Disregarded assets in means testing for residential care fees

 In Elderly/Vulnerable Client

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Case Summary from LawSkills | Private Client specialist trainersWalford, R v Worcestershire County Council [2014] EWHC 234

Mr Justice Supperstone has ruled that the home of Mary Walford  (‘M’) should not be included in the assessment of her capital assets in relation to residential care fees as the property was a disregarded asset as it was occupied by her daughter Glen Walford (‘the Claimant’) as her home. This is a significant case as it is the first occasion that the Court has considered these particular legislative provisions namely  Schedule 4 paragraph 2 (1) (b) of the National Assistance (Assessment of Resources) Regulations 1992 (the Regulations).

The facts

This matter concerned the Claimant who  challenged  the decision made by Worcestershire County Council (the Defendant) to uphold its reversal of a previous decision to disregard a property, (‘Sunnydene’) owned by her mother, M, in calculating M’s ability to pay residential care home fees.

From 2006, M had been resident in a home managed by the Defendant. Under s.22 of the National Assistance Act 1948 the cost of providing such accommodation was recoverable from residents subject to their ability to pay. In assessing a person’s ability to pay the Defendant had to apply the Regulations. The Regulations provide that a property owned by residents should be disregarded where it was occupied in whole or in part as their home by a relative of the resident who was aged 60 or over. The Claimant was 67 years old when M entered residential care following a fall and broken hip. The Claimant was informed that M had been assessed provisionally under the Regulations and after the first 12 weeks of being in residential care the value of Sunnydene would not be disregarded.

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The Claimant requested that Sunnydene should be disregarded. She sent a letter to the Defendant setting out the history of Sunnydene and her connection to the house. She explained in the letter that her grandmother had taken possession of the house in the 1930s and it was rented to her mother and father from 1953. Under the terms of her grandmother’s Will Sunnydene would pass to the Claimant on the death of M. The Claimant lived in Sunnydene during her childhood and returned to the house during university vacations. Although she travelled internationally with her profession she always regarded Sunnydene as her home while the other properties she rented as temporary homes. The Defendant accepted that the Claimant occupied Sunnydene as her home.

On the 12th March 2012 following a review by the Defendant the decision was reversed. The decision letter stated that it had reviewed section 7 of the Charging for Residential Accommodation Guidance  (CRAG) which did not allow Sunnydene to be disregarded from any financial assessment as the Claimant was not to be deemed as a resident or Sunnydene regarded as her main home.  The Defendant specified that the Claimant maintained a rented flat in London, was registered there for council tax purposes and that although she maintained Sunnydene, she used it more as a holiday home.

On the 22nd November 2012 the Claimant’s solicitors sent a letter enclosing copy documentation which included communications in relation to the Claimant’s income tax affairs addressed to her at Sunnydene and schedules giving details of contributions made by the Claimant for the various expenditure carried out over the years including the refurbishment.  On the 21st December 2012 the Head of Adult Social Care of the Local Authority wrote to the Claimant’s solicitors confirming that the complaint from the Claimant that Sunnydene should be disregarded had not been upheld. The Claimant’s solicitors responded by submitting that:-

  1. The decision was based on an incorrect interpretation and application of the legal test required by the relevant statutory provisions. The Defendant had erred in law by equating the statutory test of whether the relevant property is ‘occupied in whole or in part (by the Claimant) as her home’ with the question of whether it was her sole or main residence.
  1. Further or alternatively, the Defendant had reached its factual decision on the nature and extent of the Claimant’s occupation of Sunnydene at material times without regard to relevant considerations and/or by having regard to irrelevant considerations.

The law

Under section 22 of the National Assistance Act 1948 the cost of providing such accommodation is recoverable from residents subject to their ability to pay. In assessing a person’s ability to pay the local authority will apply the Regulations. Under Schedule 4 paragraph 2 (1) (b) a property will be disregarded where it was occupied in whole or in part as their home by a relative of the resident  who was aged 60 or over. The rule is supported by section 7 of CRAG.

The decision

Mr Justice Supperstone found for the Claimant quashing the decision of the Defendant. He concluded that in relation to the term ‘home’ referred  to in Schedule 4 paragraph 2 (1) (b) of the Regulations in his judgment “home” should be construed as “only or main home”. This interpretation accords with the statutory purpose of the legislation. He specified that home is a place to which a person has a ‘degree of attachment both physical and emotional. The test as to whether a person occupies premises as their home is both qualitative and quantitative’.

Mr Justice Supperstone stated that the Defendant had not applied the correct test. He ruled that the decision of the Defendant was based on an incorrect interpretation and application of the legal test –  effectively applying  a test of actual occupation  and/or permanent residence.

He continued that the Defendant had erred in interpreting the Regulations as requiring it only to review the position that pertained at the time the Claimant’s mother went into long-term care on the 24th November 2006. A decision as to whether or not to grant a disregard can be reviewed whenever there is a change in circumstances. The Defendant had failed to consider whether the Claimant had occupied Sunnydene as her home since November 2006.

He concluded that the Defendant had failed to take into account relevant matters by failing properly to consider the evidence presented to it by the Claimant’s solicitor’s letter of the 22nd November 2012 and the enclosed documents. He stated that the Defendant was not obliged to conduct any comparative analysis of the character of the Claimant’s attachment to Sunnydene as opposed to her London flat.

Practice Points

  1. Judge Supperstone’s  summary of  the interpretation of the term ‘home’  referred  to in Schedule 4 paragraph 2 (1) (b) of the Regulations reflects a new approach and could have implications for many families in England and Wales who have  elderly relatives in residential care.
  2. This important case also highlights the requisite criteria that the Court will take into account when considering what assets can be disregarded in the assessment of capital assets in relation to residential care costs.

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