Social Care Ombudsman’s ruling on disposal of assets – what does it mean for providers?

A care home resident paid privately for her care until her capital reserves fell below the local authority means-testing threshold. After reviewing the woman’s finances, the local authority withdrew its top-up funding because it decided that she had deliberately reduced her capital reserves by gifting money to her family. Nicola Cutler, Associate at Royds Withy King, offers a legal perspective on the case.

The resident’s family raised a complaint with the Ombudsman, concerned that the care home may evict her if the accrued debt went unpaid. They argued that the policy needed to be balanced with the resident’s rights to spend her money as she wished, in the interests of promoting her wellbeing.  Having been in the care home for some years, she had continued to gift ordinary amounts to the family for Christmas and birthdays, and 70% of the proceeds of the sale of her house had been spent on care fees.

The Ombudsman ordered the local authority to reconsider its decision to cut off the resident’s funding and make proposals for how the debt to the care home could be reduced.

The law gives local authorities discretion to cut off funding where a person is found to have deliberately reduced their capital reserves and assets.  In order for a person to be treated as having acted deliberately, they must have known that they needed care and support and acted purposefully to reduce their assets in order to reduce the contribution they are required to make, for example by making lump-sum gifts and substantial out-of-character expenditure.

No immediate repayment of the debt was made to the care provider, meaning they were left in a difficult commercial position.  From our own experience, many providers feel uncomfortable about evicting residents, even when significant sums are owed.  Our advice to providers is to review residents’ contracts and ensure that there is clear and enforceable provision for payment by a third party in circumstances where the resident or the local authority is not able to continue funding their care.

Please contact our dedicated Health & Social Care team on 0800 182 2491 or healthcare@roydswithyking.com

Get started today

Contact us today and speak to our expert team to get started

Contact
close slider