Summary: There was no fault in the Council’s decision to include Mrs Y’s property in its financial assessment for care fees because the Council followed statutory guidance in reaching the decision.

The complaint

1. Mr X complained for his relative Mrs Y about the Council’s decision to include the value of Mrs Y’s property in the financial assessment for Care Home fees. He said this caused a financial loss.

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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 how the organisation made its decision, 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 s34H(1), as amended)

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How I considered this complaint

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

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What I found

Relevant law and guidance

6. Councils arrange and find care home placements after a social care assessment. People pay a charge towards the cost of their care based on a financial assessment of their income and capital. If a person has assets (including property) over £23,250, they are not entitled to council funding. However, a council can instead offer a deferred payment agreement (DPA). A DPA allows a person to put off selling their property to a future date and receive a loan from the council for some of the fees)
7. Deprivation of assets refers to the intentional reduction of assets (like money or property) to avoid being included in the financial assessment for care fees. It can include transferring assets into a trust to avoid paying care fees.
8. Regulation 22(1) of the Care and Support (Charging and Assessment of Resources) Regulations 2014 (the 2014 Charging Regulations) says

“the adult is to be treated as possessing capital of which the adult has deprived themselves for the purposes of decreasing the amount they may be liable to pay towards the cost of meeting their needs for care and support…”

9. Annex E of Care and Support Statutory Guidance (CSSG) says there may be many reasons for a person depriving themselves of an asset. A local authority should therefore 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 capital was disposed of could the person have a reasonable expectation of the need for care and support?
10. A deferred payment agreement (DPA) is a loan from a council that allows a person to pay for their care home fees in the future. The fees are repaid at the end of the agreement, usually from the person’s estate.

What happened

11. Mrs Y transferred her flat into a trust in 2013. The trust paperwork said it was to make better provision for the beneficiaries and to avoid them the trouble and expense of probate. The beneficiaries of the trust were Mrs Y, her children, other relatives, named friends and charities.
12. In July 2022, Mrs Y’s social worker emailed Mr X about a possible flat in an extra care housing flat for Mrs Y. The social worker asked Mr X if she had property worth more than £60,000. Mr X replied saying Mrs Y had a flat worth £170-180 000 that was put into trust many years ago and intended to protect the proceeds from the flat against paying for care.
13. In April 2024, the Council wrote to Mr X and Mrs Y in response to their request for assistance towards the cost of Mrs Y’s placement in a care home. The Council said Mrs Y was eligible for 12 weeks of funding under the ‘property disregard rule’. (The property disregard is temporary council funding to enable a person to make arrangements for future care home funding including selling their home). The letter explained that Mrs Y would be liable to pay all the fees after 12 weeks.
14. The finance team sought legal advice from the Council’s lawyers. That advice said:
• The family were arguing the flat shouldn’t be included in the assessment because Mrs Y had no interest in it
• At the time Mrs Y went into the care home, she lived in the flat as if she were the sole owner
• The trust was called a family protection trust. It was therefore protected against something. They were marketed as a way of avoiding inheritance tax (IHT) and/or care fees. Mrs Y’s estate would be well below the IHT threshold meaning tax avoidance would be an unlikely motivation
• The trust papers advised Mrs Y to contact her solicitor immediately if care became a concern and said not to arrange care before contacting them
• Against this background, it was reasonable for the Council to conclude avoiding care fees was a significant motivation.
• If the family could provide an explanation for what the trust would achieve other than avoiding fees, the Council would reconsider.
15. The finance team shared a copy of the legal advice with Mr X.
16. Mr X said Mrs Y decided on the trust because of an abusive relationship with some of her children. He added Mrs Y’s health was good in 2013 and she said she would rather kill herself than end up in a care home. The finance team replied asking Mr X to provide written evidence as to Mrs Y’s intentions at the time (like letters between her and the solicitors.). Mr X said there wasn’t anything in writing. The finance team said there was likely correspondence between Mrs Y and her solicitor. Mr X said Mrs Y gave instructions by phone and the trust documentation was generic and not tailored to individuals. The Council said it would continue to charge Mrs Y the full cost of her care and had sent an offer for a DPA.
17. The DPA was later set up.
18. Mr X complained to the Council about its decision. He said Mrs X was in great health both physically and mentally in 2013 when the trust was created and due to a fractured relationship with her children she took the trust out to avoid any probate issues.
19. The Council did not uphold Mr X’s complaint. The finance manager said:
• If the Council believed that a significant motivation was avoiding care home fees, it was entitled to include the property in the financial assessment
• It did. The reasons were:
1. In July 2022, he told a social worker the trust was intended to protect the proceeds from paying for care
2. the paperwork supplied with the trust referred to not arranging care before contacting the solicitor and if care became a concern, to contact them straight away
3. a will would have achieved the purpose of protecting the estate from other family members
4. his correspondence indicated Mrs Y was alert to the possibility of moving into care (as he stated she did not want to)
    

Findings

20. There is no fault by the Council. It applied relevant law and guidance when it decided one of Mrs Y’s motives in setting up the Trust was to avoid care home fees. It looked at all the evidence including the Trust documents and information from Mr X, including an email he sent in 2022. The evidence indicates the following:
• In 2013 the trust paperwork said the purpose was to avoid probate costs
• In 2022 Mr X said avoiding care fees was Mrs Y’s reason for setting up the Trust
• In 2024 Mr X said family dynamics and IHT avoidance were the reason for the Trust
• In 2024 Mr X said Mrs Y was in good physical health at the time she made the Trust.
21. It is not for the LGSCO to decide what weight to give each piece of evidence. The finance manager reviewed the decision when Mr X complained and noted his email in July 2022 which clearly stated one of Mrs Y’s intentions (motivations) at the time was to avoid care fees. There is no fault in the decision and so the LGSCO has no grounds to question it.

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Decision

22. I find no fault.

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Investigator's decision on behalf of the Ombudsman