Wiltshire Council at fault for inadequate financial assessment, and concluding that there had been a deliberate deprivation of assets

Decision Date: 4th December 2019

What Happened

Mrs B complained on behalf of her father Mr C, who had Parkinson’s disease.

The dates are important in this report, so we have highlighted them.

Up until 2013, Mr C’s wife (Mrs C) had been informally caring for him. Over the years there had been communication between Mrs B and the Council discussing support for Mr C – for example he needed a level-access shower.

After a stay in hospital Mr C was successfully discharged without any care plan, and a month later in July 2013, a social worker visited Mr and Mrs C for a benefits check. The social worker completed applications for higher rate attendance allowance for Mr C and attendance allowance for Mrs C in September.

In late 2013 Mrs B contacted the Council to say that her mother had a serious illness. She explained that Mrs C was struggling as Mr C’s main carer due to her own care needs.

An initial assessment was undertaken in October 2013, and a support package was put in place for four weeks to help Mr C with dressing / undressing, bathing, getting in and out of bed, food preparation and taking medication, but was cancelled after one further month, following a review.

The LGO’s report did not explain why it was cancelled, or who by.

The Council undertook a financial assessment (no indication as to the date of the assessment), to determine whether Mr C would need to contribute towards his care (again, it was unclear from the report why they assessed his finances after the support plan had already been cancelled.) The Council assessed Mr C’s income and concluded that he would not have to make any financial contribution, because the house the couple lived in was not relevant to charges for care at home.

In December 2013, Mr and Mrs B bought their present home which had an annex next door, converted from a former stable building and treated as a separate dwelling. They bought the home with the intention of converting the annex as a space where Mr and Mrs C could one day live, to be close by for any support they needed.

In order to purchase their present home and its annex, Mr and Mrs B extended the term of their mortgage by 12 years and increased their own mortgage amount by £300,000.

Extensive renovation works were needed to convert the annex from an inaccessible two-storey dwelling to an accessible single-level dwelling suitable for a person with disabilities. Mr B saved up receipts totalling £69,402.13.

Mr C was admitted to hospital again in late March 2014. When he was discharged in April, his needs were reassessed (as his previous care package had been cancelled), and the Council agreed to put in a twice-daily care package.

Mr and Mrs C moved into the annex on 6 October 2014.  The Council completed a further assessment of Mr C’s needs. He declined respite care but said he would consider using day care that was discussed.

It is not clear whether he then received any social care at all. The couple’s daughter later contended that it was not foreseeable that he would need care, and thus potentially be charged, but it is not possible to tell from the report what the actual position was about services between October and November or between October and the following February where the couple’s previous home was sold.

On 7 November 2014, Mr and Mrs C signed a deed putting their previous home into Trust and agreed that 90% of the net proceeds of the sale of their home would go to Mrs B. The remaining 10% would go to Mr and Mrs C (or the surviving partner).

The house was sold in February 2015. £78,892.92 of the net sale proceeds were paid to Mr and Mrs B, with £8,765.00 paid to Mr and Mrs C.

Mrs C passed away in April 2015. Mr C inherited the money from Mrs C.

The Council reassessed Mr C’s needs in April 2015 and agreed to providing “double-up” care. The report did not indicate how long exactly the support was planned for, but the Council arranged to review his needs in September, where they authorised his support plan for a further 26 weeks.

The financial assessment process did not begin until 2017 – for reasons unexplained. The Council asked Mrs B for details of the equity release from Mr and Mrs C’s former home, and for verification of the conversion of the annex.

The financial assessment was finally completed in 2018.

  • It decided that Mr C should be liable for the full costs of his care from February 2015.
  • Having regard to the guidelines on deprivation of assets, it considered that, at the time the property was sold, Mr C would have had a reasonable expression of the need for care and support.
  • It noted that some of the proceeds of the sale had been used to adapt the annex, but that Mr C had acquired no legal interest in the annex.
  • It concluded that there had been deliberate deprivation of assets and that Mr B was liable for the cost of his care.

There followed further correspondence between the Council, Mrs B and her solicitor. However, the Council maintained its position but continued to fully fund Mr C’s care.

What was found

The LGO recommended that the Council review its financial assessment of Mr C.

Mr and Mrs B explained that the work to convert the annex from an inaccessible two-storey dwelling to a level-access dwelling suitable for a person with a disability was substantial. However, the Council only took into consideration receipts totalling £7,564.56, despite on several occasions Mr and Mrs B providing receipts totalling £69,402.13 for the full cost of conversion. The LGO did not recite what the council’s reasoning was for only considering that small, specific portion of the conversion costs.

The Council also questioned why there was no change in ownership to reflect the payment to Mr and Mrs B. Mr and Mrs B explained that with a mortgage of £300,000 on their overall home it was unlikely that the mortgage lender would consent to a change in ownership.

Moreover, Mr and Mrs C would have been unable to place a second charge on their own property, as there was already an encumbrance on the property due to earlier equity release.

Mr and Mrs B explained that the reason for the Trust was to make sure that they were reimbursed for the money they spent on renovating the annex. They said the Deed of Trust was not 100% in their favour, which was indicative of repayment rather than an attempt to circumvent the rules. They received £78,892.92 and provided receipts for the works totalling £69,402.13.

Mrs B stated that had the annex not been converted she would have been unable to provide support to her mother and father, so the cost to the public purse would have been much greater.

The Council explained that in carrying out the financial assessment it took into account the receipts for conversion costs totalling £7,564.56.

However, it said it would have expected Mr C to have retained a share in the annex and / or the sale proceeds.

The LGO concluded that there was fault in the way that the Council undertook its final assessment because it only took into consideration receipts for works undertaken totalling £7,564.56. It did not consider the receipts totalling £69,402.13 which Mr and Mrs B provided on several occasions.

Furthermore, at the time that Mr and Mrs C sold their home, they each had an equal share in the property. The Council should therefore have considered the question of deprivation of assets separately in respect of Mr and Mrs C’s shares. It had not done so and this was fault.

Given the substantial difference between the two sums, the LGO recommended the Council reviews its financial assessment. It recommended the Council

  1. review its decision in light of the fact that Mr and Mrs C owned equal shares in their former home;
  2. reconsider whether some or all of the renovation costs should be excluded from the calculation of Mr C’s capital;
  3. once it has completed the review, consider whether there has been any fault causing injustice which would warrant a remedy.

Points for the public and for charging officers

This complaint brings out the fact that the Care Act made deprivation of assets an issue for those needing to pay for home care, not just care home care.

What puzzles us about this report is that the law is that the value in one’s property is not relevant to financial assessment if it would be disregarded anyway.

From what we can tell, the value of the couple’s property would not have been relevant to any financial assessment at the time the man received services, because he was always receiving care at HOME.

Yes, of course we see that the property money was turned into cash, when it was not his main or only home, but if the couple had been bridging in order to move when they needed to, that would have given rise to a debt related to accommodation. It does not appear to have been foreseen that Mrs C would die so soon after moving into the annex with her husband.

To our minds, the man and his wife arranged their finances in order to pay for somewhere to live. If, say, he had merely promised to pay his daughter the money by way of rent over the rest of his life, it would not have been relevant, at all – it would have been a legitimate commitment for housing costs. Paying her back for converting it, could never be seen as deliberate deprivation of income OR capital assets in our view.

Yes, they entered into the trust deed AFTER the move, and that was a disposal of the bulk of the remaining equity, half of which was his.

And yes, the man probably knew that he needed support, when he entered into that trust, but the motivation was the antithesis of avoiding paying for care, as far as we can see.

Ultimately, he and his wife, whilst still his carer, needed support and he used their (and what became his) money, to obtain a place to live – an environment in which that support could be secured.

That does not seem to us to be a scenario where one could ever hope to justify concluding that the significant motivation for the disposal was the avoidance of a liability to pay for care!

The current Care Act guidance (which was not in force at the time when the Trust deed was entered into) says this:

11) There may be many reasons for a person depriving themselves of an asset. A local authority should therefore consider the following before deciding whether deprivation for the purpose of avoiding care and support charges has occurred:

(a) whether avoiding the 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?

(b) did the person have a reasonable expectation of needing to contribute to the cost of their eligible care needs?

There is also an example in the current guidance regarding ‘Max’ and ‘David’ which although about someone moving into a care home and then freeing up their share of the previously owned property, seems to us to be in point:

At the time the property is sold [for this, read the Trust Deed was entered into..], Max’s 50% share of the proceeds could be taken into account in the financial assessment [for Max’s services in the care home], but, in order to ensure that David is able to purchase the smaller property, Max makes part of his share of the proceeds from the sale available. [We think that this is comparable to agreeing to repay the expenditure on conversion of the property]

In such circumstance, it would not be reasonable to treat Max as having deprived himself of capital in order to reduce his care home charges.”

It does not seem to be lacking in credibility either, that the Trust, rather than a loan repayment agreement, was needed, because if there could be no second charge on the property the couple had previously owned (equity release is often geared to take up the whole of the value of the property) the expenditure by the daughter and son in law for the benefit of the parents, would have been unsecured.

The only point we would make is that the couple put a lot more into Trust than was needed to repay the debt, but the LGO says nothing about that. We think that that extra would have been an appropriate amount to pay by way of a reasonable fee for 6 months’ occupation of the annex prior to the freeing up of the proceeds of sale – and indeed, the owners had increased their own mortgage to make this project work.

So, overall, we are astonished that this approach was taken by the council – and applaud the LGSCO’s implicit engagement with the question of significant motivation.

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The full Local Government Ombudsman report Wiltshire Council’s actions can be found here

https://www.lgo.org.uk/decisions/adult-care-services/assessment-and-care-plan/18-017-678