Summary: We will not investigate this complaint about a deferred payment arrangement as there is insufficient evidence of fault and injustice to justify an investigation.

The complaint

1. Ms X complains that the Council:

• Wrongly charged Mrs Y for care fees over the equity limit set by her deferred payment arrangement.
• Wrongly charged interest for the period when Mrs Y’s capital dropped below £14,250.
• Failed to issue any statements so Ms X was not aware Mrs Y’s care fees had reached the equity limit

2. Ms X considers that as a result Mrs Y’s estate will have to pay more care fees and interest than she owed.

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The Ombudsman’s role and powers

3. We investigate complaints about ‘maladministration’ and ‘service failure’, which we call ‘fault’. We must also consider whether any fault has had an adverse impact on the person making the complaint, which we call ‘injustice’. We provide a free service, but must use public money carefully. We do not start or continue an investigation if we decide there is not enough evidence of fault to justify investigating, or any fault has not caused injustice to the person who complained. (Local Government Act 1974, section 24A(6), as amended, section 34(B))

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How I considered this complaint

4. I considered information provided by Ms X and the Council.
5. I considered the Ombudsman’s Assessment Code.

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My assessment

6. Some years ago, Mrs Y moved into a residential care home. Mrs Y owned a property and entered into a deferred payment arrangement with the Council.
7. A deferred payment arrangement is a loan from a council to pay for care home fees and is secured against the person’s property. It is not required to be repaid until the property is sold. Councils must set an equity limit to ensure the deferred charges do not exceed the equity in the property.
8. Mrs Y sadly passed away. Ms X complained to the Council as she considered it had wrongly charged care fees over the equity limit set out in deferred payment arrangement. Ms X considered the charges should not be paid as Mrs Y’s care fees reached the equity limit some years earlier. Ms X also did not agree with the interest charged.
9. In response to Ms X’s complaint the Council said that it was aware Mrs Y reached the equity limit some years earlier and no further accruals were made against the value of the property since that date. But it would continue to apply interest charges and fees until the deferred payment agreement was settled in full.
10. We will not investigate this complaint. The Council did not add any further care charges to the deferred payment arrangement after Mrs Y reached the equity limit. We are mindful that Ms X disagrees with the Council charging interest until the deferred payment arrangement is repaid. But the law allows the Council to charge interest and administration fees until the deferred payment arrangement is repaid in full. So, there is insufficient evidence of fault to justify an investigation.
11. Ms X said she did not receive any statements so she did not know Mrs Y had reached the equity limit. Had she known, she would have sold Mrs Y’s property sooner. In its response to Ms X’s complaint, the Council said it issued statements on Mrs Y’s account every six months. We will not investigate this aspect of Ms X’s complaint. We cannot now know, even on balance, how long it would have taken to sell the property. It is possible the Council would have increased the equity limit at that time and charged a higher rate of interest. We would also have to take into account that Ms X would have been aware she had not received a statement some years ago. So, we could not know, even on balance, if any fault by the Council caused significant injustice to Mrs Y.

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Final decision

12. We will not investigate Ms X’s complaint because there is insufficient evidence of fault and injustice to justify an investigation.

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Investigator's decision on behalf of the Ombudsman