Decision Date: 15th October 2019
What Happened
Mrs Y complained on behalf of her mother, Mrs W.
Mrs W had a diagnosis of cerebrovascular disease since 1995 and essential hypertension since 2012.
Mrs W moved into a retirement flat in April 2014, as her bungalow was no longer suitable for her.
Mrs W had no need for care and support services at the time. However, she had a history of falls (two) and had a warden call service in place.
In January 2015 Mrs W created a trust under which ownership of the retirement flat transferred to the trustees.
Mrs W lived in residential care since early 2018. Her health declined to the point where she lacked the capacity to manage her own finances.
Mrs W’s daughter, Mrs Y, contacted the Council in November 2018 saying her mother’s capital was falling to £23,250 (the upper capital limit- anyone over the limit can be expected to pay the full cost of their care).
On 7 March 2019 the Council wrote to Mrs Y. It said it had reservations about the purpose of the trust her mother had placed her flat into. The Council suspected that Mrs W had deliberately deprived herself of an asset, in order to reduce her care costs.
The Care and Support Statutory Guidance 2014 sets out rules and procedures a Council should follow when considering deprivation of assets issues.
A
local authority should consider the following before deciding
whether deprivation for the purpose of avoiding care and support
charges has occurred:”
“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?”
“did
the person have a reasonable expectation of needing to contribute
to the cost of their eligible care needs?”
- If
the local authority decides that the person did
deliberately deprive themselves of an asset:- “As
a first step, a local authority should seek to charge the person
as if the deprivation had not occurred. This means assuming they
still own the asset and treating it as notional capital or
notional income.”
- “As
The Council said Mrs W’s choice of a retirement flat was influenced by it being in a complex with a warden call service and closer to family who could provide more support if needed.
It noted Mrs W had a history of falls and a warden call service. It said her medical history “suggested it was very likely she would need care in the future and indeed, relatively shortly after moving into (the retirement flat) her condition started to deteriorate significantly”.
The Council said it tried to find out what prompted Mrs W to set up the trust, but it appeared no one could say for sure. It said Mrs Y’s statement that another company had set up the trust, rather than Mrs W’s long-term financial advisor, contradicted the claim that the trust was part of long-term estate planning.
It therefore concluded that Mrs W had deprived herself of the asset, so it would treat her as still having the capital of around £120,000.
Mrs Y complained to the Council about its decision.
When the Council replied it referred to the Guidance. It said:
- that
Mrs W was 84 in 2015, and had a history of Occupational Therapy
involvement and falls
- her
medical history suggested Mrs W was not fit and healthy in 2015;
- that
Mrs W moved to accommodation where she could receive support when
needed, and the other above reasons, meant she could
have foreseen the need for care and support;
- that
the trust was for the benefit of family members, Mrs W remained
living in the property and the financial assessment form stated the
property was put into the trust “for zero consideration”. These
factors supported the likelihood that avoiding charges for care was
a significant motivation in creating the Trust;
- it
had been Mrs W’s responsibility to provide guidance to trustees
(which include Mrs Y) on the reason for creating the trust. But it
considered Mrs Y’s explanation, that it had been part of Mrs W’s
“estate planning over decades”, was not definitive about the
motivation to create the Trust.
What was found
Mrs W depriving herself of a capital asset (her bungalow) when she set up the Trust in 2015 was not in dispute. The only dispute was over the Council’s decision that she did this deliberately to avoid care costs.
The Guidance says Councils should address two questions before deciding whether deprivation to avoid care charges has occurred.
The LGO highlighted that the Council had addressed the first question, whether Mrs W could have had a reasonable expectation of needing care and support. It considered that she did; highlighting her consideration of having a warden onsite, her history of fall etc.
However, it did not address the second question, whether Mrs W had a reasonable expectation of having to contribute towards the cost of her eligible care needs. That was fault by the Council.
The LGO therefore recommended that the Council reconsider its decision on the deprivation of Mrs W’s capital, addressing all the questions in the Care and Support Statutory Guidance.
Points for the public, councils, service users and families
What puzzles us about this report is what possible purpose could there be in opening the question of whether she had a reasonable expectation of having to contribute to the cost of her care? We cannot conceive of why anyone would have NOT thought about the cost of care.
We are also puzzled about how a retirement flat could ever be put in trust, because as far as we are aware, one buys a lease which is subject to the need to seek consent to assignment. We note that the LGO report added this comment to the report:
“While the council believes it has already followed appropriate procedures for reaching its conclusions about whether the individual had a reasonable expectation of having to contribute towards the costs of Mrs W’s eligible care needs, it has agreed to reconsider its decision.”
The full Local Government Ombudsman report of City of York Council’s actions can be found here
https://www.lgo.org.uk/decisions/adult-care-services/charging/19-004-193