Summary: There is no fault in the Council’s financial assessment for Ms Y’s care charge. The Council considered evidence from Mrs X including a lodger’s agreement and explained it was not satisfied Ms Y was liable for rent or that she paid housing costs. It has included revised disability related expenditure allowances in line with guidance. So we do not uphold the complaint.

The complaint

1. Mrs X complained for Ms Y that the Council refused to include housing costs in Ms Y’s financial assessment for care charges and reduced allowances for disability related expenses (DRE).
2. She said this caused a financial loss as previously Ms Y did not have to pay a charge for her care.

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The Ombudsman’s role and powers

3. 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)
4. 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

5. I considered evidence provided by Mrs X and the Council as well as relevant law, policy and guidance.
6. Mrs 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

The LGSCO’s Principles of Good Administrative Practice says we expect councils to act fairly and proportionately and to be open and accountable. This includes:

• Explaining clearly the rationale for decisions and recording them;
• Stating the criteria for decision-making and giving reasons; and
• Keeping proper and appropriate records.
1. Councils have the legal power to charge for most types of adult social care. If they do so, they must carry out a financial assessment (FA) to determine how much the person should pay.
2. For home care, the law says a person should be left with a certain income after any charge. This is called the minimum income guarantee. The FA looks at a person’s income from benefits, salary and pensions and any savings they may have. It disregards some disability benefits, specified income and reduces the charge if the person has expenses connected with their disability (called ‘Disability Related Expenditure’ or DRE). (Care and Support Statutory Guidance, paragraph 8.42)
3. DRE allowanced reduce a person’s charge and can include specialist items and services such as wheelchairs. They can include extra heating or laundry costs, equipment and aids and regular payments such as wheelchair insurance and gardening costs. A council must leave a person with enough money to pay for necessary DRE to meet needs that are not being met by the local authority (Care and Support Statutory Guidance, Annex C, paragraphs 39 and 41.)
4. The law says a council is to disregard housing related costs in calculating a person’s income in an FA. Housing costs are mortgage payments, rent, council tax and eligible service charges.) (Schedule 1, Care and Support (Charging and Assessment of Resources) Regulations 2014)
5. The Council’s adult social care charging policy says it will disregard (make an allowance for) rent payments net of housing benefit. The Council explained it also considers whether the person has a genuine and enforceable liability for rent. It looks at the supporting evidence a person has provided and makes a decision about credibility.

What happened

12. Mrs X manages Ms Y’s welfare benefits as her appointee (an appointee is an adult who the Department for Work and Pensions authorizes to claim and receive welfare benefits because the recipient has a disability or health condition which means they cannot do it themselves). Ms Y receives care and support, arranged by the Council. She did not have to pay a contribution towards the cost of her care until 2025.
13. The Council’s finance team sent out its yearly form out to Mrs X to review the FA which she completed and returned. The case notes indicate the finance officer considered the evidence Mrs X had provided: bank statements, premium bonds, stairlift maintenance, careline, council tax, water bill and home insurance.
14. The finance officer spoke to Mrs X at the end of January. Mrs X was upset about the proposed weekly charge of £128. The officer noted:
• One of Ms Y’s welfare benefits had increased
• Council tax had been included in the FA
• DRE’s for domestic help and gardening were included
• Cost for the stairlift was split three ways as all three occupants used it
• Ms Y was now receiving a mobility allowance and so was no longer entitled to DRE for transport.
15. An officer and Mrs X spoke again at the start of February. From the notes of the call, it appears she had not yet received written notification of the charge. Mrs X said the charge would not be affordable. The Council sent a letter in February with a breakdown of the weekly charge of £114. It included allowances of £237 made up of:
• DRE for alarm, domestic help, equipment, gardening
• Council tax and water rates.
16. The Council sent a further breakdown of the revised charge in April. The weekly charge from April was £85. It included weekly allowances of £266 for similar items as in the February letter plus rent (£29).
17. Mrs X wrote to the Council in the middle of April. She enclosed a revised ‘lodger agreement.’ dated 7 April 2025. The rent was £125 a week and council tax was £22 a week.
18. At the end of April, a different officer reviewed the FA on receipt of further information from Mrs X. The officer clarified with colleagues that the Council would only include housing costs where the property was rented in the client’s name. The officer noted they considered the mileage request, but the Council did not include this because claimed costs were less than Personal Independence Payment mobility. The officer also noted:
• They had asked Mrs X to confirm the cost of domestic help and whether the stairlift was used by all the household.
• The reason Ms Y now had to pay a charge was that her welfare benefit income increased in 2022 and the Council was not made aware at the time
• There were also errors on the original assessment which were not picked up and so had rolled over year to year.
19. An FA notification letter in May/June 2025 gave an assessed charge of £107. The DRE allowance for the stairlift was amended to reflect that only two and not three household members use it. The letter advised Mrs X:
• To apply for housing benefit and that if the claim was successful and there was a shortfall in cover, the Council would consider a housing allowance.
• That the Council had included half the cost of the stairlift, full amounts put on her form for gardening, community alarm and gardening, no transport because the claimed costs were not more than PIP mobility, and the standard laundry allowance.
• An additional amount for energy was not included as the claimed cost was not more than the guidelines the Council used which were based on national average usage.
20. In May an officer explained to Mrs X that:
• She needed to apply for housing benefit for Ms Y and if there was a shortfall, the Council may include this.
• Most of the claimed DRE had been included.
• Her gas and electricity costs were less than guidance about average usage
• Extra laundry costs were for powder only. Water and electricity were included in other allowances
21. Mrs X complained to the Council about the same issues she has raised with the LGSCO. The Council did not uphold her complaint saying:
• Ms Y was previously assessed as not liable for a charge. The Council reviewed her finances periodically
• It had carried out a reassessment based on the information in her review form and information from the Department for Work and Pensions (DWP). A letter set out the details.
• If there was additional DRE or the benefits figures were wrong, she could provide evidence and the Council would look at the case again
• Rent/housing costs had not been included since 2017. The inclusion of rent up to 2017 was a mistake
• Ms Y does not hold a tenancy or have a mortgage and would not be eligible for housing benefit. The Council followed housing benefit regulations which would not allow for housing costs in this circumstance
• It had allowed a portion of the cost of council tax and water rates.
22. The Council told me:
• Ms Y lives in the same property as her parents who are cited as the landlords.
• The agreement is dated the same day as the request for a financial reassessment and so it raises concerns about its validity.
• Ms Y lacks mental capacity to enter into a lodger agreement and Ms X cannot do so on her behalf as she is the landlord and so there is a conflict of interest
• Mrs X has not provided any evidence of ongoing rental payments
• It would consider further evidence of DRE submitted by Mrs X, but not rental income for the reasons given.

Was there fault?

The Council refused to include housing costs

23. The Council considered Ms X’s submissions and evidence for a claim for housing costs. It concluded the lodger’s agreement did not establish a liability for rent and the agreement may not be legitimate because of the date being the same as the date of the request for a review of the FA. It also noted a conflict of interest, Ms Y’s lack of mental capacity to contract and no payments being made.
24. The Council’s decision was taken without fault. It has explained the reasons for refusal and was entitled to conclude the agreement was not legitimate.

The Council reduced allowances for disability related expenses (DRE).

25. The Council has included DRE allowances for the items Ms X claimed and it reviewed the FA on receipt of further information and evidence from Ms X. This approach is in line with Care and Support Statutory Guidance and there is no fault.
26. Ms Y has gone from no charge to paying a charge. The Council has explained this is mostly due to Ms X not informing the Council of increases to Ms Y’s income from benefits and due to a favourable error in previous years that was carried over. The Council has given an explanation with clear reasons that is in line with our expectations and there is no fault.

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Decision

27. I find fault no fault.

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Investigator's decision on behalf of the Ombudsman