Ombudsman’s Decision Date: 03 Jun 2019
In this case, Ms X complained that the Council wrongly required her late father to pay his full care home fees after his capital had fallen below the upper capital limit.
In deciding how much a person needs to contribute to their care fees, the Council must consider the upper and lower capital limits (the upper capital limit is currently £23,250 and the lower capital limit £14,250). People over the upper capital limit must pay the full cost of their residential care home fees by way of the charge, if the council has contracted for their benefit. If their capital has reduced to less than the upper capital limit, they only have to pay an assessed contribution towards their fees. The Care and Support Statutory Guidance states that in some circumstances a person may be treated as possessing a capital asset even where they do not actually possess it. This is called notional capital. Notional capital may be capital, for example, that the council concludes that a person has deliberately deprived themselves of, in order to reduce the amount of the charges they have to pay for their care. A person’s capital is therefore the total of both actual and notional capital.
Ms X’s father, Mr Y moved to a care home in 2009. He was above the upper capital limit and therefore had to pay the full cost, himself, privately.
Ms X had power of attorney and assisted Mr Y with his finances.
In July 2016 Ms X asked the Council for assistance as Mr Y’s capital would soon fall below the upper limit. In September 2016 the council began to carry out a financial assessment. This assessment could not be completed as the Council officer found that Mr Y’s bank statements showed apparent significant gifting of capital over several years. Ms X explained to the officer that her late mother had left half of the parental home to her, in her will, but when the property was sold, the proceeds of sale went into Mr Y’s account which is why she had been withdrawing money from his account over the years.
The case was subsequently referred to the Council’s legal department where a safeguarding investigation into possible financial abuse was recommended. A social worker visited Mr Y to discuss the discrepancies in his bank accounts, but Mr Y could not follow what was being said and asked to stop the conversation. After numerous strategy meetings by the Council, Officers remained concerned that Ms X had taken money from Mr Y which she was not entitled to and agreed further enquiries were needed.
The Council asked Ms X whether she would give up her role as Mr Y’s attorney given the concerns about how Mr Y’s finances had been managed. Ms X would not agree; therefore the Council contacted the Office of the Public Guardian (OPG) about suspending or cancelling the power of attorney.
The OPG visited Mr Y to assess his mental capacity to manage his finances, whereupon they concluded that Mr Y had capacity to make decisions about his finances (despite his earlier visits where he could not follow what was being said) and that Mr Y confirmed he was happy for Ms X to continue as his attorney.
The Council’s records stated that by the time of second case conference was held in August 2017 it was clear Ms X had deprived Mr Y of over £50,000. This record was made more than one year after the original request for assessment was made.
During a meeting between Council workers and Mr Y in the care home (Ms X also present) it was explained to Mr Y that Ms X had taken more than her share of the proceeds of sale (£54,000), to which information Mr Y responded by saying he had no knowledge of the withdrawals and had not given her permission. A later meeting with the police in March 2018 saw that Mr Y did not wish to make a complaint about Ms X, so police took no further action.
After a return visit from a social worker to Mr Y with copies of his bank statements, Mr Y stated he wanted the local authority to manage his finances, not Ms X.
The Council calculated that had Ms X only taken the half share of the proceeds of sale as she was entitled to do, Mr Y’s capital would have fallen below the upper limit by 22 March 2018. Mr Y continued to pay his full care fees until this date, and the Council then began paying the care home directly. Based on Mr Y’s income and savings, the Council assessed his contribution towards the cost of his care from 22 March 2018 would have been £262.98 per week. It would then have reduced to £117.45 per week from 21 April 2018 and then increased to £121.13 per week from 14 May 2018.
The Council continued to pay Mr Y’s care home fees until his death on 14 July 2018.
The Council completed its safeguarding investigation with the outcomes showing:
- Ms X withdrew large amounts of money that were not used for Mr Y’s benefit;
- Mr Y was dressed in second-hand clothes as Ms X did not provide him or the home with means to buy any clothes and he had no access to a personal allowance; and
- There was no evidence Mr Y had been able to give informed consent regarding how his money was being used and didn’t have access to his bank account statements.
The Council concluded, on the balance of probabilities, that Ms X had committed financial abuse against Mr Y.
Ms X made a formal complaint to the Council about the way it had dealt with her original request for assistance with Mr Y’s care fees. The Council confirmed they had not been able to complete the financial assessment in 2016 in a timely fashion because of the safeguarding concerns and stated they had not ever agreed to fund Mr Y’s care in 2016 because of the issues relating to financial abuse and would not backdate now. They stated that Mr Y’s assessed contribution for the period 22 March to 13 July 2018 totalled £2568.52 and remained unpaid.
What was found
In brief summary, the Council’s failure to fund Mr Y’s care home fees when his actual capital fell below the upper limit amounted to fault. This fault caused Mr Y an injustice which could not be remedied as he had since died. See further for more detail.
After a financial assessment of Mr Y in 2016, the Council identified that large sums of money had been transferred from his bank account to Ms X’s. In these circumstances the LGO would expect the Council to have considered whether Mr Y knew of and agreed to these payments. Records showed that officers were satisfied Mr Y had not known that Ms X was taking money from his account and had not given informed consent. The outcome of the safeguarding investigation was that Ms X had committed financial abuse against Mr Y. There no was suggestion that Mr Y had ever deliberately depreciated the value of his capital in order to reduce the amount he would have to pay for his care.
However, the Council had assessed Mr Y’s entitlement to assistance with the cost of his care based on his actual capital plus the notional capital of £54,000. This would have been correct if Mr Y had deprived himself of this money to reduce the amount he had to pay for his care, but that was not the case and amounted to fault.
The LGO also considered the council’s delay in obtaining legal advice and the safeguarding investigation amounted to fault. As did the length of time taken to complete the safeguarding investigation.
The LGO found that the Council did cause injustice, because if they had assessed Mr Y’s finances based on his actual capital and income, he would have been entitled to assistance in 2016. But in actual fact the failure to do so meant that Mr Y had to pay for his full care charges for longer than he should have. Unfortunately, as Mr Y has died, the LGO was unable to remedy the injustice.
The LGO found that it would be inappropriate to reimburse those fees to Ms X, as she had already effectively benefited from those funds. The LGO did however recommend that the council waive Mr Y’s outstanding care charges of £2568.52 (which the council agreed to).
Points for councils and services users, families and attorneys/deputies
- It regularly happens that an attorney or deputy, in acting in what they believe to be the best interests of their loved one, pays themselves or family members, sums of money as gifts – on the footing that they KNOW that their mum or dad or other relative “would have wanted us to have it”.
- The trouble with that is that the obligation to pay social care charges for care that is going to be provided is a legal obligation – not a contract, but an obligation arising from the legal framework for social care – and giving the owner’s assets away, even though the money does still belong to the person, is like defrauding the public of the contribution to how the whole system works.
- Councils can’t take the view that one has got notional capital if one’s attorney has done this, if one had no capacity to have understood that that was happening, or no means to stop it.
- If the person does still have capacity, (a power of attorney being operative, usually, even before that person loses capacity, as long as the person had envisaged the grant of the power operating in that way) they must be asked as part of safeguarding or financial assessment functions, what they think about this situation, and either to adopt it or distance themselves from it, and revoke the power of attorney that they granted, in the latter case. IF they do not do THAT, then the person can be regarded of acquiescing in the deprivation of assets. In that situation, the council can send the bill to the person who has actually taken possession of the money. If they do not do that, the council might then apply to the Court of Protection to remove the person who’s been doing this from the role of power of attorney, if they think that the person allegedly being taken advantage of is about to lose capacity, because then that person will have lost the power to revoke the grant of the power, and become more vulnerable.
- The council is not necessarily able to pass the bill on, or to sue an attorney (JUST BECAUSE OF THAT STATUS) for unpaid charges even where it has concluded the individual should be regarded as liable to pay on the basis of notional capital, and when that is a proper conclusion for them to have made, on the footing of a proper finding of deliberate deprivation of assets (not a finding that could be made in this case, for the reasons stated). Section 70 of the Care Act allows councils to recover the avoided charges from a transferee of the funds, but the focus is on where that was ‘the adult’ transferring to another person. One MIGHT say that the attorney’s action to benefit themselves amounted to a transfer by the PERSON (through the agency of the attorney) to ANOTHER, but the action is not against the attorney as attorney. It is an action against the recipient of the money. The claim is against the person or their estate, and then the person or estate must sue the attorney for breach of fiduciary duty FOR the individual who has been the victim of financial abuse.
- CASCAIDr has heard of a council using something called a Third Party Debt Order which freezes the bank account of someone who owes money TO the person liable for the charges, but we are unsure of the legitimacy of this remedy in the case of breach of fiduciary duty, unless it is admitted in full – it’s not otherwise a DEBT as far as we are concerned.
If you want help, please consider seeking advice from CASCAIDr via our referral form on the top bar menu of the site.
The full Local Government Ombudsman report of North Yorkshire County Council’s actions can be found here