Summary: Mr X complained the Council wrongly decided his father Mr Y had deprived himself of assets to avoid care costs. There was fault in how the Council considered this, which causes doubt about the outcome of its decision making. The Council agreed to apologise, pay a financial remedy to Mr X and Mr Y for distress, and reconsider its deprivation of assets case for Mr Y. It will also deliver training to its staff about deprivation of assets and ensure its financial assessment appeals process aligns with its published policies.

The complaint

1. Mr X complains the Council wrongly decided his father Mr Y had deprived himself of assets to avoid care costs. Mr Y made monetary gifts to his two children in October 2022, which the Council then included as notional capital in two financial assessments in 2023. Mr X also complains the Council delayed in considering his appeal and complaint about these issues.
2. Because of this, Mr X says:
• his father experienced financial loss because the Council decided he should pay the full cost of his care, and he is now in arrears;
• both Mr X and his father experienced distress; and
• Mr X spent avoidable time and trouble trying to resolve the issues.
3. Mr X wants the Council to carry out its financial assessments again without errors.

Back to top

The Ombudsman’s role and powers

4. 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)
5. We consider whether there was fault in the way an organisation made its decision. If there was no fault in how the organisation made its decision, we cannot question the outcome. (Local Government Act 1974, section 34(3), as amended)
6. 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)

Back to top

How I considered this complaint

7. I considered evidence provided by Mr X and the Council, and relevant law, policy and guidance.
8. Mr X and the Council had an opportunity to comment on my draft decision. I considered any comments before making a final decision.

Back to top

What I found

Legislation and guidance

Charging for care

9. 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.
10. 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. Councils should also have regard to the Care and Support Statutory Guidance.
11. For non-residential care, a council can choose to charge the person following their needs assessment. Where a council has decided to charge for care, it must carry out a financial assessment to decide what a person can afford to pay.
12. For residential care, when a 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. 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 can get council support to meet their eligible needs. People who have over the upper capital limit (currently £23,250) must 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.

Deprivation of assets and gifting

13. Annex E of the Care and Support Statutory Guidance sets out how councils should respond when they suspect someone has deliberately deprived themselves of assets to avoid care and support charges. 
14. The guidance says people should be able to spend the money they have saved as they wish. However, it is also important people pay their fair contribution towards their care and support costs. Councils should ensure people are not rewarded for trying to avoid paying their assessed contribution. Councils must therefore assess a person to decide whether they have intentionally deprived themselves of assets to avoid paying care fees.
15. A person can deprive themselves of capital in many ways, for example by making a lump sum payment to someone else as a gift. Councils should not assume someone has intentionally deprived themselves of assets to reduce their contribution to care fees. The guidance says there may be other valid reasons.
16. In deciding whether the purpose of the deprivation was to avoid care fees, councils should consider:
• whether avoiding the care and support charge was a significant motivation in the timing of the disposal of the asset. At the point the person disposed of the capital, could they have a reasonable expectation of the need for care and support?; and
• whether the person had a reasonable expectation of needing to contribute to the cost of their eligible care needs.
17. If a council decides a person has deprived themselves of assets to avoid paying care fees, it may treat those assets as ‘notional capital’ in its financial assessment, that is, as if they still own the assets.
18. The Office of the Public Guardian (OPG) has issued guidance on gifting. However, this guidance does not apply to people who are still managing their own property and affairs. It only applies where someone lacks the mental capacity to manage their own money and someone is doing this on their behalf.
19. We have produced guidance for practitioners about deprivation of capital which sets out how we investigate complaints about this issue. This says:
• we expect councils to make enquiries before deciding about deprivation of capital, including getting a version of events from the user of services or their representative. The council may also reasonably ask that person to provide supporting evidence for their account;
• councils should ensure they keep a clear record of the factors considered, weight given to evidence provided, and reasons for not accepting a family’s account about the motivation for the disposal; and
• councils need to avoid taking a blanket approach to gifting. Before deciding if someone has made gifts with the intention of avoiding care costs, councils need to consider issues such as:
1. the person’s life expectancy and overall capital when they made the gifts;
2. the size of the gifts relative to their overall capital;
3. the purpose of the gifts; and
4. historic patterns of gifting.

What happened

20. In June 2023, Mr Y received two weeks of reablement care in his home, following discharge from a hospital stay. Reablement care is support in someone’s own home for a limited period to help them regain independence, usually after they have left hospital.
21. After the reablement care, the Council assessed Mr Y’s needs and decided he needed a long-term package of home care. The social worker told Mr Y he would likely need to pay towards the cost of the care, and the cost would depend on his finances and capital. Mr Y told the social worker he had given each of his two children £34,000 in October 2022, so now had around £10,000. Mr Y’s permanent home care package began at the end of June 2023.
22. In August 2023, Mr Y was back in hospital, and the Council asked him to complete and return a financial assessment form. This was completed on Mr Y’s behalf by his son Mr X, and Mr X’s wife. Mr X and his wife said they had completed the form to the best of their knowledge while Mr Y was in hospital. The form asked if Mr Y had given away any money or capital investments to anyone else, and Mr and Mrs X had ticked ‘No’.
23. In October 2023, the Council completed a financial assessment for Mr Y’s home care. It recorded Mr Y had bank savings of around £16,000 and included £68,000 gifted to his children as notional capital in its assessment. The Council wrote to Mr Y with the outcome, and said:
• he would need to pay the full cost of his home care as he had capital and savings over £23,250; and
• it had included the £68,000 as notional capital because Mr Y was “known to social services” when he made the gifts.
24. In November 2023, Mr X contacted the Council and asked it to assess Mr Y’s needs again, as the family now thought Mr Y needed residential care because his needs had increased. The Council assessed Mr Y and told Mr X it would consider a residential care placement for Mr X so would look for care home vacancies. At some stage the Council then completed another financial assessment, this time for residential care. I asked the Council to provide me a copy of this assessment, and it failed to do so. However, it is clear the Council again included £68,000 notional capital in its assessment and decided Mr Y should pay the full cost of his residential care.
25. In December 2023, Mr X appealed against the Council’s financial assessment decisions on Mr Y’s behalf. He said when Mr Y gifted the money in 2022 his health and mobility had been relatively good, he was adamant he wanted to be independent at home, and did not know he would deteriorate and need residential care a year later. At the end of December 2023 Mr Y moved into a residential care home.
26. In February 2024, the Council responded to Mr X’s appeal at Stage 1. It said:
• its ‘Complex Case Appeal Panel’ had decided it was correct to include the notional capital in both financial assessments;
• the Council had received several referrals about Mr Y’s care needs from 2010 to 2022. In June 2022 it had assessed Mr Y and decided he did not have needs for care and support. However, in early-October 2022 it received a referral from Mr Y’s GP asking it to assess his needs again, which said he was already paying for a private carer. Therefore, when he made the gifts later in October 2022, the Council considered he already had a reasonable expectation of needing care;
• the Council had previously carried out a financial assessment for Mr Y in 2010, which found he would pay the full cost of his care because he had capital and savings over £23,250. Therefore, it considered when he made the gifts twelve years later, he had a reasonable expectation of needing to contribute towards the cost of care. It also said the fact he recently had a private carer should have made him aware care is chargeable;
• the timing of the gifts (after the early-October 2022 referral from Mr Y’s GP), led the Council to decide avoiding care costs was a significant motivation in gifting the money; and
• it had considered guidance from the Office of the Public Guardian about gifting and decided it would consider a reasonable gift in this case to be 10% of Mr Y’s capital and savings. Therefore, it would amend its assessment to disregard £7,800 from the £68,000 notional capital as a reasonable gift, leaving £60,200 included as notional capital in the assessment.
27. Mr X then escalated his appeal to Stage 2 the following week, after which he sent email comments and spoke to the Council on the phone. He said:
• Mr X believed the 2010 assessments had related to housing needs, not care needs. Mr Y received reablement care in 2023 following periods in hospital, but this was time limited. In all needs assessments undertaken by the Council before mid-2023, it had decided Mr Y did not have long term care needs. Mr Y’s mobility had only declined to the extent the family felt he needed care and support from mid-2023 onwards. Mid-2023 is the first time the reablement service had suggested Mr Y may need ongoing care following the reablement. The assessments the Council had referred to in 2010 and 2022 did not show Mr Y should have known he would need care;
• Mr Y had not employed a private carer in 2022, or at any other time, so the Council had wrong information. The only support he paid for was a cleaner who carried out domestic cleaning tasks; and
• the purpose of Mr Y’s gift to Mr X had been to help him clear debt.
28. The Council then considered the case at its ‘Special Interest Group’, after which it asked Mr X to provide more details about the debt he had cleared with his father’s money. Mr X told the Council his income was affected during COVID-19, and he had to take a loan of £35,000. He had used the £34,000 gifted from Mr Y to pay off some of the loan and repay other people who had helped him financially during this period. He was still paying off the rest of the loan.
29. Three months later, in May 2024, the Council considered the case again at its Special Interest Group. It recorded the timing of Mr Y’s gifts should be classed as a deprivation of assets to avoid care costs. It also noted it did not know the reason for the gift made to Mr Y’s other child and discussed whether it could speak to them to explore this. In response to my enquiries the Council said it did not have contact details for the other child so did not explore this further.
30. Two months later, in July 2024, the Council responded to Mr X’s appeal at Stage 2. The Council:
• said its ‘Complex Case Appeal Panel’ had reviewed the case and still considered it correct to include the notional capital in both financial assessments;
• referred again to the early-October 2022 referral from Mr Y’s GP, which said he was paying for a private carer. It still considered this to show when he made the gifts later in October 2022, he already had a reasonable expectation of needing care. It said Mr Y’s “mobility had declined to the point that care was requested twice – once in June 2022 and again in October 2022”. It said it considered Mr Y would have known care was needed when he gifted the money, “even if a package of care wasn’t then put in place for several months after due to paying for a private carer”;
• said it still considered the evidence showed Mr Y had a reasonable expectation of needing to contribute towards the cost of care when he made the gifts in October 2022. It referred again to the financial assessment in 2010, and to Mr Y paying for a private carer in 2022 before he made the gifts. It also said Mr Y was awarded attendance allowance (a benefit for people over state pension age who have a disability or health condition severe enough they need someone to help look after them) by the Department of Work and Pensions (DWP) in 2010. However it did not explain how this informed its decision. It also noted it had discussed care charges with Mr Y in January 2023, after he made the gifts;
• said it still considered avoiding care costs was a significant motivation in deciding to gift the money at that time; and
• said it still considered a reasonable gift in this case to be 10% of Mr Y’s capital and savings. Therefore, it would amend its assessment. However, it now said it would disregard a different amount of £6,800 from the £68,000 notional capital as a reasonable gift, leaving £61,200 included as notional capital in the assessment.
31. In August 2024, Mr X complained to the Council about its financial assessment decision. He said the Council had ignored the information he provided in his appeal, including that Mr Y had never paid for a private carer. He also complained about delays in the Council considering his appeal.
32. In October 2024, the Council responded to Mr X’s complaint. It said it accepted it had wrongly considered Mr Y to have had a private carer, when in fact he only had a cleaner, and apologised for this. However, it said when Mr X and his wife completed a financial assessment form for Mr Y in August 2023, they wrongly answered ‘No’ when asked if Mr Y had given away any money or capital investments. The Council said it still considered Mr Y had a reasonable expectation of needing care when he made the gifts because:
• DWP had confirmed Mr Y claimed attendance allowance from October 2020 until he entered residential care in January 2024. (This was different to the Council’s previous assertion that Mr Y received the allowance from 2010); and
• its records showed Mr Y was considering care in June and October 2022, before he made the gifts. Although the Council had not arranged any care at those times, “there was clear information noting the potential for care to be required moving forward”.
33. Mr X then brought his complaint to the Ombudsman.

My findings

Deprivation of assets decision

34. In carrying out a financial assessment of Mr Y, the Council identified he transferred large sums of money at a time when it was in contact with him about his care needs. It was therefore reasonable for the Council to consider whether these payments amounted to a deliberate attempt to avoid care charges.
35. However, as the guidance says, people are free to spend their income and assets as they see fit, including making gifts to friends and family. Councils should not automatically assume a deprivation of assets. There may be valid reasons someone no longer has an asset, and a council should ensure it fully explores the circumstances before drawing conclusions.
36. I decided the Council was at fault. There is not enough evidence the Council properly considered its decision making or fully explored the reasons Mr Y transferred money to his children when he did. I will set out the reasoning for this below.
37. The Council first decided there had been a deprivation of assets when it completed the non-residential financial assessment in October 2023. It then completed a residential financial assessment a month or so later and made the same decision. It did not make enquiries with the family before these decisions, to get a version of events or explore the motivation of the gifts. It also only explained this decision to Mr Y by saying it had included the gift money as notional capital “because you were known to social services at that time”. This explanation was not good enough, or in line with the guidance.
38. It is not clear what evidence the Council considered, or what it discussed, at the Complex Case Appeal Panel before the February 2024 Stage 1 appeal outcome. The Council provided no records of any panel meeting which took place before this email outcome. It should have kept records of this decision making.
39. In the Stage 1 appeal outcome the Council referred to a financial assessment it carried out of Mr Y in 2010, where it recorded he had capital and savings over £23,250. Mr X told the Council in his Stage 2 appeal he thought this assessment related to his father’s housing needs, not care needs. There is no record the Council considered this statement by Mr X or verified it against its records to decide what had happened in 2010 or how much weight it should give to this.
40. In the Stage 1 appeal outcome the Council also mentioned referrals it received about Mr Y in June and October 2022, both of which came from his GP. Following both referrals the Council decided Mr Y did not need care and support to meet his needs. The Council applied significant weight to the fact the October 2022 referral stated Mr Y had a private carer. However, the Council now accepts this was a typographical error and Mr Y did not have a private carer at any point. Mr X raised this in his Stage 2 appeal, but the Council did not properly consider it at the May 2024 Special Interest Group. Instead, it persisted in referring to the private carer as a key rationale of its decision in the Stage 2 appeal outcome.
41. When Mr X complained, the Council decided even without the private carer it was satisfied Mr Y knew he would need care when he made the gifts. It said this was based on the contact with the Council about care needs in June and October 2022, and that he had received attendance allowance. As I will go onto explain, the Council’s reasoning around attendance allowance was not clear. As for the contact in June and October 2022, the Council’s rationale about this was also unclear. The Council said in the complaint outcome the evidence showed Mr Y “was considering care” in June and October 2022. However, the records show referrals came from third parties, and Mr Y’s position was he did not need care. Also, for both these 2022 contacts the Council had agreed with Mr Y’s position; it decided he did not need care and support to meet his needs.
42. In internal correspondence about the complaint, the Council accepted it had repeatedly assessed Mr Y as not needing care and support until mid-2023, some months after he made the gifts. It also accepted it had wrongly considered Mr Y to have a private carer at all previous panel discussions. At this stage the Council should have sent the case back through its full appeal panel process and considered it afresh with proper scrutiny. The Council did not properly consider the errors it had identified in how it considered the appeal and how this may have affected the outcome.
43. The Council did not, at any stage, seek evidence of the gift payments to find out exactly when they took place, or exactly how much they were. The Council placed some weight on a referral it received from Mr Y’s GP in October 2022, but it did not know whether Mr Y made the gift payments before or after this. It also did not know if it had included the correct amount of notional capital in its assessments. In response to our enquiries, the Council still did not have evidence of the exact date or amount of the gift payments.
44. Mr X explained the purpose of his gift was to help him pay debts. At the May 2024 Special Interest Group meeting, which informed the Stage 2 appeal outcome, the group noted Mr X’s reasons. However, it did not clearly record its views about this motivation, and why it did not consider this a sufficient explanation that the intention was not to avoid care charges. It only recorded the timing of the gift was deprivation, but the guidance requires councils to also consider motivation. When the Council reconsidered the case in responding to the complaint, there was still no record it properly considered the motivation of the gift.
45. The Council did not, at any stage, seek to explore the motivation of the gift payment to Mr Y’s other child. It noted at the May 2024 Special Interest Group it did not know the reason for this gift but then did not follow up on this further. I accept Mr X is not on speaking terms with his sibling. However, there is no evidence the Council asked for the sibling’s contact details at any stage, either from Mr X, or from Mr Y who had capacity and was in contact with his other child. It also did not ask Mr Y about the intention of the gift to his other child.
46. The Council mentioned in the Stage 2 appeal outcome, and later complaint outcome, that Mr Y had received attendance allowance. However, it did not properly explain how this was relevant to its decision about deprivation of assets, or how much weight it gave to this. There are many reasons why people are awarded attendance allowance. It does not always follow that someone should have known they would need care and support because they received attendance allowance. If that was the case, a person in receipt of attendance allowance could never dispose of capital, in case they had to pay for care at some unspecified point in the future. This would go against the statement in the guidance that “people with care and support needs are free to spend their income and assets as they see fit, including making gifts to friends and family”. The Council told me it agrees it does not always follow that someone should have known they would need care and support because they received attendance allowance. It says in Mr Y’s case this was not its sole consideration, and it had other reasons for considering he had a reasonable expectation of the need for care and support. However, as I have outlined its records do not make its reasoning clear. It is not clear how much weight it gave the attendance allowance, or how it weighed this against Mr X’ s case that Mr Y had been adamant he wanted to be independent at home until mid-2023. This failure to properly record or explain its decision making was fault.

Reasonable gift

47. After Mr X appealed, the Council said it would disregard some of the notional capital it included in its assessments as a "reasonable gift”. However, I found it did not properly consider or explain its decision about what it would allow as a reasonable gift, as follows.
• Records from the Council’s original financial assessment decisions show no consideration about whether it should disregard any notional capital as a reasonable gift. It is unclear why the Council did not consider this until after Mr X appealed. This causes me to question what the Council’s process is for considering reasonable gift amounts where people do not appeal, and whether it considers this in every case. It should be clearer what the Council’s process is and that it applies it fairly in all cases.
• The February 2024 Stage 1 appeal outcome said the Council would consider a reasonable gift in this case to be 10% of Mr Y’s capital and savings. It said it would disregard £7,800 from the £68,000 notional capital as a reasonable gift. But there is no record of how the Council decided this, because it has no records of the Complex Case Appeal Panel where it says it discussed the Stage 1 decision. It appears the Council intended to disregard 10% of Mr Y’s total capital at the time of the gift. If this is the case, it is not clear where the 10% figure of £7,800 came from. It is not clear how this relates to the original financial assessment, which said Mr Y had total capital of £84,000 (comprising of £68,000 notional capital and around £16,000 savings).
• In the July 2024 Stage 2 appeal outcome, the Council changed its view and said it would disregard a different amount of £6,800 as a reasonable gift, leaving £61,200 included as notional capital. It is not clear from the Council’s records why this amount changed at Stage 2. Notes from its May 2024 Special Interest Group where it discussed the Stage 2 decision only say, “allow reasonable gift of 10%”. This does not explain why the Council considered this to be reasonable in this case. It is also not clear whether the Council intended to allow 10% of Mr Y’s total capital at the time of the gift, or only 10% of the amount he gifted. The figure of £6,800 given at Stage 2 does not align with what it said at Stage 1, or the information it recorded in the original financial assessments.
• During my investigation, the Council then told me it considered a reasonable gift in Mr Y’s case to be £8,400, which was 10% of his total capital at the time of the gift. This aligns with the information in the original financial assessments but contradicts again what it said at both Stage 1 and Stage 2 of the appeal. These contradictions do not give assurance the Council properly considered the amount it should disregard as a reasonable gift.
• I asked the Council how it makes decisions about “reasonable gifts”. It said it uses guidance from the OPG. The OPG guidance does not apply to people who are still managing their own property and affairs. It only applies where someone lacks the mental capacity to manage their own money, and someone is doing this on their behalf. This was not the case for Mr Y. When I queried this, the Council explained it uses the principles of the OPG guidance, that “gifts must always be well within what the person can comfortably afford. ‘Affordable’ varies a lot from person to person”. It appears therefore the Council considers what is a reasonable gift on a case-by-case basis. I would therefore expect it to keep clear records of its considerations in each case. It did not do this in Mr Y’s case.
48. I cannot be assured the Council properly considered its decision about the amount it should allow as a reasonable gift. This was fault.

Unclear appeal process and delays

49. The Council’s charging policies say it has an appeal process for financial assessment decisions, as follows.
• Stage 1 – a manager considers the appeal within 14 working days.
• Stage 2 – the appellant has a further opportunity to provide evidence to support their appeal. The case is then considered at a ‘Complex Case Review Panel’ (CCRP) made up of senior finance managers and representatives from adult social care services. The panel meets twice a month, and the outcome is communicated to the appellant within 14 days of the panel meeting. If an appellant is still unhappy, they can complain via the Council’s complaints procedure.
50. The Council was at fault because it did not follow this process in its consideration of Mr X’s appeal:
• Mr X appealed in December 2023. The Council did not respond at Stage 1 within 14 working days, instead it took two months. This possibly took longer because the Council took this to a panel, when its process says this should be an initial consideration by a manager.
• Mr X escalated his appeal to Stage 2 in February 2024. He then provided further information at the panel’s request. Following this the Council took three months to take the case back to panel, and a further two months to communicate the Stage 2 outcome. This meant the Stage 2 outcome was five months late.
• The Council referred to consideration of Mr X’s appeal by both a ‘Complex Case Appeal Panel’ and a ‘Special Interest Group’. The difference between these two panels is unclear and is not explained by its policy which only refers to a ‘Complex Case Review Panel’. The Council only kept records of the considerations by the Special Interest Group. It is unclear from those records what the job roles are of the attendees and whether this is in line with what its policy says about the membership of the Complex Case Review Panel.

Injustice caused

51. I decided faults by the Council bring into question the outcome of its decision making about deprivation of assets. This caused uncertainty for Mr X and Mr Y, which caused them distress. The Council should consider the case afresh to remedy the injustice caused.
52. Mr X and Mr Y were also caused distress by the Council’s unclear decision process and delays. The Council should remedy this injustice with an apology and financial remedy.

Back to top

Action

53. Within one month of our final decision the Council will:
1. apologise to Mr X and Mr Y for its failure to properly consider and evidence why it considered Mr Y gifted money to avoid care charges. We publish guidance on remedies which sets out our expectations for how organisations should apologise effectively to remedy injustice. The Council should consider this guidance in making its apology;
2. pay Mr X £200 to recognise the distress caused by its unclear decision process and delays; and
3. pay Mr Y £100 to recognise the distress caused by its unclear decision process and delays.
54. Within three months of our final decision the Council will:
1. reconsider its deprivation of assets case for Mr Y. This will include a new financial assessment decision and, if it still decides there has been a deprivation of assets, an opportunity for the full appeal process afresh. The financial assessment and appeal will be considered independently by staff with no prior involvement in the case and will include consideration of any evidence the Council decides it needs from Mr X, Mr Y, or Mr Y's other child. The Council will provide Mr X with a properly reasoned decision, showing what evidence it has considered and the weight given to the evidence, in line with the statutory guidance;
2. repay Mr Y any money resulting from this reconsideration;
3. deliver training to relevant staff about Annex E of the Care and Support Statutory Guidance, and what the Council needs to consider when it suspects someone has deprived themselves of assets to avoid care and support charges; and
4. review its process for appeals against financial assessment decisions to ensure this aligns with its published policies.
55. The Council will provide us with evidence it has complied with the above actions.

Back to top

Decision

56. I find fault causing injustice. The Council agreed to my recommendations for actions it should take to remedy this injustice.

Investigator’s decision on behalf of the Ombudsman

Back to top

Investigator's decision on behalf of the Ombudsman