Summary: Mrs Y complained about the Council’s charging under a Deferred Payment Agreement for the residential care service for her mother. We found fault with the Council in not providing enough information about Deferred Payment Agreements and in the way it calculated care charges. The Council’s fault caused injustice to Mrs Y. The Council has already offered suitable personal remedies and has carried out some service improvements. The Council has agreed to continue improving its services by ensuring more comprehensive information is available for people considering Deferred Payment Agreements.

The complaint

1. Mrs Y complains about the Council’s calculations of care charges for her mother (Mrs X) under a Deferred Payment Agreement (DPA). Mrs Y says the Council:

• failed to follow the relevant legislation when completing equity valuation of a jointly owned property;
• provided unclear and misleading information on its website;
• kept sending confusing and inconsistent correspondence;
• failed to advise on ring fencing of allowances.

2. Mrs Y says the Council’s failings meant her mother had to pay for a professional valuation of the property with 50% of her share. She also was left with no cash savings for any necessary expenses and her share of the property maintenance. Mrs Y spent much time analysing the information provided by the Council. The Council’s failings caused her 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 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)
4. We cannot investigate late complaints unless we decide there are good reasons. Late complaints are when someone takes more than 12 months to complain to us about something a council has done. (Local Government Act 1974, sections 26B and 34D, as amended)
5. When considering complaints we make findings based on the balance of probabilities. This means that we look at the available relevant evidence and decide what was more likely to have happened.
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)

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What I have and have not investigated

7. As suggested in paragraph four of this decision we would normally investigate anything that happened within 12 months from the date the complainant had learnt of the matters alleged in the complaint. Usually it would be the date the complainant came to us.
8. Mrs Y came to us in October 2024. Mrs Y said that, although she had signed a DPA with the Council in 2021, only recently she realised the Council’s failure to provide her with the relevant information at the time had negatively affected her decision. As Mrs Y came to us within 12 months of the date she learnt about the Council’s actions complained about, I have decided to investigate the issue of information given to Mrs Y when signing a DPA on behalf of her mother. I have not investigated any other matters from before October 2023. If Mrs Y was unhappy about anything else, she should have complained earlier.

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How I considered this complaint

9. I considered evidence provided by Mrs Y and the Council as well as relevant law, policy and guidance. In my decision I refer to the Care and Support Statutory Guidance as “the Statutory Guidance”.
10. Mrs Y 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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Legal and administrative framework

Property valuation

11. A local authority will need to work out what value a capital asset has in order to take account of it in the financial assessment. Other than National Savings Certificates, valuation must be the current market or surrender value of the capital asset, for example, property, whichever is higher, minus 10% if costs of sale and mortgage. (Care and Support Statutory Guidance, Annex B paragraph 14)
12. Where the value of a property is disputed, the aim should be to resolve this as quickly as possible. Local authorities should try to obtain an independent valuation of the person’s beneficial share of the property within the 12-week disregard period where a person is in a care home. This will enable local authorities to work out what charges a person should pay and enable the person, or their representative, to consider whether to seek a deferred payment agreement. (Care and Support Statutory Guidance, Annex B paragraph 18)

Deferred payment agreement

13. Councils must cease deferring further costs when person has reached the “equity limit”. (Care and Support Statutory Guidance, paragraph 9.22)
14. If secured by property, equity limit is value of property minus 10% minus £14,250 minus any encumbrances. (Care and Support Statutory Guidance, paragraph 9.42)

Personal expenses allowance

15. The local authority must leave the person with a minimum amount of income. This is known as the Personal Expenses Allowance (PEA) and the amount is set out in regulations and updates sent via a local authority circular. Anything above this may be taken into account in determining charges. (Care and Support Statutory Guidance, Annex C paragraph 43)
16. The PEA is not a benefit but the amount of a person’s own income that they must be left with after charges have been deducted. However, where a person has no income, the local authority is not responsible for providing one. However, the local authority should support the person to access any relevant state benefits or independent advocacy service. (Care and Support Statutory Guidance, Annex C paragraph 44)

Disposable income allowance

17. The disposable income allowance (DIA) is a fixed amount (up to £144 per week) of a person’s income which the local authority must allow the person to retain (if the person wants to retain it). The local authority can require the person to contribute the rest of their income, but must allow the person to retain as much of their disposable income allowance as they want to. (Care and Support Statutory Guidance, paragraph 9.48)
18. A person may choose to keep less of their income than the disposable income allowance. This might be advantageous to the person as they would be contributing more to the costs of their care from their income and consequently reducing the amount they are deferring (and accruing less debt to their local authority overall). However this must be entirely at the individual’s decision and the local authority must not compel someone to retain less than the disposable income allowance if the person wants to retain the full amount. (Care and Support Statutory Guidance, paragraph 9.49)

Information and advice

19. Under the Care Act, local authorities have responsibilities to provide information and advice about people’s care and support. These extend to deferred payment schemes as well. (Care and Support Statutory Guidance, paragraph 9.23)
20. If a local authority identifies someone who may benefit from or be eligible for a DPA or a person approaches them for information, the local authority must tell them about the DPA scheme and how it works. Paragraphs 9.30 of the Care and Support Guidance lists what the Council should include in its advice as a minimum, including the suggestion of obtaining independent financial advice.

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What I found

What happened

21. In August 2021 the Council sent Mrs Y a DPA information letter. The Council explained the funding details of Mrs X’s residential care from the second week of December 2020. The letter stated that Mrs Y should seek independent financial advice if she considered applying for a DPA on behalf of her mother, who owned 50% of the property. It also referred Mrs Y to the information on the Council’s website.
22. At the beginning of December 2021 the Council obtained from Mrs Y a valuation of the property with Mrs X’s 50% share for the purpose of a DPA. The Council agreed to this valuation.
23. When signing the DPA on Mrs X’s behalf, Mrs Y decided not to opt for the DIA.
24. In January 2024 the Council discussed with Mrs Y revaluation of Mrs X’s property. Mrs Y was concerned about the Council’s methods of valuating properties under a DPA. She had a meeting set up with the Council’s surveyor but decided to get her own valuation from the surveyor who previously valuated Mrs X’s share in the property. After receiving legal advice, the Council agreed to accept this valuation.
25. The Council sent new DPA statements with incorrect equity limits at the end of February 2024 and in mid-July 2024.
26. Later in the year the Council noted Mrs X’s property equity fell below £23,250 at the beginning of March 2024. Her total capital would fall below £23,250 in November 2024. The Council concluded Mrs X’s DPA would end at the end of February 2024 with Mrs X paying full costs between March and November 2024. From the fourth week of November the Council would become responsible for funding Mrs X’s residential care.
27. In the second week of July 2024 the Council told Mrs Y that Mrs X would not be responsible for paying the full weekly cost of her care once her property equity fell below the upper threshold limit of £23,250 in mid-November 2024. From this date Mrs X would be expected to continue paying contributions towards the cost of her care from her income and benefits and a capital tariff. The Council explained how capital tariff will be charged on Mrs X’s property equity over 14,250.
28. From August to October 2024 the Council sent four revised schedules of charges to Mrs Y.
29. Mrs Y complained to the Council at the beginning of August 2024. The Council replied over a month later acknowledging it:
• sent Mrs Y incorrect DPA statements in 2024 and was not consistent. The Council apologised and said it would review the current valuation procedures to ensure the Council was following best practice;
• made some errors in the calculation of charges from Mrs X. The Council apologised and undertook to send Mrs Y amended calculations and review its practice;
• had some incorrect information on its website about DPAs, which the Council said it would amend.
30. The Council did not uphold other issues of Mrs Y’s complaint. The Council apologised for not delivering the right standard of service and offered a payment of £250.
31. Mrs Y was still concerned about the way the Council carried out a valuation of joint ownership of her and Mrs X’s property as she said, if not for the Council’s failings, Mrs X would not have had to spend money on specialist advice and valuation. She accepted the Council’s offer of providing clearer calculations of interest accrued for the deferred payments and asked for more clarity on the spreadsheets and the Council’s website.
32. In October 2024 Mrs Y communicated with the Council about the maintenance costs of Mrs X’s property.
33. In its further response to Mrs Y’s complaint the Council said it:
• could not apply a blanket approach to property valuations in all cases and needed to consult with its legal team in some of them, such as Mrs X’s;
• would liaise with Mrs Y about including maintenance costs due from Mrs X within the calculation of her charges;
• would allow DIA to be ring-fenced in the future for those who had requested it;
• was undertaking a review of Mrs Y’s correspondence with the Adult Social Care team to decide what changes it needed to make.
34. Responding to our enquiries at the beginning of May 2025 the Council could not specify any changes introduced as a result of Mrs Y’s complaint and feedback. It said the project was a substantial piece of work covering several teams and was still ongoing.

Analysis

35. The Council has already accepted its failings with not providing sufficient information about DPAs. When charging for care services provided to its residents, the Council should ensure they have clear information about the rules for charging which will allow them to make informed decisions about their care.
36. Mrs Y claimed she and Mrs X were negatively affected by the lack of sufficient and clear information about DPAs before they decided to apply and when the Council was calculating the charges.
1. we cannot say, even on the balance of probabilities, whether Mrs Y would have made a different decision on her mother’s behalf if she had had more detailed information provided by the Council before she signed a DPA. At the time the Council suggested obtaining legal advice. The Council is required to do so under the Statutory Guidance. Obtaining independent legal advice would have reduced any negative impact of not having enough information on Mrs Y’s decision-making process.
2. Mrs Y’s communication with the Council from January 2024 shows that the lack of clear information about DIA and PEA and how the Council calculates care charges caused Mrs Y distress. She spent much time contacting the Council and trying to understand the way the Council calculated charges. She was also concerned about having sufficient funds available for her mother’s expenses.
37. I did not find fault in the Council’s approach to valuating properties under DPAs. The Council explained it would treat each case individually and this is acceptable. When a property valuation is not agreed, the Council should follow the process explained in paragraph 12. After discussing revaluation of Mrs X’s share in the property with Mrs Y in January 2024, the Council offered to meet up with her.. Mrs Y got her own independent valuation instead. The Council asked its legal team to consider it and advise. This is acceptable.

Remedies

38. The Council has already apologised for its failings and offered a payment for Mrs Y’s distress of £250. It also offered to include in the calculations of Mrs X’s care charges any maintenance costs proven by invoices. These are suitable personal remedies.
39. The Council’s approach shown through its handling of Mrs Y’s complaint is commendable. The Council accepted its failings, offered personal remedies and decided what needed to be done to improve its services.
40. After acknowledging some failings in October 2024 the Council stated it would improve its services. In its comments to my draft decision the Council specified the details of the ongoing project of reviewing the DPA pathway:
• starting work on the website information with the Senior Finance Officer and Account Manager responsible for this review. One area of improvements relates to including in the person’s assessment the information on owning a property or its share;
• defining a DPA on the Council’s website and, following our recommendations, adding the information about DIA and PEA as well as the Council’s ringfencing policy;
• reviewing letters, fact sheets and other information, advice and guidance;
• before completing financial assessments for DPAs checking with financial representatives that they understand reasons for DIA.
41. The Council has also confirmed it had implemented the DPA module so that the system calculates the deferred debt automatically.

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Action

42. To remedy the injustice caused by the faults identified, we recommend by 31 March 2026 the Council ensure the information on its website and in leaflets and letters about Deferred Payment Agreements:
1. is detailed and clear;
2. includes information about Disposable Income Allowance as well as Personal Expenses Allowance and how the Council ring-fences these sums;

The Council should provide us with evidence it has complied with the above actions.

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Decision

43. I find fault causing injustice. The Council has accepted my recommendations, so this investigation is at an end.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman