Sefton Council not at fault in failing to carry out a financial assessment and charging the full cost of care

Decision Date: 20th December 2019

What Happened

Mr X moved into residential care in 2016. The report did not mention what support he was eligible for.

Mr X owned a 50% share in his home and his son, Mr Y owned the other 50% share. There was no detail in the report as to whether the son had jointly purchased the house from the outset, bought INTO the house later, for full value, or had been given the half he’d acquired.

Mr X paid for his care out of his savings until they dropped below the upper limit of £23,250 in July 2017. That same month, his daughter, Ms Z, applied for a Power of Attorney (POA) to take over her father’s finances as he had lacked the capacity to make financial decisions himself. The report did not say whether it was a lasting or enduring POA applied for.

The Council agreed to pay the full cost of Mr X’s care in September 2017 until the outcome of a financial assessment was known.

Mr X died in spring 2018, before Ms Z obtained authority to act under the POA with regard to the father’s finances.

The cost of Mr X’s care totalled £19,988.01. The Council provided invoices for the full charges in September 2018.

Mr Y complained to the Council in April 2019 about the invoices. He said the Council should not have included the property in assessing his father’s finances, as he owned 50% of the property. The report says that the son said it had passed directly to him when Mr X died, suggesting that they were joint tenants, as opposed to tenants in common and that he had since sold it.

The Council responded and denied any fault. It explained it had been unable to carry out a financial assessment because before a POA could be appointed and provide information, Mr X had died. Until it could carry out the assessment, it said, “there was no need to contact Mr Y as a joint owner”.

The Council offered to assess, based on the value of Mr X’s estate so as to calculate the care costs as they would have been, had it have been able to do this before Mr X’s death. As Mr X had owned 50% of the property before his death, the Council said it would include this proportion of Mr X’s property in the assessment.

What was found

After Mr X’s savings fell below the upper capital limit in July 2017, the Council could not assess what level of contribution Mr X should pay until a financial assessment could be completed.

This could not be completed until there was someone with legal authority to share the information.

Without information to show that Mr X had assets of less than £23,250, the LGO stated that the Council was ‘entitled to assume he had assets above this level, which would mean he would not be entitled to assistance with his care costs.

As he would then be self-funding he would need to pay the full amount of his care costs.’

And therefore the Council was not at fault for having charged the full cost of care, at least, at first.

The LGO stated that there was no requirement for the Council to discuss Mr X’s care charges with Mr Y before he died. Whilst Mr Y shared property ownership with Mr X, the Council would not have needed to know that until it carried out a financial assessment. This was not possible until a POA was arranged. Therefore the LGO found no fault.

As Mr X died before a POA was granted, the Council was unable to assess Mr X’s finances.

It appears that the council later offered to do this retrospectively if information from the estate were provided, which the LGO considered to be an appropriate offer. So there is no final outcome in terms of the charge that the council intended to levy in the end.

Points for the public, finance officers, service users, families and solicitors:

Thisreport, in our view, comes to the right answer that there was no fault on the facts, but for the wrong reason, in legal terms.

One does not APPLY for a PoA, or OBTAIN one, or get APPOINTED. One is given one, by a capacitated donor.

So, if the daughter was telling the truth in this case, she had either been granted an Enduring Power of Attorney before 2007, and just needed to register it, or she had been given a LASTING power of attorney under the Mental Capacity Act, but not registered it, OR she was actually applying for Deputyship, which is a different thing altogether.

The point is that if she had an Enduring Power of Attorney, she already had power to disclose the finances of her father, although given the certainty of his lack of capacity, she needed to register the EPA for going forwards with transactions.

If she’d already got an LPA document signed by her Dad, one that he’d given her when capacitated, she may well have been granted a power to operate the finances BEFORE loss of capacity (LPAs work that way unless amended) but she would still have needed to register it, before it came into force at all.

But we think that on that footing, she could at least have disclosed his finances on a best interests basis under the MCA and the law of confidentiality, because firstly nobody would have minded, and secondly because confidentiality is not an absolute doctrine.

Lastly, even if she was getting Deputyship from the OPG, the same point about disclosure would have applied.

We think that any competent council’s charging officer ought to know that the Guidance envisages deferring the assessment unless or until someone does have authority to share. It says that if none of the above was happening, (because you can’t MAKE a family member choose to take Deputyship on, it’s a choice) it’s the council who is obliged to take Deputyship in order to obtain authority to take over the finances, and pay itself, or else wait for someone to die and proceed against the estate for a debt based on having taken the contractual responsibility on, not having been ABLE to assess, but legitimately assuming full cost charges, on the basis of the absence of an assessment.

So in so far as the council did not actual do that, the jury is out, as it were, on whether this was because of ignorance or a cost benefit analysis as to whether it was worth doing that.

Whatever the reason, if one cuts to the real question, what should the man have been charged, we think that it would be perfectly reasonable to offer to assess retrospectively, when someone has died, without being assessed, in order to consider what decision the facts would have led to, had the information been available at the right time. Any executor who cannot get the council to agree to that stance is not really doing their job, in our view.

However, if that is what a council does offer to do, whether because of a complaint to the LGO or using its own initiative, we think that the LGO’s investigator could have mentioned the applicable principles for that assessment, once it became possible.

Any person who HAD owned less than the full amount of a property when in receipt of care, is entitled to a valuation by the council of that share, before there could be any actual retrospective charge at all.

The law has always acknowledged that a share in the name of someone else MAY have the effect of deterring any willing buyer from being objectively likely to be interested in buying the share of the service recipient.

When a couple buys a house, it’s usually bought on a joint tenancy, and the value of each share is considered to be half. But it’s not often important because the house is disregarded whilst the other person needs to live in the house. A couple may well sever the joint tenancy and become tenants in common later on, on separation or simply for estate planning, and this can make a big difference to how one’s assets pass.

On the other hand, when two or more people end up buying a house outside of an intimate relationship, a share is less than a half, and it’s usually on a tenants in common basis. The effect is that each person owns that particular SHARE, but the sale value of that share is not necessarily commensurate to the proportion reflected in the contributions of the co-owners.

We have to say that there’s no evidence that the son was really a joint tenant with his Dad, from the outset, but we can’t tell, of course. He would have acquired ownership of the property as soon as the Dad died, but that would not have affected the normal presumption that if you do own as joint tenants, each person’s share IS half.

What we can say is that if the son had bought into the house after its original purchase, or had been given a portion on paper as a means of avoiding inheritance tax, much earlier, (no suggestion of deliberate deprivation of assets being made) that valuation still needed to be done before any expectation of a valid charge could arise.

This report does not actually say that that was not what the council accepted or was going to use when doing the retrospective assessment, please note. It had only charged full cost on the basis of an assumption about ownership made BEFORE the man had died, and then seemingly stuck to that position without engagement with the executor, because they didn’t know who that was. We’re not probate practitioners, at CASCAIDr, but we feel sure that there must be a way of finding that sort of thing out.

In our experience, the charging officers’ sector well knows that the value of the person’s share may well be nil, but they don’t offer that information up. No charge is legitimate until a valuation has been done, unless one is positively refused, because the discretion to charge is subject to the financial assessment. One has to find a valuer, if one is the council, to make an objective discounted valuation, looking at the facts, regarding the likelihood of any willing buyer, if a council is going to maintain that the value of the share is not nil, in our view

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The full Local Government Ombudsman report of Sefton Metropolitan Borough Council’s actions can be found here