear from the Council’s guidance that savings and investments did not include a loan that had to be repaid.
17. Mrs X also noted the Council had expressly told her not to repay the loan until it had decided whether this would be deprivation of assets. This had delayed matters and Mrs X considered it unreasonable for the Council to suggest Mrs Y was responsible for the full cost of her care until the loan was repaid.
18. A few days later Mrs X confirmed that Mrs Y had repaid the loan and asked for a reassessment of Mrs Y’s finances. The Council confirmed it would arrange a new assessment and backdate this to 23 March 2023 when Mrs X first appealed the financial assessment. The Council also advised Mrs X there would be a charge for Mrs Y’s short placement at the care home and it would contact her with the details.
19. Mrs X believed the financial assessment should be backdated to 9 March 2023, when Mrs Y returned home. She discussed this with an officer and then wrote to the Council setting out her concerns. Mrs X thanked the Council for accepting that the loan should not have been treated as an asset and should have been disregarded from the financial assessment. She disputed the start date of 23 March 2023, and asserted this date was only significant as the Council had not understood the funds were a loan. Mrs X asserted Mrs Y should not have to pay two weeks care charges because the Council had misinterpreted the status of the loan.
20. In response the Council confirmed it had not accepted the loan should be disregarded from the assessment. Rather as the loan had now been paid off, the capital was no longer in Mrs Y’s bank account and would not be taken into account. It confirmed that if the capital in Mrs Y’s bank account had remained above £23,250 she would still have been self-funding her care.
21. Mrs X again challenged this and maintained the Council had disregarded the loan. Had it not done so she asserted the Council would not have allowed them to repay the loan without accusing Mrs Y of depriving herself of assets.
22. The Council responded further advising that the financial assessment were carried out on the basis Mrs Y held capital over £23,250 and she was assessed as self-funding. It said the loan was not disregarded from the assessment. The capital in Mrs Y’s account which had derived from the proceeds of the loan were correctly included in the assessment as capital held by her.
23. It acknowledged that deprivation of capital was discussed as a possibility if the loan was repaid. Its final response was that it would not treat repayment of the loan as deprivation of capital. The Council said it would normally only reassess capital from the date the loan was repaid however to ensure a fair outcome it had decided to back date it to the date of Mrs X’s appeal.
24. It would not back date the assessment to 9 March 2023 as at that point Mrs Y’s capital was above £23,250 as the loan had not been disregarded or repaid.
25. Mrs X continued to dispute the Council’s inclusion of the loan as capital.
26. The Council also wrote to Mrs X in relation to the charges for Mrs Y’s care home placement between 28 February and 16 March 2023. It advised that as Mrs Y had over the funding threshold she was responsible for the full cost and asked Mrs X to arrange payment of £2,987.14.
27. Mrs X challenged this as the social worker had told her Mrs Y would not have to pay anything towards these charges. Although Mrs Y had returned home on 9 March 2023 the social worker wanted to keep her placement at the care home open for a week in case Mrs Y was unhappy at home. Mrs X says this has since been resolved and the Council has accepted it told her Mrs Y would not have to pay for her placement at the care home.
28. Mrs X made a formal complaint about the financial assessment which the Council responded to in early May 2023. It referred to the definition of ‘capital’ in Care Act 2014 and highlighted this included funds held in a bank account. It noted that at the time of the initial assessment Mrs Y had savings over £23,250 as the proceeds of the loan were held in her savings account. Due to the level of her capital she was assessed as needing to self-fund her care.
29. The Council asserted the lifetime mortgage would not be offset against any capital balances held in Mrs Y’s savings account. Mrs Y was not required to repay the borrowing and as such the savings derived from this finance were available to her and correctly assessed within the financial assessment.
30. The Council also referred to the definition of ‘deprivation of assets’ in the Care Act 2014. That is where a person has intentionally deprived or decreased their assets to reduce the amount they are charged towards their care. The Council noted it had suggested Mrs X delay repaying the loan while it sought clarification on the issue as if the Council felt deprivation had occurred it would treat Mrs Y as still having the funds and this may have caused financial problems. The Council concluded it would not treat repaying the loan as deprivation of capital.
31. It considered it had properly assessed Mrs Y as self- funding until the loan was repaid and did not uphold her complaint.
32. Mrs X had also complained about the conduct of the officer who carried out the appeal. She considered they were condescending and rude and felt their manner was bullying. The Council partially upheld this complaint. The Council does not record calls, but it had reviewed the notes of the call and acknowledged it appeared to be a difficult conversation and that their views differed. It apologised that Mrs X felt the officer was rude and condescending and confirmed it would ensure the importance of high standards of customer service were raised regularly with officers.
33. As Mrs X remains dissatisfied with the Council’s response, she has asked the Ombudsman to investigate her concerns. In addition Mrs X says that although the Council agreed to assist in funding Mrs Y’s care from 23 March 2023, it has not made any payments. Mrs Y has used all her savings to pay for this care and has been unable to pay the agency’s last two months’ charges. This has caused Mrs Y financial difficulties and Mrs X significant distress and anxiety.
34. Mrs X is also concerned the Council has yet to confirm whether it will pay the additional cost of employing an independent carer. Mrs X says that despite considerable effort she was unable to source an agency to cover the 14 hours the live in carers required for breaks. She had no alternative but to use the independent carer and would like the Council to pay the higher cost.
35. Due to issues with the live in care service, Mrs Y has recently moved to a care home. Mrs X is concerned that until they can sell Mrs Y’s property she is also unable to pay the care home fees.
36. The Council maintains it was correct to include the loan in Mrs Y’s capital. It notes the Regulations confirm the capital to be taken into account is the whole of the adult’s capital subject to any capital specified in Schedule 2 of the Regulations, which is to be disregarded. There is no regulation which covers this situation and it is not covered by the statutory guidance. The Council asserts it would have been incorrect not to have included the loan as capital in the assessment.
37. In addition the Council notes Mrs Y had two accounts, both showing evidence of withdrawals. It considers it would be difficult to assess which funds were withdrawn/ spent and says there is no evidence the £30,000 loan has remained untouched.
38. The Council says that during the care assessment Mrs Y requested her funding be managed by direct payment. The Council made a backdated payment to Mrs Y’s Direct Payment account on 22 August 2023 for the period 24 March 2023 to 25 August 2023 in the sum of £33,378.06. It has since made further payments for September and October 2023. The Council says Mrs X should now have the required funding to cover her outstanding and ongoing care costs. There is no record Council informed Mrs X it would make the backdated payments to the Direct Payment account or that it notified her when it made these payments.

Analysis

39. Neither the Care Act 2014 nor the 2014 Regulations define capital. The statutory guidance states that capital can mean many different things and that councils will need to consult the regulations and consider the individual asset on its merit. It provides a list of examples of assets which includes any savings held in building society accounts or bank accounts.
40. Mrs X and the Council disagree on whether a loan, generating interest in a bank account can be considered capital for the purposes of financial assessment. Mrs Y’s circumstances are unusual and therefore not directly covered by legislation or guidance. Most loans are taken out with a specific use or purchase in mind, and the funds do not remain in the borrower’s bank account for several years as they did here.
41. Schedule 2 of the Regulations states loans obtained for educational purposes should be disregarded. But it does not state that other types of loans fall into this category and should be disregarded. This suggests the legislative intention was that general loans would be included as capital for financial assessments under the 2014 Regulations. If the intention was to exclude general/ other types of loans this would have been expressly provided for.
42. On this basis we would not criticise the Council for including the loan as capital in Mrs Y’s financial assessment.
43. The Council allowed Mrs Y to repay the loan without treating it as a deprivation of assets. This is an appropriate decision in the circumstances. Although Mrs X would like the Council to back date the assessment to 9 March 2023, it was not required to do so. The Council has exercised discretion to backdate the assessment to 23 March 2023.
44. However I consider that having agreed to backdate the assessment the Council was at fault in not making any payments towards the cost of Mrs Y’s care. Although the Council agreed in April 2023 to backdate the financial assessment to 23 March 2023, it did not agree a personal budget or reimburse Mrs Y the cost of the care she had already paid. Nor did it arrange to pay for her ongoing care, less Mrs Y’s contribution, since that date. Consequently Mrs Y has spent all of her savings on her care and been placed in financial difficulty as she has outstanding invoices with the care agency and no money to pay for her current care home. It has also caused Mrs X unnecessary uncertainty, distress, and anxiety in trying to manage Mrs Y’s finances.
45. I recognise the Council has now made payments to Mrs Y’s Direct Payment account but consider this should have been done much sooner. A delay of five months to make the initial repayment is not acceptable, particularly given the significant sums involved. The Council did not make these payments until the day after it received our initial draft decision.
46. It is also disappointing that the Council did not tell Mrs X it had made these payments to the Direct Payment account or confirm a personal budget. Mrs X says the Council agreed to reimburse Mrs Y by cheque and she chased the Council for this. She says she had no reason to check the Direct Payment account and was unaware until the Council confirmed the position in late September 2023 that the payments had been made.

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Agreed action

47. The Council has agreed to apologise to Mrs X and pay her £500 in recognition of the uncertainty, distress, and anxiety she has experienced because of the fault identified.
48. The Council should take this action within one month of the final decision on this matter and provide us with evidence it has complied with the above actions.

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Final decision

49. The Council’s delay in agreeing a personal budget, reimbursing Mrs Y the cost of the care she had already paid and paying for her ongoing care, less her contribution, from 23 March 2023 is fault. This fault has caused Mrs X and Mrs Y an injustice.

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Investigator's decision on behalf of the Ombudsman