Summary: Mr X complains the Council and its care provider failed to deal properly with his daughter’s finances, resulting in her capital increasing to the extent she was no longer eligible for state benefits and having to use her savings to pay bills. The Council did not manage the daughter’s finance’s properly, resulting in her owing over £10,000. The Council needs to contribute towards repaying the debts.

The complaint

1. The complainant, whom I shall refer to as Mr X, complains the Council and its care provider failed to deal properly with her finances, resulting in her capital increasing to the extent she was no longer eligible for state benefits and having to use her savings to pay bills.

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The Ombudsman’s role and powers

2. 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 an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
3. If we are satisfied with a council’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, sections 30(1B) and 34H(i), as amended)
4. We investigate complaints about councils and certain other bodies. Where an individual, organisation or private company is providing services on behalf of a council, we can investigate complaints about the actions of these providers. (Local Government Act 1974, section 25(7), as amended)

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How I considered this complaint

5. I have:
• considered the complaint and the documents provided by Mr X;
• discussed the complaint with Mr X;
• considered the comments and documents the Council has provided in response to my enquiries; and
• shared a draft of this statement with Mr X and the Council, and invited comments for me to consider before making my final decision.

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What I found

What happened

6. Mr X’s daughter, Miss Y, has a learning disability. The Court of Protection has appointed the Council as her Deputy to manage her finances. Since mid-2017 she has lived in supported living accommodation, which was previously registered as a care home. This had implications for her finances, resulting in her housing provider charging her rent and having to pay separately for her care and household expenses. While living in a care home there had been a single charge for residential accommodation. However, the change also resulted in a significant increase in Miss Y’s disposable income. While in residential accommodation she will have been left with a Personal Expenses Allowance (£24.90 a week) but in supported living she has a Minimum Income Guarantee of £151.45 a week.
7. Anyone with over £16,000 in savings is not eligible for state benefits. However, anyone under retirement age, such as Miss Y, with savings over £6,000 is likely to have a reduced entitlement to benefits.
8. Miss Y has a current account and a savings account. The Council says there has been no significant change in her savings between May 2017, when she had £5,496.90 in her savings account, and January 2019 when she had £5,515.20.
9. Miss Y has also had two current accounts during this time. According to the Council’s records, she had around £10,000 in a current account in mid-2017. By October 2018, when the Council merged this account with another current account opened in February 2018, she had over £20,000. This increased to nearly £25,000 in March 2019. It decreased to £14,459.72 in May 2019 when Miss Y started paying rent to her housing provider (including arrears) and bought a funeral plan (£4,141). In June the money in the current account went down to £9,000 when Miss Y paid backdated household fees of £4,757.55. By 27 April 2020 Miss Y had £11,277.93 in her current account.
10. Mr X complained to the Council and to the care provider in July 2019. They both replied in September.
11. The care provider said:
• it set up household accounts in April 2018 and wrote to the Council in May 2018;
• it transferred responsibility for collecting utility charges to the housing provider in October 2018;
• at the Council’s request it started raising invoices;
• it was not responsible for managing Miss Y’s finances, but the Council was, so it could not take responsibility for her savings or benefits.
12. The Council said:
• there was a delay in reaching an agreement with the care provider about the change from residential care to supported living;
• Miss Y’s capital went over the threshold for Employment and Support Allowance (ESA) on 4 July 2017 but it did not tell the Department for Work and Pensions (DWP) about this until September 2018;
• DWP suspended Miss Y’s ESA in March 2019 and the Council told the care provider she would have to pay full rent;
• in April the housing provider told the Council Miss Y owed £2,220 as she had not been paying a service charge (£16 a week);
• in May 2019 the care provider told the Council Miss Y had to pay household contributions and owed £4,757.55;
• Miss Y became eligible for benefits again on 11 June 2019 and started receiving ESA on 1 August;
• it did not uphold Mr X’s complaint, saying it had fulfilled its responsibilities to his daughter.
13. The Council says there was a £10,540.53 overpayment of Housing Benefit between August 2018 and April 2019, which resulted in an £11 cut in Housing Benefit payable. The Council says there was also a potential overpayment of ESA of £2,500 but, so far, the DWP has not sought repayment. As Miss Y is slightly over the threshold for Housing Benefit, the Council will consider making a decision in her best interests to partially repay the Housing Benefit overpayment to avoid losing benefits again.
14. The Council says that having reviewed Miss Y’s case it:
• has introduced an annual planner;
• carries out quarterly capital reviews;
• ensures it does benefits notifications and records them;
• runs a monthly capital report.

Is there evidence of fault by the Council which caused injustice?

15. The Council accepts it did not deal properly with Miss Y’s finances and is making changes to prevent such problems from happening again. When Miss Y’s accommodation changed from a care home to supported living her disposable income increased. There were delays in charging her for her care and her living costs. This resulted in her capital increasing so she was no longer eligible for benefits. The Council delayed in reporting this to other agencies. The Council says the money in Miss Y’s savings account has not been affected. But that misses the fact that in 2017 she had capital of £15,500 but no debts. She currently has over £16,000 in capital but owes £10,500 in overpaid Housing Benefit and possibly and a further £2,500 to the DWP. If there had been no fault over managing Miss Y’s finances, she would have had no debts. That is an injustice which the Council needs to remedy.
16. To remedy the injustice the Council needs to repay the Housing Benefit debt less the cost of the funeral plan. It also needs to repay the DWP debt if it asks for repayment. It should consider whether it is in Miss Y’s best interest to use her capital to repay the remaining Housing Benefit debt. However, it also needs to find out if there are other things Miss Y wants to do with her disposable income. The Council should also apologise to Mr X and pay recompense for the time and trouble it has put him to.

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Agreed action

17. I recommended the Council:
• repays £6,400 of Miss Y’s Housing Benefit debt;
• if the DWP seeks recovery of the benefits overpayment, repay that for her;
• considers whether it is in Miss Y’s best interests to repay the remaining Housing Benefit debt from her capital;
• finds out whether there are other things Miss Y wants to do with her disposable income;
• writes to Mr X apologising for its failings and pays him £250 for the time and trouble he has been put to in pursuing his complaint.

The Council has agreed to do this within six weeks.

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Final decision

18. I have completed my investigation as the Council has agreed to take action to remedy the injustice it has caused.

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Investigator's decision on behalf of the Ombudsman