Lincolnshire County Council not at fault for finding a deliberate deprivation of assets

Decision Date: 11th October 2019

What Happened

Mr X complained on behalf of his late mother, Mrs X. He complained that the Council wrongly decided that there had been a deliberate deprivation of her assets to avoid care charges.

Mrs X had been self funding her care since September 2014. A year later the Council assessed her capital as £23,232.45, and decided it should make a contribution to her care costs.

Mrs X’s care costs were paid by the NHS on account of her qualifying for Continuing Healthcare (CHC) from 15 July 2016 to 4 December 2017.

The Council said that Mr and Mrs X ‘would’ have been aware that funding could be subject to change in the future, because one can of course lose one’s CHC status, but Mr X said he was not.

On 21 October 2017 the CHC reviewed Mrs X’s case and said she was no longer eligible for funding, and it would stop in December.

Mr X completed a financial assessment in November 2017, which showed her capital to be £22,418.04. The Council said she would not have to contribute to her care costs from capital.

In December 2017, Mrs X’s assets reduced to just over £9000.

In March 2018 the Council queried some of the information provided by Mr X in his mother’s financial assessment form. It asked him to explain why a number of withdrawals had been made from Mrs X’s account during a period when she was receiving care.

The Council referred to payments and withdrawals amounting to over £18,000 over an eighteen-month period.

Mr X responded to the Council in April 2018. He said that he had bought his father a car before his Dad died, so that they could both care for Mrs X. He also said that it was his father’s dying wish that this, ‘should carry on after he had gone.’

Mrs X died in August 2018.

The Council responded to Mr X in September 2018 saying that it had found that there had been a deprivation of £19,372.82 by way of ‘unreasonable expenditure and gifting’.

It said Mrs X should have paid the full cost of her care for a period of 224 days. It arranged to send Mr X a revised bill.

Mr X contacted the Council, disputing its findings.

The Council responded again in late September 2018 with a breakdown of the expenses it considered were over and above what was ‘allowable’. It said, in summary;

  • They were made up of cash gifts, large items purchased and gifted, and running and upkeep of a car that was not Mrs X’s
  • It noted that there were a number of taxi fares for Mrs X and queried why these would be necessary if Mr X was using his car with the purpose of caring for his mother.
  • It had given consideration to the responsibilities of a person acting with Lasting Power of Attorney and that consideration had been given to the Office of Public Guardians guide to gifting.
    • It said the gifts made were not of a reasonable value. It said they were therefore “unlawful” and constituted Mrs X’s depriving herself of assets or being deprived of assets.
  • The Council allowed for a certain amount of gifting. It accepted that Mrs X would have wanted to provide birthday gifts to relatives. It allowed for money to be spent on an anniversary gift, on a birthday gift for Mr X’s wife and it allowed some Christmas gifts, among other things.

Mr X responded in October 2018. He went through the Council’s calculations in detail, explaining that any money that had been spent was spent either to fulfil his father’s death-bed wishes or because his mother wanted to spend this money on her family.

There were a few payments that he accepted could be viewed as a deprivation of assets, such as the tumble-dryer and flooring, among others (they were bought for his use, not his mother’s) He accepted the balance of £2462.48.

The Council replied in November upholding its decision. Mr X complained.

The Council replied again, in what the LGO considered to be a ‘full reply’, setting out its calculations and why they decided Mrs X would have to pay for her care between December 2017 and August 2018. It concluded by saying Mr X must pay an invoice for that care.

The LGO was satisfied that the Council provided sufficient evidence for its conclusions.

What was found

Overall, the LGO considered that the Council demonstrated that it considered all the information sufficiently, and did so in line with its statutory duty. Therefore the LGO did not find the Council at fault.

Mr X should have been aware that there was a possibility Mrs X would have to contribute to her care costs if she lost CHC. She had had to contribute at one point, before health funding took over for over a year. During that period, Mrs X’s assets were reduced significantly, so that she was below the threshold for payment towards her care when the time came.

The Council did allow for some gifting but Mr X paid large sums of money to himself and his brothers. Two sets of these payments could not have been for birthdays or Christmas as they were double payments.

The evidence also indicated large sums of money spent on car maintenance and on a new car. While it may have been Mr X’s father’s dying wish that Mr X should continue to use a car to help his mother, there were also a number of taxi bills that did not suggest that the car was consistently utilised in that way. Therefore the LGO said that the Council took a reasonable view that this constituted deprivation of assets.

The LGO concluded that the Council thoroughly considered the information Mr X provided about how Mrs X’s money was spent. It considered that there was a large sum of unreasonable expenditure and gifting. It was not at fault.

Points for the public, social services and service users and families

  • The only thing that we would like to query from this report is whether it can ever be fair to find someone has deliberately deprived themselves of their assets, when it wasn’t THEM, but their attorney.
  • A person with a power of attorney may still have mental capacity, and may well be driving the expenditure because their own wishes would be to benefit their loved ones.
  • On the other hand, a person may well lack capacity – and in that situation, whilst the attorney has every power to act in the person’s best interests, and have POWER to spend the money (because in legal terms, vis a vis third parties, the attorney acts as AGENT with power to BIND the principal on contracts), it seems to CASCAIDr that it is not necessarily right to impute the actions of the agent TO the principal for the purposes of penalising the person with a decision that they possess money that they do not actually HAVE – ON THE BASIS of what has to be a justified decision regarding ‘deliberate’ deprivation of assets. It may be that NAFAO, the Finance Officers’ Association has taken legal advice and that the advice was to the effect that the acts of the agent area always to be taken to be the acts of the principal – for ALL purposes.
  • If the lady had lived to challenge the charge levied, by judicial review proceedings, as others have done, there would have been a judicial determination of this question of intention and deliberateness. The LGO cannot actually make decisions of legal precedent effect, because the LGO has a limited jurisdiction regarding fault and injustice findings.
  • We think that the council needed to consider the capacity of the actual owner of the assets, and then consider reporting the attorney to the Public Guardian, which could have taken steps to apply to the Court of Protection under s22 of the Mental Capacity Act to revoke the power. There is a good case where this was done by Bromley council in 2015 – and the court said this:
    • Even if the mother had had capacity to make gifts at the time, undue influence would be presumed because: the gifts were so substantial that they could not be accounted for by ordinary motives; there was a relationship of trust that placed B and G in a position to exercise undue influence; they had failed to ensure that independent advice was made available to their mother. B and G were also in breach of their fiduciary duty. B and G had behaved in a way that contravened their authority and was not in their mother’s best interests. Bromley did treat the woman as having more assets than she had left, but that was what triggered the police action. The council was appointed deputy with authority to try to restore her assets. The report does not say what happened to the money improperly distributed, however; only the council would have benefited from getting it back….
  • If Mrs X’s estate was liable for the charges, on the footing of assets that she no longer had, then the estate would have an action for undue influence against the attorney, but that would not have been likely to have been pursued by Mr X, if he was the executor. So Police Action then may be the only thing to do, under the Fraud Act, which covers abuse of a position of trust.
  • We are unsure, therefore, of the legal rectitude of this LGO report.

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The full Local Government Ombudsman report of Lincolnshire County Council’s actions can be found here

https://www.lgo.org.uk/decisions/adult-care-services/charging/18-013-220