Date of decision: 22 July 2025
Summary
A daughter, Mrs Y, complained that Staffordshire County Council failed to properly explain, calculate, and communicate her mother’s residential care charges under a Deferred Payment Agreement (DPA) in the context of jointly owned property. The investigator accepted the matter because the complainant had not realised Staffordshire’s errors until a long time after signing the DPA.
What happened
In August 2021, Staffordshire County Council sent a letter which contained information about Deferred Payment Agreements (DPAs) to Mrs Y who oversaw her mother’s residential care funding, advising her to seek independent financial advice and referring her to the Council’s website.
By December 2021, the Council accepted a property valuation for the mother’s share as the basis for the DPA. The property was jointly owned with Mrs Y.
When Mrs Y signed the DPA on behalf of her mother, she opted out of the Disposable Income Allowance (DIA).
In January 2024, the Council discussed with Mrs Y a revaluation of her mother’s property. Mrs Y questioned the Council’s valuation method and arranged her own surveyor to value the property; the Council accepted this, after legal review.
However, the Council sent out new DPA statements with wrong equity limits in February and July 2024.
In March 2024, it identified that the mother’s property equity would fall below the upper capital limit of £23,250, with her total capital due to fall below that threshold in November 2024 if the mother paid full fees until November 2024, when the Council would take on responsibility for funding, from then onwards.
From this date Mrs X would only be expected to continue paying contributions towards the cost of her care from her income and benefits and a capital tariff on all assets over £14,250.
Conflicting letters followed in July about care costs once equity fell below the limit, and the Council sent four revised charge schedules between August and October.
Mrs Y formally complained in August 2024, prompting the Council to admit errors in statements, charging calculations, and misleading website information. It apologised, promised amended calculations, website updates, better practice, and offered £300 compensation for distress, but did not uphold all complaint points.
As Mrs Y was still not satisfied, she continued to request clearer interest calculations and better clarity on maintenance charges. In October 2024, the Council responded that valuations required case-by-case legal review and confirmed plans to allow DIA ring-fencing and to revise correspondence.
By May 2025, the Council admitted service improvements were ongoing, managed across multiple teams, but could not specify any changes introduced as a result of Mrs Y’s complaint and feedback.
What was found
The Ombudsman found the Council at fault for giving insufficient, unclear information about DPAs, care charge calculations, and allowances, resulting in confusion, anxiety, financial strain, and additional professional costs for the complainant. The Council had already accepted its failings. It said the project was a substantial piece of work covering several teams and was still ongoing.
Although the valuation process was handled correctly and the Ombudsman found no fault in the Council’s approach to valuing properties under DPAs, because it had at least said that it would treat each case individually, its repeated administrative errors and poor communication fell short of Care Act information and advice duty requirements.
Personal remedies included an apology for the Council’s failings and £300 payment for Mrs Y’s distress as well as allowing for ring-fencing and accurate identification of maintenance expenses. The Council has also agreed to improve its services such as improvements required to website, guidance, and letters, by March 2026. Staffordshire County Council’s acceptance of recommendations ended the investigation.
Points to note for councils, professionals, people using services and their carers, advocacy groups and members of the public
Under the Care Act, local authorities have responsibilities to provide information and advice about deferred payment schemes (Care and Support Statutory Guidance, paragraph 9.23). If the local authority identifies someone eligible for a DPA or a person approaches them asking for information, they must accurately explain the DPA scheme and how it works. There is information surrounding what the Council should include in its advice as a minimum, including the suggestion of obtaining independent financial advice under Paragraphs 9.30 of the Care and Support Statutory Guidance.
The report suggests that where there is joint ownership, or any dispute as to the value of property, local authorities should try to obtain an independent valuation of the person’s beneficial share of the property within the 12-week disregard period where a person is in a care home. That does make good sense.
Councils must cease deferring further care home costs when the person has reached the “equity limit”. (Care and Support Statutory Guidance, paragraph 9.22) If secured by property, the equity limit is the value of property minus 10% minus £14,250 minus any encumbrances.
The disposable income allowance (DIA) is a fixed amount (up to £144 per week) of a person’s income which the local authority must allow the person to retain (if the person wants to retain it – for instance, to maintain the property). Mrs Y declined to take that option and presumably said that the information on the website was not good enough to enable anyone to make an informed decision.
Although progress had been slow, the Council said (even to Mrs Y) that it planned to start work on the website information with the Senior Finance Officer and Account Manager responsible for this review. Areas of improvement planned related to
- including in the person’s assessment the information on owning a property or a share of a property;
- defining a DPA on the Council’s website and adding the information about DIA and PEA, as well as the Council’s ringfencing policy;
- reviewing letters, fact sheets and other information, advice and guidance;
- before completing financial assessments for DPAs, checking with financial representatives that they understand reasons for DIA.
No doubt a shortage of workforce capacity had underpinned the glacial pace towards improvement, but at least the Council will now be committed to get on with it.
We feel compelled to underline that only the information and communication failing was what was upheld regarding the complaint made – no other financial remedy beyond what had been offered already – and specifically, not the revaluation costs, were to be repaid to the mother.
Only a close look at this report, it appears that the complainant (the daughter) was the owner of the other half of the property. It must be assumed that she held enduring or lasting power of attorney or deputyship for finances and property to be able to sign the DPA for her mother. The woman had asserted that had it not been for the Council’s failings, Mrs X (the service user) would not have had to spend money on specialist advice and valuation fees.
In Palfrey, a benefits case, rather than a social care charging case (albeit the principle it stood for, then figured in many years’ reissues of CRAG (the Charging and Residential Accommodation Guidance), which was published and in use under the prior legal framework to the Care Act) the Court of Appeal held that the value of the benefit claimant’s share should be based on its real market value, which could be significantly discounted if it was difficult to sell, such as when another co-owner occupied the property and would not agree to a sale. This meant the value could be much lower than one-half of the property’s total value and, in some cases, even nil. Nothing has happened to override that principle, as far as we are aware, in legal terms.
We suspect that underlying this report was a dispute as to whether the mother’s share of the house should have been valued at much less than a straight 50% of its overall value because of the principle from the now ancient Palfrey case which says that the value obviously depends on whether a willing buyer could be found for a property that they’d end up owning with a co-owner that they didn’t know or have any connection with – here, an assumed unwilling seller, Mrs Y.
The Ombudsman’s analysis lacks any reference to that aspect of the case, which we therefore think is poorly informed.
Current Office of the Public Guardian guidance requires that councils and deputies or attorneys must be alert to conflicts of interest. The OPG’s standards and guidance for deputies and attorneys explicitly state that any transaction or major financial decision creating a conflict (such as charging a jointly-owned property for care fees where the agent is a co-owner) should generally be assessed by the OPG, and may even be subject to a formal application for authorisation by the Court of Protection if complex or disputed.
We also think it is surprising that there is no reference to the Deferred Payment regulations because they prescribe clear rights for those subject to residential charging, through a Deferred Payment Agreement. The scope for discretion is limited by those regulations.
There is no reference in the regulations to a maintenance allowance or a disposable income allowance, which concepts featured in this report. The investigator was satisfied that the Guidance was followed, however, and that Guidance is fleshed out by annual circulars. Originally £144 a week was set out as the maximum in LAC(DH)(2017)1 and the amount has remained the same every year, most recently in LAC(DHSC)(2025)1.
If calculations or equity thresholds are miscommunicated, or users are not pro-actively advised about entitlements and their opportunity for review, this falls short of the underlying statutory requirements.
This means that confusion or distress due to conflicting letters or repeated changes, as seen here, is not just administratively sloppy—it constitutes a legal failing. The option to ring-fence the Disposable Income Allowance must always be set out clearly, and councils must audit and amend their processes to ensure calculation errors and misinformation are not recurring. Proper recognition of maintenance expenses is not discretionary, and should be based on a rational, defensible legal process that enables challenge and redress at any stage, not after the fact or upon persistent complaint.
Please use the following link if you want to read the original Local Government and Social Care Ombudsman’s Staffordshire County Council (24 013 429) 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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