Council wrongly decided man deprived himself of assets to avoid care costs, Ombudsman finds

The man behind the complaint, Mr X, complained to the Ombudsman that Norfolk County Council wrongly decided his father, Mr Y, had deprived himself of assets to avoid care costs, which resulted in him suffering financial loss.

Mr Y had given each of his two children £34,000 in October 2022, which the council then included as “notional capital” in two financial assessments in 2023 for his care home.

In the first assessment, the council recorded that Mr Y had bank savings of around £16,000. The council wrote to Mr Y and said:

• he would need to pay the full cost of his home care as he had capital and savings over £23,250; and
• it had included the £68,000 as notional capital because Mr Y was “known to social services” when he made the gifts.

In December 2023, Mr X appealed against the council’s financial assessment decisions on Mr Y’s behalf.

He said when Mr Y gifted the money in 2022, his health and mobility had been relatively good, he was adamant he wanted to be independent at home, and did not know he would deteriorate and need residential care a year later.

At the end of December 2023, Mr Y moved into a residential care home.

In February 2024, the council responded to Mr X’s appeal at Stage 1. It said:

• The council had received several referrals about Mr Y’s care needs from 2010 to 2022. In June 2022 it had assessed Mr Y and decided he did not have needs for care and support. However, in early-October 2022 it received a referral from Mr Y’s GP asking it to assess his needs again, which said he was already paying for a private carer. Therefore, when he made the gifts later in October 2022, the council considered he already had a reasonable expectation of needing care;
• It had considered guidance from the Office of the Public Guardian about gifting and decided it would consider a reasonable gift in this case to be 10% of Mr Y’s capital and savings. Therefore, it would amend its assessment to disregard £7,800 from the £68,000 notional capital as a reasonable gift, leaving £60,200 included as notional capital in the assessment.

Mr X then escalated his appeal to Stage 2 the following week. Among other things, he said that Mr Y had not employed a private carer in 2022, or at any other time, so the council had wrong information. The only support he paid for was a cleaner who carried out domestic cleaning tasks.

He also said that the purpose of Mr Y’s gift to Mr X had been to help him clear debt.

In July 2024, the council responded to Mr X’s appeal at Stage 2. It said its Complex Case Appeal Panel had reviewed the case and “still considered it correct to include the notional capital in both financial assessments”.

In August 2024, Mr X complained to the council about its financial assessment decision. He said the council had ignored the information he provided in his appeal, including that Mr Y had never paid for a private carer. He also complained about delays in the council considering his appeal.

In October 2024, Norfolk County Council responded to Mr X’s complaint.

It said it accepted it had wrongly considered Mr Y to have had a private carer, when in fact he only had a cleaner, and apologised for this. However, it said when Mr X and his wife completed a financial assessment form for Mr Y in August 2023, they wrongly answered ‘No’ when asked if Mr Y had given away any money or capital investments.

The council said it still considered Mr Y had a “reasonable expectation” of needing care when he made the gifts.

Analysing the case, the Ombudsman said: “In carrying out a financial assessment of Mr Y, the council identified he transferred large sums of money at a time when it was in contact with him about his care needs. It was therefore reasonable for the council to consider whether these payments amounted to a deliberate attempt to avoid care charges.

“However, as the guidance says, people are free to spend their income and assets as they see fit, including making gifts to friends and family. Councils should not automatically assume a deprivation of assets. There may be valid reasons someone no longer has an asset, and a council should ensure it fully explores the circumstances before drawing conclusions.”

In this case, the Ombudsman decided the council was at fault – noting there was not enough evidence that the council “properly considered its decision making” or “fully explored the reasons Mr Y transferred money to his children when he did”.

The report stated: “The council first decided there had been a deprivation of assets when it completed the non-residential financial assessment in October 2023. It then completed a residential financial assessment a month or so later and made the same decision.

“It did not make enquiries with the family before these decisions, to get a version of events or explore the motivation of the gifts. It also only explained this decision to Mr Y by saying it had included the gift money as notional capital “because you were known to social services at that time”. This explanation was not good enough, or in line with the guidance.”

Meanwhile, the Ombudsman found that after Mr X appealed, the council said it would disregard some of the notional capital it included in its assessments as a "reasonable gift”. However, it did not properly consider or explain its decision about what it would allow as a reasonable gift.

Finally, the report criticised the local authority for an “unclear appeal process and delays”.

To remedy the injustice caused, the Ombudsman recommended the council to:

• apologise to Mr X and Mr Y for its failure to properly consider and evidence why it considered Mr Y gifted money to avoid care charges;
• pay Mr X £200 to recognise the distress caused by its unclear decision process and delays;
• pay Mr Y £100 to recognise the distress caused by its unclear decision process and delays;
• reconsider its deprivation of assets case for Mr Y. This will include a new financial assessment decision and, if it still decides there has been a deprivation of assets, an opportunity for the full appeal process afresh;
• repay Mr Y any money resulting from this reconsideration;
• deliver training to relevant staff about Annex E of the Care and Support Statutory Guidance, and what the Council needs to consider when it suspects someone has deprived themselves of assets to avoid care and support charges; and
• review its process for appeals against financial assessment decisions to ensure this aligns with its published policies.

A Norfolk County Council spokesperson said: “Norfolk County Council accepts the Ombudsman’s findings regarding a financial assessment and review relating to care charges for an elderly resident. The Council has paid a sum of £300 to the family for the distress and inconvenience caused, and agreed to repeat the assessment process in line with statutory guidance. In response to the complaint, we have delivered additional training for finance staff and have undertaken a review of our policies to ensure decisions are transparent and follow guidelines. We remain committed to supporting and caring for our residents with fairness and respect.”

Lottie Winson