Summary: Mrs B complained that the Council wrongly assessed Mrs D’s capital when her property was sold. This meant it treated Mrs D as a self-funder, liable to pay her own care charges for a year longer than she should have done. It also delayed in reinstating the council-funded contract and continued to send invoices to Mrs B. We found fault with the Council’s actions. If it had correctly assessed Mrs D’s interest in the property she would have remained on a council-funded contract and would not have had to pay any of her care charges beyond her assessed contribution. The Council has agreed to pay her a total of £3,500 and explain the recent invoice for £16,000.

The complaint

1. Mrs B complained that Stockport Metropolitan Borough Council (the Council):
• in respect of her mother, Mrs D’s financial assessment, wrongly calculated the proportion of the property she owned when entering into a Deferred Payment Arrangement (DPA) for care home fees. This meant when the property was sold in December 2021 the Council wrongly treated Mrs D as a self-funder and Mrs B had to pay over £35,000 in care fees for Mrs D to stay in the care home.
• delayed in arranging a council-funded contract (only confirmed at the end of April 2023). This caused Mrs B significant distress and confusion at a difficult time as she continued to receive invoices for the fees at a much higher rate.
• delayed in accepting and rectifying the error.
2. Mrs B was caused significant distress, inconvenience and financial hardship over a prolonged period.

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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 an injustice, 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(i), as amended)

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How I considered this complaint

5. I have considered the complaint and the documents provided by the complainant, made enquiries of the Council and considered the comments and documents the Council provided. Mrs B and the Council had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.

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What I found

Charging for permanent residential care

6. The Care Act 2014 (section 14 and 17) provides a legal framework for charging for care and support. It enables a council to decide whether to charge a person when it is arranging to meet their care and support needs. When the Council arranges a care home placement, it must follow the regulations when undertaking a financial assessment to decide how much a person must pay towards the cost of their residential care.
7. The financial limit, known as the ‘upper capital limit’ (currently £23,250), exists for the purposes of the financial assessment. This sets out at what point a person can get council support to meet their eligible needs. People who have over the upper capital limit must pay the full cost of their fees. Once their capital has reduced to less than the upper capital limit, they only have to pay an assessed contribution towards their fees. Where a person’s resources are below the lower capital limit (currently £14,250) they will not need to contribute to the cost of their care and support from their capital.

Deferred Payments

8. The Deferred Payment Scheme is designed to help residents in care homes who have been assessed as having to pay the full cost of their residential care due to ownership of property and have savings of less than £23,250 but are unable to make payments in full as their capital is tied up in their property. As part of the scheme a council enters into a contract with the care home to pay the difference between the assessed contribution and the full cost and places a charge on the resident’s property to recover its costs later when the property is sold.

What happened

9. In 2004 Mrs D made a declaration of trust splitting the proceeds of her property 50:50 with her daughter (Mrs B) and son-in-law. Mrs D had bought the property under the right-to-buy scheme with the help of her son and daughter-in-law.
10. In August 2015 Mrs D went into residential care and became a permanent resident in December 2015. She entered into a DPA for the care fees creating a charge on her property. Mrs B’s solicitor asked the Council to clarify its view of Mrs D’s interest in the property. Due to the right-to-buy discount and the help from her daughter, the Council decided that Mrs D had a 65% interest in the property.
11. On 26 November 2021 Mrs D’s property was sold. The Council calculated the amount due to Mrs D based on the 65:35 split and invoiced her for the charges which had built up since 2015. It concluded that even after paying the charges, Mrs D had more than £23,250 left so she would now have to pay the cost of the care home fees on a self-funding basis. It advised Mrs B to contact the Council when her savings fell below £23,250.
12. Mrs B started to pay the care charges on behalf of Mrs D. She received reminders and a final notice warning of court action to pay the invoice for the deferred care charges. On 25 April 2022 Mrs B’s solicitor paid the invoice in full.
13. In October 2022 Mrs B wrote to the Council raising a possible error with the way the Council had interpreted the declaration of the trust and Mrs D’s interest in the property. The Council replied saying that its original decision that Mrs D had a 65% interest in the property was correct.
14. On 9 November 2022 Mrs B wrote again to the Council saying that its decision was unlawful, and Mrs B had paid nearly £30,000 in care home fees for Mrs D as a result of the error.
15. In January 2023 the Council wrote to Mrs B agreeing that its decision in 2016 that Mrs D had a 65% interest in the property was wrong and without legal basis. It apologised for the length of time it had taken to rectify, along with the stress and confusion this had caused. It agreed to put a council-commissioned contract in place backdated to 13 December 2021. It said it did not affect the invoice for the accrued care charges as that was still less than Mrs D’s correct share of the proceeds of the property or her assessed contribution for care (as this was based on her income alone). It also said it would liaise with Mrs D’s care provider to ensure it refunded to Mrs B the care charges she had paid since 13 December 2021.
16. The Council allocated the case to a social worker to put the council contract in place.
17. In the meantime, Mrs B continued to write to the Council requesting a refund of the incorrectly paid care charges. The Council replied saying it would ask the care provider to refund the charges once the contract was in place.
18. The Council wrote to Mrs B on 28 April 2023 confirming the contract was in place, apologising for the delay in this process and saying it had written to the care provider requesting a refund of the fees paid since December 2021.
19. In June 2023 the care provider said it had written to Mrs B to arrange a refund but there was a disagreement over the amount due. On 27 June 2023 it confirmed it had paid Mrs B approximately £34,000. Mrs B’s solicitor believes this is wrong and the care provider owes Mrs B around £3,400.
20. The Council has also sent Mrs B a reminder for an invoice for £16,000 with no explanation what it is for. This has caused Mrs B further distress and confusion. Her solicitor has clarified that it is for Mrs D’s assessed contribution from 13 December 2021, which was mentioned in principle (but without any detailed figures) in the Council’s letter of 28 April 2023.

Analysis

21. The Council accepts its decision on Mrs D’s share in the proceeds of her property sale was wrong. Had it correctly assessed her interest in the property in 2016, she would have had less than £14,250 of savings left, following payment of the invoice for deferred charges in December 2021. So, she should have remained on a council-funded contract paying only her assessed weekly contribution. Even when the Council accepted its error, it delayed in putting the backdated council contract in place, which exacerbated the injustice to Mrs B.
22. Mrs B would not have had to pay the care fees for Mrs D for a further year at significant cost. Neither would she have spent significant time and trouble writing to the Council to challenge its decision or employ a solicitor to challenge the Council and the refund from the care provider. These matters remain unresolved and she is still receiving invoices for large amounts of money from the Council.
23. Her solicitor’s costs to date are approximately £3,300.
24. This was fault which caused Mrs B financial loss, distress and confusion. If the Council had correctly assessed Mrs D’s interest in the property in 2016, none of this would have happened.

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Agreed action

25. In recognition of the injustice caused to Mrs B, I recommended the Council, within one month of the date of my final decision:
• apologises to Mrs B;
• provides an explanation and breakdown of the recent invoice reminder sent to Mrs B for £16,000; and
• pays Mrs B £500 for her distress, and £3,000 towards her legal costs and recognition of the loss of access to a significant amount of money for over a year.
26. The Council has agreed to my recommendations. It says it has made significant improvements to the way decisions of this type (involving a property in a financial assessment) are made. The Council should provide us with evidence it has complied with the above actions.

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Final decision

27. I consider this is a proportionate way of putting right the injustice caused to Mrs B and I have completed my investigation on this basis.

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Investigator's decision on behalf of the Ombudsman