Kent County Council at fault for incorrectly backdating payments

Decision date: 12th September 2019

What Happened

Miss P had disabilities which affected her mobility, eyesight and other organs. She followed a special diet because of haemophilia and bowel conditions. Some of her conditions varied. She had a wheelchair, lift and adapted kitchen and bathroom.

She had a personal budget to employ a Personal Assistant for 10 hours a week to help with nutrition, showering, getting dressed, accessing the community and cleaning her home.

Miss P’s November 2017 care and support plan provided for a personal budget of £100.41 a week to buy 10 hours of support a week from Personal Assistants.

Her charges

Before May 2017 the Council assessed Miss P as a nil contributor towards the cost of her care. This was because her weekly assessable income (£160.45) from Income Support and DLA (Disability Living Allowance) was less than the Government’s Minimum Income Guarantee plus the Council’s standard allowance for disability related expenditure (DRE).

In May 2017 Miss P started receiving Employment & Support Allowance (ESA). The Council counted an assumed level of ESA as her income and wrote to her on 17 May saying she needed to pay £75.20 a week towards the cost of her care from 12 May.

The Council sent Miss P an invoice for £365.26. She wrote to complain, saying she could not afford to pay her assessed contribution.

When the Council replied in June it accepted it had made a mistake. The Council said she did not have to pay anything. (Miss P’s DLA had stopped which meant her actual ESA was lower than assessed).

By November 2017 the council was aware that

  1. her DLA and ESA had been stopped in error in January 2017;
  2. she had been appealing the decision since then;
  3. she had been surviving on a third of her income and deliveries from food banks.

Miss P’s separate benefits appeal over the decision to stop her DLA was eventually successful and it was reinstated as from 12 May 2017. Presumably, her ESA went back up too but one can’t tell from the report.

The Council found out about this successful benefits appeal in December 2017 but not from Miss P. She said the DWP must have told the Council about its decision before it told her; however it is unclear from the LGO report when exactly she became aware of the decision.

The Council completed a DRE assessment in January 2018 (£94.00 a week) presumably because the additional income now connoted a charge of some sort would be due, but decided not to approve the figure claimed in February. (The reasons why are explained below).

The Council received a complaint from Miss P on 6 March 2018, concerned with the charges she was being asked to pay.

The Council wrote to Miss P on 22 March 2018. It said at this point that she did not have to pay anything towards the cost of her care from 9 April 2018 because her assessed weekly income (using the old ESA figure) was a lot less than her weekly allowed income. However, that financial assessment did not take account of the DWP’s decision to reinstate DLA from 12 May 2017 even though the council knew about it.

The Council replied to Miss P’s complaint on 18 April.

  • It said it had completed a DRE assessment in February 2017 but turned it down because “hand splints and other equipment are no longer available on prescription”.

Comment: We have to assume from the report that the Council was saying that the equipment had been taken off of the national NHS prescription list, and this was evidence that they were not needed, just wanted.

  • It said counselling sessions related to health needs, so Miss P should discuss them with her GP, as the Council would not include the cost as DRE.

Comment: There is nothing to say in the Guidance that a person’s private expenditure on dealing with their health issues is not able to be seen as DRE. The implication may be that if it could be got for free from the NHS it is not appropriate to spend money on it, but it is not easy to get a GP to liaise with a CCG in order to release funds for forms of counselling that the GP might not appreciate the benefit of.

The Council said this meant she had to pay £72.92 a week from 16 May 2017 and £80.30 from 9 April 2018.

It said her weekly DRE allowance was reconsidered to be £19.28.

A week later the Council wrote to Miss P again on 27 April 2018.

It said she now had to make back payments of:

  • £10.47 a week from 12 May 2017 (based on assessable income of £181.20);
  • £72.92 a week from 16 September 2017, when Miss P started receiving the Severe Disability Premium of ESA (based on assessable income of £243.65);
  • £80.30 a week from 9 April 2018 (based on assessable income of £248.75).

The Council said it had not managed to ‘update’ Miss P’s financial assessment until April 2018 because it was reviewing her DRE.

The council’s separate reaction to direct payment obligations

The Council stopped paying money into Miss P’s direct payment account in April 2018 as well, seemingly on the assumption that, having received substantial back payments from the DWP, Miss P had enough money to pay for all her care.

Miss P said she borrowed money to pay her personal assistants.

Miss P wrote to the Council on 8 June 2018.

She explained about the problems she had had with her benefits during 2017. She said she could not afford the assessed charge and that asking her for retrospective payment “may be erroneous”. She said the Council was withholding her direct payments which may be discriminatory under the Equality Act 2010.

By way of response once the LGSCO got involved, the Council offered to waive 50% of the arrears and 50% of the assessed contribution for three months to allow Miss P time to adjust. It said it would continue to liaise with Miss P over her DRE to ensure an accurate reflection of her expenditure.

Financial re-assessment

In November 2018 the Council again reviewed Miss P’s DRE.

Miss P said she has to pay:

  1. £10 towards the cost of counselling arranged by her GP;
  2. for physiotherapy if she has more than the four free sessions;
  3. for surgical collars and splints, which the NHS used to provide free;
  4. for wheelchair insurance;
  5. for a special diet.
  • It agreed to increase its allowance on this account to £104.98 a week, which meant she did not have to contribute towards the cost of her care at all. [it also meant that she did not have the minimum income guarantee either!]
  • The Council said this would take effect from 12 June 2017, when it started to assess Miss P’s DRE, between two of the trigger dates for its previous claim to back payments of unpaid charges.
  • It said it would also waive charges between 12 May and 12 June 2017, so there was nothing for Miss P to pay.
  • However, the Council said it would review Miss P’s DRE again in three months as: “as many of the items listed are to support a health need rather than a social care need”.
  • The amount for DRE settled upon was £103 per week in the end, pending any progress with NHS funding for any of the additional items or services.

The policy point

Miss P said the Council was wrong to backdate her assessed charge in the first place, as backdated charges only applied to ‘new customers’.

The policy Miss P referred to had been agreed in November 2015.

The Council suggested that they could in fact backdate her charges, as they had learned about her changed financial circumstances (regarding the benefits) from another source. They referred to their Charging Policy for Home Care and Other Non-Residential Services for 2018-19 which said as follows:

  • “If a person’s financial circumstances change and KCC is not informed by the person or representative (e.g. not declared changes to disability benefits which meant KCC has been undercharging), changes will be backdated to the date the charge increase would have applied.

Comment: that has never been against the law, because one may be seen as chargeable for all one’s care services, unless one persuades a council that one can’t afford to pay, and that means that if one has not disclosed one’s improved financial circumstances, that cannot be used to defeat a retrospective charge. The Hooper case from 1997 is authority for that proposition, which the LGSCO’s investigator and the council both seem to be unaware of.

Recovering it may be a different matter, however, as the client may be able to defend themselves by reference to change of position, and the impact it would have on them to have to pay later, if they hadn’t appreciated the significance of the situation, themselves, at the time.

What was found

There were problems with Miss P’s benefits, for which the Council was not responsible.

Those problems had implications for her financial assessments. Until April 2018, effectively, she did not have to pay anything, but the Council had then applied backdated charges to May 2017, which it then waived.

The November 2015 policy reflected the fact that, following the implementation of the Care Act 2014, the Council was no longer prevented from backdating charges before “an assessment of charges had been notified to the service user”. Therefore, the Council was not prevented in legal terms from backdating charges when someone receives backdated benefits.

The Council was notified of the change in Miss P’s circumstances in December 2017. The relevant policy was therefore the one in place in December 2017 which stated:

  1. Charging will be from the start of the service and not from the start of the financial assessment. A person will not be charged before a financial assessment is completed (unless refusal to comply with the financial assessment process). The financial referral and assessment should be completed as soon as possible to avoid people being faced with large and unexpected bills. Where any arrears of charges are due, people should be given a reasonable length of time in which to pay.”
  2. “It is expected charges will not be backdated for more than 12 weeks BUT this can, in exceptional circumstances be extended, such as where a person/family deliberately do not cooperate.”

The Council took four months, itself, to complete Miss P’s financial assessment. It also backdated her charges for much more than 12 weeks without identifying any exceptional circumstances. That was fault by the Council.

The current leaflet on charges said they would be backdated whenever backdated benefits are received. However, the LGO considered that the Council could not fetter its discretion in that way. It suggested that the Council needed to review its policies and published statements on backdating (which is what public law principles would require in any event, so that’s good legal advice from the investigator in this report!).

Although the Council told Miss P what her charge would be in May 2017, it could not rely on this as finalisation of a financial assessment, as the question of her DRE was expressly left open. This meant she could not plan for any charge, as she did not know what it would be. The Council failed to take this into account when deciding to impose substantial backdated charges which put Miss P into debt. That was fault by the Council.

The Council also stopped paying money into Miss P’s direct payment account. This was on the assumption that having received substantial back payments from the DWP, she had enough money to pay for all her care and it could claw back the backdated charges in this way.

In effect, the Council withdrew Miss P’s direct payments. Under the Statutory Guidance the Council should first have reviewed Miss P’s needs. The failure to do so was fault by the Council. Reviewing Miss P’s needs would have enabled a more constructive engagement with her personal circumstances.

The decision to backdate charges and the failure to review Miss P’s needs before stopping her direct payments in April 2018 caused significant avoidable distress to Miss P, which was an injustice. This had a negative impact on her mental health.

The Council wrote to Miss P to apologise for the distress it caused and paid her £400. It will also pay her a further £300 to reflect the time and trouble it has put her to in pursuing the complaint.

Points for the public and for councils

In addition to the comments made above as side notes, it must be stressed that it is blatantly unlawful, and not just ‘fault’, to stop someone’s direct payments as a means by which to claw back claimed charges.

NAFAO the national association of finance officers’ own guidance makes it clear that this must never be done. Charges reclaims are only recoverable through legal process or agreement.

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 Kent County Council’s actions can be found here