Summary: Mrs A’s representative complained the Council wrongly concluded she had deprived herself of capital. The Council has offered to review its decision. We consider this is a suitable remedy for the fault we have identified.

The complaint

1. Mrs A and her daughter Ms A’s representative, a property trust company, complained the Council had not properly considered Mrs A’s finances for the purpose of assessing her contributions to residential care. They say the Council has wrongly decided that there was a deprivation of Mrs A’s assets, and that it did not take account of the reasons for Mrs A going into care.

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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 the decision making, 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 34H(i), as amended)

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How I considered this complaint

4. I have discussed the complaint with the complainant and considered the complaint and the copy correspondence provided by the complainant. I have made enquiries of the Council and considered the comments and documents the Council provided. Mrs A and Ms A’’s representative and the Council now have an opportunity to comment on my draft decision. I will consider their comments before making a final decision.

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What I found

Deprivation of assets

5. The charging rules for residential care are set out in the “Care and Support (Charging and Assessment of Resources) Regulations 2014” (the regulations), and the “Care and Support Statutory Guidance 2014” (CSSG). When the Council arranges a care home placement, it must follow these rules when completing a financial assessment to decide how much a person must pay towards the costs of their residential care.
6. The rules state that people who have over the upper capital limit, £23,250, should pay for the full cost of their residential care home fees. However, once their capital has reduced to less than the upper capital limit, they only have to pay an assessed contribution towards their fees.
7. Regulation 22 says councils must treat people as still having capital they have deprived themselves of for the purpose of reducing the amount they need to contribute to the costs of their care. Capital treated this way is often called ‘notional capital’.
8. However, the CSSG says councils should not automatically assume deprivation. It says there may be valid reasons someone no longer has an asset and councils should ensure they fully explore this first.
9. Annex E of the CSSG says that when deciding if someone has deprived themselves of assets, councils should consider:
1. Whether avoiding the care and support charge was a significant motivation;

b) 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?; and

c) Did the person have a reasonable expectation of needing to contribute to the cost of their eligible care needs?

The Council’s deprivation of assets policy

10. The Council policy (April 2015) states:

6.1 Deprivation of assets means where a service user has intentionally deprived or decreased their overall assets in order to reduce the amount they are charged towards their care. This means that they must have known that they needed care and support and have reduced their assets in order to reduce the contribution they are asked to make towards the cost of that care and support.

What happened

11. Mrs A had a diagnosis of dementia in 2014. She lived at home and received care and support which she paid for privately. Her daughters Ms A and Mrs B held lasting power of attorney (LPA)regarding her financial affairs and for her health and welfare.
12. In 2017 Mrs A created a property trust for her home and transferred £195,000 into an investment bond.
13. In late 2019 Mrs A was admitted into a care home on a short term basis because she had dislocated her shoulder. The placement was privately arranged and funded. It was planned that after a period of rehabilitation, Mrs A would return home. However, after four months Mrs A remained in the home. Mrs A’s representatives contacted the Council to say her capital had reduced and to request that the Council fund her care.
14. In April 2020, the Council asked Ms A about the creation of the property trust, and the investment bond. This was in order to assess Mrs A’s financial contributions for the care home. The Council asked what advice the family received when the trusts were created. The Council also asked when Mrs A was diagnosed with dementia and when the LPA had been created.
15. In October 2020, following a review of Mrs A’s needs, the Council advised Ms A that Mrs A now needed long term care. The Council asked Ms A for the outstanding information from April so it could complete its financial assessment.
16. The Council says it received limited information in response and it then started communicating with the company that set up the property trust.
17. In December 2020 the Council told Ms A it appeared Mrs A put her home into the property trust after the LPA was set up and some years after she had been diagnosed with dementia. The Council said that if it considered a person had carried out actions to reduce their liability for care fees this could be deemed self deprivation and the value of the assets would be added back into the assessment. The Council asked again for the reasons why the property had been put into trust, as it expected the family would have received professional advice.
18. The property trust company replied in January 2021 that Mrs A wanted her daughters to receive professional guidance to help them deal with her assets. It was also to ensure her property was managed without potential risk to her daughters due to events such as divorce, creditor difficulties or relationship breakdown. The company said when the transfer took place Mrs A was in good health and it was not foreseen that she would require long term care. She had gone into hospital following a fall which the family could not have anticipated.
19. On 21 January 2021,after seeking legal advice, the Council informed Ms A that it had decided Mrs A was responsible for the full costs of her care. It stated that it considered that Mrs A’s property had been put into trust to avoid paying social care costs. The Council letter did not explain how it came to this decision or refer to its consideration of motivation. The Council did not give details how to appeal or complain regarding the decision.
20. Ms A questioned the Council’s decision because she said that she could not understand or agree with the Council’s decision.
21. The Council replied that it considered placing Mrs A’s property into trust was an act of self-deprivation. It advised Ms A that if she wished she could appeal, providing any further information on the circumstances of the decision to put the property into trust.
22. In March 2021 the property trust company confirmed the family wished to appeal. But it said the Council had not considered annexe E of the guidance (CSSG) which said that deprivation should not be assumed, and that the Council should consider whether avoiding care and support charges was a significant motivation. The company said Mrs A did not have any eligible care needs at the time of, and for a significant period of time after the disposal of the asset. The company said Mrs A had gone into a care home for a short period, but this coincided with the Covid crisis and the family had no choice but for Mrs A to remain in the home.
23. The Council confirmed the company’s statement of appeal and asked whether it wished to provide any further information, such as details of the care she received before 2020, professional guidance received before the trust was created. It does not appear the company provided any further information. However, the Council did not progress the appeal on the basis of the information it had received.
24. In July 2021 the care home advised the Council that the outstanding fees for Mrs A were over £23,000. The Council told Ms A that it had not received an appeal.
25. The property trust company sent the Council a copy of an email from a manager of the care home. This stated that Mrs A entered the home due to having a dislocated shoulder, and would have returned home after her recovery. But due to the Covid 19 pandemic she remained in the home. This was because Mrs A would be at risk as she lacked understanding of the risks of social contact.
26. The Council replied that it had discussed Mrs A’s care with the care home and Ms A. Both Ms A and the home reported that Mrs A required 24 hour care. Therefore, the Council’s decision remained it should include the value of Mrs A’s property.
27. In September 2021, the property trust company disputed the Council’s view and asked it to reconsider. It said it did not believe the Council had considered the letter from the care home manager regarding the reasons for Mrs A remaining in the home. It said Mrs A would have returned home following recovery from her injury if it had not been for Covid.
28. The Council appears to have treated the company’s email of September 2021 as an appeal and in December 2021 it wrote to Ms A stating it had reviewed the case and the appeal. The Council’s view was that due to the timeline of events the property was put in trust after Mrs Y’s diagnosis of dementia, and this deprived her of an asset which could be used to fund her social care needs.
29. The Council said it had paid the first 12 weeks of the care home fees as per the Care Act 2014. Therefore, Mrs A was liable to pay the fees from January 2021. The Council offered the family a deferred payment agreement, which allows the Council to claim back money towards fees when a property is sold.

Analysis

30. My view is that the Council’s correspondence explaining its decision was not adequate, because it was not in accordance with the CSSG. The Council considered the timing of the disposal of the assets and whether there was a reasonable expectation of the need for care and support. However, it did not show that it considered whether the transfer of assets was a significant motivation. This was fault. The Council should have considered motivation and set out how it considered it when explaining its decision. This fault caused injustice to Mrs A and her representatives because they could not know the Council’s reasoning regarding this factor, and therefore did not have sufficient information in order to appeal.
31. The Council’s decision of January 2021 did not give sufficient detail of its reasons and did not explain how Ms A might appeal of complain if she was dissatisfied. This was fault.
32. There were delays by the Council in considering the company’s appeal made in March 2021. The Council appears to have taken little action between March and September 2021. The Council finally reviewed its decision in December 2021, but did not address the issue of motivation. This was fault.
33. In its response to my enquiries the Council offered to review its decision and ensure that it considers motivation.

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Agreed action

34. I recommended that the Council should review its decision within one month of my final decision. The Council should ensure that it considers motivation, and it should explain its reasons in writing. The Council should take account of the CSSG and the Ombudsman’s guidance for practitioners, “Deprivation of Capital” issued August 2022. The Council should also address the grounds Ms A raised regarding the reasons for Mrs A being admitted to the home.
35. Within one month of my decsion the Council should remind officers that they should address the issue of motivation when considering deprivation of assets cases.
36. The Council should provide us with evidence it has complied with the above actions.
37. The Council has agreed to the remedy proposed.

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Final decision

38. The Council has agreed to remedy its fault. I have completed my investigation and closed the complaint.

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Investigator's decision on behalf of the Ombudsman