Summary: Ms K was managing a direct payment for her daughter. She complains the Council failed to ensure her parents, who were carers for her daughter, received redundancy pay. We have upheld the complaint as the Council did not properly keep the direct payments under review. The Council has now agreed to make the redundancy payments, which in our view is a suitable remedy.

The complaint

1. The complainant (Ms K) complains the Council failed to ensure her parents, who were carers for her daughter, received redundancy pay. She also says that there was delay making a payment for their final month of work.
2. As a result, Ms K received a debt collection letter which was incorrect. Mrs K says this caused her stress and affected her relationship with her parents.

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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. 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(1), as amended)
5. Under our information sharing agreement, we will share this decision with the Care Quality Commission (CQC).

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How I considered this complaint

6. I considered evidence provided by Ms K and the Council as well as relevant law, policy and guidance.
7. Ms K 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

Legal and administrative background

Transition from children to adult services

8. When a child reaches 18 years of age, they are legally an adult and responsibility for meeting their needs moves from the council’s children services to its adult services. The legal basis for assessing their needs changes from the Children Act 1989 to the Care Act 2014. However, councils can decide to treat a children’s assessment as an adult assessment and can also carry out joint assessments.

Direct payments

9. Parents/carers of disabled children can ask for a direct payment to meet the needs of the child. The council must carry out an assessment and direct payments must be sufficient to meet the assessed needs. direct payments must be used by the parent/carer to meet the child’s needs. direct payments do not affect any benefit entitlement.
10. Persons receiving direct payments must keep and submit accounts.
11. Councils must review the making of direct payments: 

• at least once within the first year of the direct payments being made;
• at appropriate intervals, not exceeding twelve months, thereafter;
• where the council reasonably considers the recipient is no longer eligible for a direct payment; and 
• whenever notified the direct payment may not have been used to secure provision for services for which the payment was made or the person receiving the payment is no longer suitable. (The Community Care, Services for Carers and Children’s Services (Direct Payments) (England) Regulations 2009)  

12. Where a person uses a direct payment to employ a personal assistant, they become an employer with all the responsibility for PAYE, holiday pay, sick pay, redundancy, recruitment etc. A support agency should be available to help with this.

What happened

13. Ms K’s daughter (Ms L) has multiple disabilities. The Council’s children’s social work team worked with the family for several years. Ms K managed Ms L’s care and support on her behalf through a direct payment. She employed her parents (Mr and Mrs M) to act as Ms L’s personal assistants (PA), providing overnight care, support and respite. Ms K employed an organisation (Organisation 1) to provide payroll services.
14. In 2024 Ms L had her 18th birthday. So responsibility for her care and support moved to the Council’s Adult Social Care (ASC) team. Around two weeks before Ms L’s birthday, Ms K advised the Council Mr and Mrs M would stop providing their support to Ms L on her 18th birthday.
15. It took some time for Organisation 1 to provide its final calculation of the payments owed. It apologised to Ms K for this delay.
16. There was then a question of whether Ms K or the Council was responsible for redundancy pay for Mr and Mrs M. After seeking advice, the Council advised Ms K this was her responsibility, as the employer.
17. Ms K received a demand from a debt collection agency chasing her for unpaid income tax. The Council agreed to pay this bill to the relevant government department.
18. Ms K complained. After completing the Council’s complaints procedure, she complained to the Ombudsman.
19. In response to our enquiries, the Council advised the following.
• Despite receiving legal advice, it was unsure of the facts of the case. It had been looking at an old contract from Organisation 1. This described the service offered to people with a direct payment, including that, as an employer, they would need to deal with matters related to being an employer, including insurance to enable redundancy payments. It had believed that applied in Ms K's case, but after investigation, realised it did not.
• Ms K’s duty was to have insurance, but it knew she did not have it, and did not pay her for it. And it did not have evidence to show it ever challenged Ms K over the requirement.

• It believed that, due to the lack of auditing, it should pay the redundancy payments and would make arrangements to do so.
• The other outstanding payments to Mr and Mrs M were caught up in the suspension of the redundancy payment and the Council’s discussion of whether to make the payment.
• The tax bill was not related to the redundancy payment (which was under the relevant tax threshold). It was the income tax due on the income Mr and Mrs M received.

20. In response to my draft decision, the Council advised it had reviewed and amended its direct payment policy to ensure it managed direct payments thoroughly.

Analysis

21. The Council had a statutory duty to keep its direct payments it made under review. In Ms K’s case it has accepted it did not keep them under review, even though it says it knew Ms K did not have the insurance needed to make redundancy payments. That was fault.
22. The Council has remedied the injustice by agreeing to pay the redundancy payments. It has also paid the outstanding balance of wages to Mr and Mrs M. That is a suitable remedy.

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Agreed action

23. I recommend that within a month of my final decision, the Council make the redundancy payments to Mr and Mrs M.
24. The Council should provide us with evidence it has complied with the above actions.

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Decision

25. I find fault causing injustice. The Council has agreed actions to remedy injustice.

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Investigator's decision on behalf of the Ombudsman