The Local Government and Social Care Ombudsman has criticised a local authority that refused to pay for an elderly woman’s residential care fees, after it learned that she had made regular cash gifts to her family after being admitted to the care home.

The woman suffered a stroke aged 80 in 2007 and had to go into residential care. At the time, she had assets of about £250,000, including her home, so was not eligible for local authority financial assistance under the Charging for Residential Accommodation Guide (CRAG) rules. Her house was sold and the proceeds used to pay her care home fees. By 2015, it had nearly all been used up, and her assets had fallen below the £23,250 threshold for local authority assistance. Consequently, the local authority began paying the care home fees.

However, when the council came to do a full assessment, her daughter revealed that she, and other family members, had been receiving annual cash gifts from her mother since her admission to the care home until 2014, when her money ran out. The gifts amounted to nearly £75,000 in total.

The council took the view that this was deliberate deprivation of capital under the CRAG rules, which state that gifts to family can be treated as deprivation of capital if they are made with the intention of reducing the amount the person is charged for their care. It immediately stopped paying her care home fees and demanded repayment of the some fees it had already paid.

The Ombudsman decided that the council took its actions without ever completing a full financial assessment, simply assuming without cause that the gifts were deliberate deprivation of capital. Moreover, its calculations on the amount of deprived capital were not backed up by any evidence, and it did not properly take into account the proven fact that there was already a pattern of gifting before she went into the care home, with no evidence of any haste to dispose of her assets.

The ombudsman has now ordered the council to reassess her situation properly, and repay her any fees to which she is entitled.

The Ombudsman stated ‘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’.


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