Private Client weekly update

News  |   13 February 2018

Our weekly round up of private client news.

Deprivation of Capital

On 1 February 2018, the Local Government & Social Care Ombudsman (“LG&SCO”) published a report on its “Investigation into a complaint against North Yorkshire County Council” (reference number 16 006 552), concerning North Yorkshire County Council's decision to treat gifts of money as a deprivation of assets.

Between 2007, when Mrs Y moved into residential care, and 2014, she regularly provided gifts of money to members of her family of between £250 and £3,000 per year. Her family paid the full cost of Mrs Y's care home placement from 2007 until January 2015, at which time her daughter contacted the Council for assistance with funding as Mrs Y’s capital had fallen to the upper capital limit. Following a financial assessment, the Council decided that the gifts of money were a deprivation of capital, terminated the contract with the care home and stopped paying the fees. The council also invoiced Mrs Y for the fees it had paid since January 2015. The care home subsequently informed Mrs Y that she had accrued over £30,000 in fees and that it would take further action if the sum was not paid.

The Charging for Residential Accommodation Guide (the pre-Care Act 2014 guidance applicable at the time the facts arose) and the care and support statutory guidance, both state that gifts to family can be treated as deprivation of capital. However, any deprivation must be with the intention of reducing the amount a person is charged for their care.

The LG&SCO, which found that the Council had not provided sufficient evidence to show how it considered the gifts were made with the intention of avoiding care charges. It recommended that the Council should:

  • Apologise to the complainant (Mrs Y’s daughter) for its failure to evidence why it considered the money was gifted with the intention of avoiding care charges and pay the complainant £250 for the distress caused.
  • Complete a financial assessment based on Mrs Y's circumstances in January 2015, including whether any deprivation of capital had occurred and repay any money resulting from this reconsideration. It should also review Mrs Y's current financial situation and consider how her debt to the care home could be reduced or settled to avoid her placement being put at risk.

Local Government Ombudsman, Michael King, said:

“While I appreciate councils need to make difficult, nuanced decisions about whether people have deliberately reduced their assets, the guidance does state people with care needs are free to spend their money as they see fit.
“Just because someone might be living in a care home, it does not mean they should not be able to spend their money on things other than their care, and this includes continuing to give gifts to friends and family.
“Given the woman’s prognosis when she entered the home, and after paying for her care for nine years, it is hard to see how the council concluded every penny she gave away was done with poor intentions.”

Civil Partnerships, Marriages and Deaths (Registration Etc.) Bill

The above Bill had its second reading in the House of Commons on 2 February 2018. Amongst other things, the Bill provides that opposite sex couples may enter a civil partnership. Watch this space.