Date of decision: 19 August 2025
Summary
A complaint was made that Lincolnshire County Council failed fairly to calculate notional capital following alleged deprivation of assets, leaving an individual to pay more care costs than necessary, and that it did not pay the care home in a timely manner, causing concern and financial pressure on the family.
What happened
On 19 September 2023, the family of a man, Mr D, sought Council funding assistance for care home fees, reporting savings of around £30,000 for the individual in need of care.
But between 28 September and 25 December 2023, £17,000 was gifted from this account. The Council requested evidence and reviewed the pattern and amount of gifting to determine whether this constituted deliberate deprivation of assets.
Mr X, acting as attorney for the person receiving the care, supplied evidence and argued that gifting over several months before meant that the more recent gifts should be considered routine and that they should be averaged yearly over the whole time Mr D had been in care, from a point in early 2022 (presumably as a self-funder). Mr D had been in the habit of making various financial gifts, through his attorney, previously [but it is not clear from the report whether that was when he first went into a care home, or from even earlier than that.]
The Council noted that the recent amount was over half of the individual’s remaining savings, and cited statutory guidance suggesting gifting should not undermine a person’s ability to pay for care.
The Council concluded that only £3,000 of what had been given away, recently, was reasonably allowable for gifting, with £14,000 therefore included as notional capital for means assessment. It noted too that the amount given away in the first year the man was in care was significantly higher than before he went into the care home, which was relevant to evidencing motivation, in its view.
Meanwhile, the Council did not pay the correct gross care home fees between 22 August and 2 September 2024, but acknowledged and corrected this after some delay: net payment (net of charges) occurred on 17 March 2025, with the full gross amount ultimately being paid by 14 July 2025.
The Council also reviewed claims about credit card payments, agreeing with Mr X that £4,342 of purchases for the individual’s benefit on Mrs D’s credit card on the same account were not to be treated as notional capital. The Council said ‘the amount gifted was over half of Mr D’s capital at a time he needed care and it was disproportionate given the guidance says ‘any gifts should not impact on a person’s ability to be able to pay for their care for the rest of their life and should be comfortably affordable’.
[This is not in fact a sentence that appears in the Guidance at all – we have checked – and we think that the officers and Ombudsman may have been misled by AI here]
Throughout, the Council’s assessment and decision process involved consideration of guidance, relevant law, and correspondence with the attorney. All findings and decisions were communicated, and the Ombudsman reviewed evidence from both sides.
What was found
The Ombudsman found the Council correctly followed the Ombudmsan’s own Guidance when calculating notional capital after alleged deprivation of assets, and reasonably assessed evidence on the gifts made, based on their timing, amount, and context. The Council’s delay and initial underpayment of care home fees were acknowledged as fault, but did not cause the family significant injustice nor affect the outcome.
Points to note for councils, professionals, people using services and their carers, advocacy groups and members of the public
The investigator used the Office of the Public Guardian’s guidance as to what gifts can reasonably be made by people acting as finance and property Power of Attorney holders. You can find that here. Amongst other things, it says this:
You have to think about:
• whether the person was in the habit of making gifts or loans of a particular size before they lost capacity
• the person’s life expectancy
• the possibility that the person will have to pay for care costs or care home fees in future (for example, whether their entitlement to NHS continuing care funding will be reviewed and could be removed if their condition is likely to improve – see ‘Deprivation of assets’)
• the amount of the gift – it should be affordable and no more than would be normal on a customary occasion or for a charitable donation
• the extent to which any gifts might interfere with the inheritance of the person’s estate under his or her will, or without a will if one has to be created
• the impact of inheritance tax on the person’s death
• the relationship between the person the LPA, EPA or deputyship order is for and the person the gift is for
• any record of the person’s wishes and feelings such as a will or preferences and instructions expressed in their LPA
The Ombudsman’s report addresses deprivation of assets and the calculation of notional capital, referencing statutory guidance and the responsibility of local authorities to determine if a person has intentionally deprived themselves of assets to reduce contributing to care costs. Community care case law and public law principles stress that charging and deprivation of assets decisions must balance individual autonomy over one’s ongoing ownership of the money with enforcing the statutory duty to fund care only where capital eligibility and means justifies public funding.
However, public law principles require councils to investigate motives and circumstances around asset transfers, individually, as a blanket approach to deprivation may conflict with a person’s right to use resources as they wish unless there is clear evidence of intent to avoid care charges. Routine or cultural patterns of gifting, payments for debts, or expenditure for wellbeing may not create a picture which meets the legal test for deprivation.
The Ombudsman’s factual summary could have given more weight to judicial interpretations requiring clear causative intent to avoid care responsibilities, as explained in community care law, we think, and to the conflict arising when the Attorney is a member of the family no doubt doing exactly what a parent would have been believed to have wanted him/her to do with their money!
The case law further underlines that applying statutory guidance on gifting requires context-sensitive discretion, taking account of family arrangements, the health status of the person at the time of gifts, and their freedom to make reasonable spending decisions.
Overly rigid local authority policies or failures to consider wider human rights—such as Article 1 Protocol 1 (the right to peaceful enjoyment of possessions) and Article 14 (discrimination on the basis of disability or age)—are cited in community care law as grounds for challenge, and these are less clearly reflected in the Ombudsman’s legal analysis.
Please use the following link if you want to read the original Local Government and Social Care Ombudsman’s Lincolnshire County Council (24 018 530) report. If you are affected by the issues in this report, please consider asking a free, one-off question, anonymously, at a level of principle, here. Our experts’ response will give you an opinion which may then help you and the broader community, when posted.
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