Summary: Ms X complained for her father, Mr Y, about the Council’s decision to find there was a deprivation of Mr Y’s assets when the family bought a life insurance bond following the sale of Mr Y’s home. There was no fault in the Council’s decision-making.

The complaint

1. Ms X complained for her father, Mr Y, about the Council’s decision to find there was a deprivation of Mr Y’s assets when the family bought a life insurance bond following the sale of Mr Y’s home.
2. Ms X said their solicitor gave the Council evidence there was no deliberate deprivation of assets. And Mr Y had funds in place which the family reasonably believed were enough to cover the costs of future care. However, the Council ignored this evidence and did not consider it.

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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 34H(i), as amended)

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How I considered this complaint

5. As part of the investigation, I considered the complaint and the information Ms X provided.
6. I made written enquiries of the Council and considered its response along with relevant law and guidance.
7. Ms X 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

8. 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, or a carer’s support needs. The charging rules for residential care are set out in the Care and Support (Charging and Assessment of Resources) Regulations 2014 and councils should have regard to the Care and Support Statutory Guidance.

Capital limits

9. The care and support statutory guidance confirms the upper capital limit is currently set at £23,250. Below this level, a person can seek means-tested support from the Council. This means the Council will undertake a financial assessment of the person’s assets and will make a charge based on what the person can afford to pay.

Deprivation of assets

10. The care and support statutory guidance states deprivation of assets occurs where a person 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. Assets includes capital and/or income.
11. A person can deprive themselves of capital in several ways. One way is to use assets to purchase an investment bond with life insurance. However, this will not be a deliberate deprivation of assets in all cases.
12. Councils should consider the following before deciding whether deprivation for the purpose of avoiding care and support charges has occurred:
• Whether avoiding care and support charge was a significant motivation in 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
• Did the person have a reasonable expectation of needing to contribute to the cost of their eligible care needs.

What happened

13. I have summarised below some key events leading to Ms X’s complaint. This is not intended to be a detailed account of what took place.
14. Ms X contacted the Council in 2023. She said Mr Y’s capital was about to fall below the upper threshold, and he would need help paying care home fees.
15. The Council started a financial assessment. Ms X told the Council about the sale of Mr Y’s home, and financial advice the family received about investing the sale money to cover Mr Y’s cost of living and social care fees.
16. The Council wrote to Mr Y’s family with the result of his financial assessment in May 2023. It calculated Mr Y will fall below the capital threshold in 2029. The Council said it would not help with care home funding, as Mr Y’s capital is above the upper threshold, so the family would need to make private arrangements. The Council included an investment of Mr Y’s money which the family made of just over £265,000 in its calculations.
17. Mr Y’s family complained via their solicitor (the solicitor) in August 2023. The solicitor said, while Mr Y does have a life policy, this is disregarded under the Care and Support (Charging and Assessment of Resources) Regulations 2014. As such, they said Mr Y’s capital is below the threshold and he needs urgent help with his care fees.
18. In its first complaint response, the Council gave a timeline of events which it said it considered when deciding there had been a deprivation of assets. This included:
• Mr Y’s Alzheimer’s diagnosis in 2016.
• His move to a rental property and then into supported living in 2018.
• The later sale of Mrs Y’s home.
• The family’s investment of the sale money in 2019, and
• Mr Y’s move into a care home in 2021.
19. The Council said, when Mr Y sold his home, half the money went to him and half to his daughters. It was clear he had an expectation of future care needs, as he was in a supported living placement and receiving the higher rate attendance allowance. He also had a diagnosis of Alzheimer's, which is a progressive disease. It was therefore reasonable to expect Mr Y would need care and support. The Council said its view was the family should have safeguarded the sale money Mr Y received to pay for his care needs. The Council therefore said the funds used to buy the investment policy was a deprivation of capital.
20. The solicitor wrote to the Council again in October 2023. They disputed the Council’s conclusion and sent further evidence. First, they said the Council’s timeline of events is wrong and Mr Y’s Alzheimer’s progressed very slowly. However, they said the COVID-19 pandemic hit Mr Y very hard, leading to a decline in his mental health and capacity which led to his move into a care home.
21. The solicitor said Mr Y could comfortably afford his home care and rent in 2019 from his income. The family anticipated Mr Y could meet most of the cost of residential care from his income. The family could pay the rest from an emergency fund containing enough to meet the shortfall for about seven years. The family did not anticipate Mr Y would survive in the long term, given his age and heart problems.
22. The Council responded in November 2023. It referred to financial advice the family received, which discussed the benefits of an annuity, which would provide a guaranteed income to meet all Mr Y’s future case costs. The Council asked why the family did not follow this financial advice.
23. The Council noted the family provided for seven years, but this money only lasted about two years of Mr Y being a resident in a care home. The Council asked for further financial evidence.
24. The solicitor provided the Council with details of the investment account and a will trust in December 2023. They said the financial advisor did not advise the family to take out an annuity, they said it was an option. The family chose not to take that option because they felt Mr Y had enough funds in his estate to cover care fees. The solicitor said Mr Y’s funds did not last as long as expected due to the COVID-19 pandemic, rising interest rates, and rising care home fees, which the family could not have foreseen.
25. The Council sent its final response in January 2024. It confirmed it reviewed the solicitor’s response and documents, but its decision stands.

My investigation

26. The Council told me the investment the family made is life assured for Mr Y’s daughters, as they did not anticipate he would survive long-term. This meant there has not been enough money available to meet Mr Y’s care and support costs. The Council considers this decision constitutes a deprivation of assets because Mr Y should be able to pay his long-term care costs from his capital.
27. The Council said Mr Y was living in supported housing, receiving care and support, when the family set up the life policy. Mr Y also had a progressive disease. The Council considers it is reasonable to expect his care needs would progressively increase, and the family was aware of his need for care and support.
28. The Council said it reviewed all supporting evidence the family provided, and considered the reason the family created the bond, Mr Y’s need for care, the associated costs, and the financial advice the family received. The Council still considers deprivation has occurred. It said funds to support long-term care should not be limited based on an estimate of life expectancy.
29. The Council recognised errors in its timeline of events. However, it said the adjustments to the timeline do not have a bearing on its decision.

Analysis

30. The Ombudsman’s role is to review whether councils follow correct procedures in making decisions. Where a council has followed the correct process, considered all relevant information, and given clear and cogent reasons for its decision, we generally cannot criticise it. We do not make decisions on councils’ behalf, or provide a route of appeal against their decisions.
31. Paragraph 10 of the Care and Support Statutory Guidance sets out what the Council should consider when deciding whether deprivation for the purpose of avoiding care and support charges has occurred. The Council is entitled to make a judgement about motive by considering whether the family had a reasonable expectation of having to pay care costs in the future.
32. The family clearly considered Mr Y’s future care needs, and the costs, when making the investments. And I appreciate the family could not have foreseen the impact of the COVID-19 pandemic, and rising inflation. However, the Council’s stance is that the family should not have tried to predict Mr Y’s life expectancy, or limited the amount of money set aside to only cover a certain number of years’ care, based on care rates at the time.
33. I am satisfied the Council reached a considered decision. I found the Council considered the reasons for, and the timing of, the investment when it decided to treat it as a deprivation of assets. I did not find the Council ignored the family’s evidence or failed to engage with the arguments raised.
34. I found no fault in the Council’s decision-making process. The Council has evidenced it did consider the circumstances in line with the guidance. I therefore cannot criticise it.

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Final decision

35. I completed my investigation. There was no fault in the Council’s decision-making.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman