Summary: Mr Y complains about the method used by the Council to calculate the date from which his mother, Mrs Z, would become eligible for funded social care. In our view, there is an error in the Council’s calculations which it should review and apologise for.

The complaint

1. Mr Y complains about the method used by the Council when undertaking a calculation of his mother’s finances to determine the date from which she became eligible for financial support towards the cost of her residential 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 significant injustice, or that could cause injustice to others in the future 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 discussed the complaint with Mr Y and considered the information he provided.
5. I made enquiries of the Council and considered the relevant regulations and statutory guidance about charging for financial care.
6. Mr Y and the Council had an opportunity to comment on my draft decision. I considered any comments received before making this final decision.

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What I found

Charging for residential care

7. The Care Act 2014 (section 14 and 17) provides a legal framework for charging for care and support. It enables a council to decide whether to charge a person when it is arranging to meet their care and support needs, or a carer’s support needs. 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.
8. When the Council arranges a care home placement, it must follow the regulations when undertaking a financial assessment to decide how much a person must pay towards the cost of their residential care.
9. 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.
10. A person with assets above the upper capital limit of £23,250 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 of £14,250 will pay only what they can afford from their income.
11. Annex B of the 'Care and Support Statutory Guidance’ says that, “If a person clearly has capital in excess of the upper capital limit, there is no need to make a wider assessment. If a person is near the upper capital limit, the local authority should be mindful of the need to plan ahead for when assets have been spent down and a person may therefore fall below the upper capital limit”.

Treatment of income

12. Annex C of the statutory guidance sets out the types of income which councils must regard or disregard when undertaking any type of financial assessment for the funding of care and support needs. This says the Council is entitled to include income from certain benefits, including state pension.

Personal expense allowance (PEA)

13. The PEA is the weekly amount that people receiving local authority-arranged care and support in a care home are assumed to need as a minimum for their personal expenses and local authorities must apply this.
14. The PEA is specified in regulations made under section 14(7) of the Care Act 2014 and applies to all people whose care and support in a care home is arranged by a local authority under section 18 or 19 of the Act.
15. It is intended to allow residents to have money for personal use. Based on a financial assessment of their resources, individuals must be left with the full value of their PEA. It is then up to them to determine how they spend it.

The Council’s charging policy

16. When assessing how much a person should pay towards their residential care and support, the Council’s charging policy says it will calculate income minus PEA, housing costs and other disregards to determine their disposable income.

What happened

17. Prior to her admission to hospital in 2023, Mrs Z lived at home with her adult son Mr Y. The house is their primary residence. After her discharge from hospital Mrs Z moved into a residential care home on a short-term basis under a discharge pathway. This meant that Mrs Z did not need to contribute to the cost of her care for the first four weeks.
18. After those four weeks passed, Mrs Z remained in the care home and became liable to pay towards the cost of her care. Mr Y provided some bank statements to the Council which showed that Mrs Z had savings of £31,309 which was £8,059 over the upper capital limit.
19. The Council did a financial assessment based on the information Mr Y provided. It decided to disregard the value of Mrs Z’s home because it is Mr Y’s primary residence. But due to the level of her savings, Mrs Z had to pay for the full cost of her care.
20. The Council completed a ‘Return to Funding’ (FTF) calculation to determine the date from which Mrs Z would become eligible for financial support towards the cost of her care. The calculations provided by the Council shows it considered the following:
• £8059.11 of Mrs Y’s savings above the upper capital limit;
• £28.77 of Mrs Z’s daily income;
• £178.58 daily cost for Mrs Z’s room; and
• £30.17 weekly contribution towards housing costs.
21. From this the Council decided that Mrs Z’s capital would reduce below the upper threshold 54 days after she became eligible to fund the full cost of her care.
22. When the Council presented the calculations to Mr Y, it deducted Mrs Y’s daily income of £28.77 from the room cost to arrive at a ‘daily capital depletion’ of £149.81.
23. Mr Y says this method is incorrect because the Council should not consider Mrs Y’s income.
24. I have considered Mr Y’s argument. In line with the Care and Support (Charging and Assessment of Resources) Regulations 2014, and Annex C of the statutory guidance, the Council was entitled to include Mrs Z’s income to determine the rate of daily capital depletion.
25. However, in my view, there is some fault in the Council’s calculations. When I reviewed the figures, there was a small discrepancy. This appears to be from a failure to include the agreed weekly housing costs of £30.17 when arriving at the rate of daily capital depletion. Although the cost is referred to on the bottom of the Council’s spreadsheet, it does not seem to have been included in the calculations.
26. Although the above inclusion will likely only have a minimal impact on the overall calculations, the failure to include it means that Mrs Z may have waited slightly longer to receive the Council funding she was entitled to.

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Agreed action

27. Within four weeks of my final decision, the Council has agreed to:
• apologise to Mr Y for the time and trouble caused by the error;
• undertake a fresh RTF calculation considering all relevant costs, including the agreed housing costs. The Council should provide a spreadsheet to the Ombudsman showing its calculations. If the Council requires further information from Mr Y, such as bank statements, it should request them as soon as possible and Mr Y should provide them without delay to enable the RTF calculation to take place. If Mr Y does not provide information as requested by the Council, it will not be able to complete the new calculations; and
• adjust Mrs Z’s next invoice to reflect any overpayments she made in 2023. This adjustment is to be made only in the event that the new RTF calculation shows Mrs Z experienced financial detriment.
28. The Council will provide us with evidence it has complied with the above actions.

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Final decision

29. I have completed my investigation with a finding of fault causing injustice for the reasons explained in this statement. The actions listed in the section above will provide an appropriate remedy for the injustice caused by fault.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman