Home sweet home? Case update on means testing for residential care fees

 In Elderly/Vulnerable Client

Disclaimer: LawSkills provides training for the legal industry and does not provide legal advice to members of the public. For help or guidance please seek the services of a qualified practitioner.

Case Summary from LawSkills | Private Client specialist trainersWhat is a ‘home’ and when does occupation by another make that property disregarded in means testing for residential fees?

Disregarded assets in means testing for residential care fees – Walford, R v Worcestershire County Council [2015] EWCA Civ 22

This is a significant case as it is the first occasion that the Courts have considered Schedule 4 paragraph 2 (1) (b) of the National Assistance (Assessment of Resources) Regulations 1992 (the Regulations) and looked at when a property should be disregarded in means testing for residential care fees. The High Court have taken a new approach to looking at the definition of a ‘home’ within the Regulations, but the Court of Appeal have confirmed that for a property to be disregarded it must be occupied by a qualifying relative as their home at the date the resident went into care. Any occupation subsequent to the resident going into care is immaterial and cannot bring the property into being disregarded.

The facts

From 2006, Mary Walford (‘M’) had been resident in a home managed by Worcestershire County Council (the Appellant). 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 Appellant 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. M’s daughter Glen Walford  (the Respondent) was 67 years old when M entered residential care following a fall and broken hip. The Respondent 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 M’s solely owned property (‘Sunnydene’) would not be disregarded.

The LawSkills Monthly Digest

Subscribe to our comprehensive Monthly Digest for insightful feedback on Wills, Probate, Trusts, Tax and Elderly & Vulnerable client matters

Not complicated to read  |  Requires no internet searching |  Simply an informative pdf emailed to your inbox including practice points & tips

Subscribe now for monthly insightful feedback on key issues.

All for only £98 + VAT per year.

Lawskills Digest

The Respondent requested that Sunnydene should be disregarded. She sent a letter to the Appellant 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 Respondent on the death of M. The Respondent 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 Appellant then accepted that the Respondent occupied Sunnydene as her home.

On the 12th March 2012 following a review by the Appellant 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 Respondent was not to be deemed as a resident or Sunnydene regarded as her main home.  The Appellant specified that the Respondent 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 Respondent’s solicitors sent a letter enclosing copy documentation which included communications in relation to the Respondent’s income tax affairs addressed to her at Sunnydene and schedules giving details of contributions made by the Respondent 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 Respondent’s solicitors confirming that the complaint from the Respondent that Sunnydene should be disregarded had not been upheld. The Respondent’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 Appellant had erred in law by equating the statutory test of whether the relevant property is ‘occupied in whole or in part (by the Respondent) as her home’ with the question of whether it was her sole or main residence.
  2. Further or alternatively, the Appellant had reached its factual decision on the nature and extent of the Respondent’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) of the Regulations 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 at first instance

Supperstone J found for the Respondent quashing the decision of the Appellant. 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’.

Supperstone J stated that the Appellant had not applied the correct test. He ruled that the decision of the Appellant 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 Appellant had erred in interpreting the Regulations as requiring it only to review the position that pertained at the time the Respondent’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 Appellant had failed to consider whether the Respondent had occupied Sunnydene as her home since November 2006.

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

The decision on appeal

The Appellant accepted that it had to relook at whether the Respondent occupied Sunnydene as her home but appealed the decision on the question of the date when that occupation had to be considered. They claimed that the relevant date was 24th November 2006 when M went into care and not any subsequent date. There was no material change in the Respondent’s use of Sunnydene since 2006.

Both parties accepted that the issue of the ability to pay should be determined on a continuing basis and not once and for all at the moment the resident goes into care. The Appellant argued that if a property was initially disregarded and there was a change in circumstances, such as a family member moving out, then the property would no longer be disregarded. But crucially, it would not work in reverse. The question of occupation of a property for determining if it should be disregarded or not must be at the time the person went into care. So a change in circumstances, such as a relative over 60 years subsequently moving into it, would not then make the property disregarded. If this were the case, there could be widespread avoidance by families by arranging to preserve the value of the house by one of them subsequently moving in.

Underhill LJ stated that the starting point was to identify the purpose of the disregard rule. The only purpose he could see was to “protect family members in the specified classes from the risk of losing their homes as a result of the value of the property being brought into account.”  It followed therefore that the time for determining the occupation was the time the resident went into care as that was the time when the liability arose. There was no reason why there should be concern for “family members who might at some point in the future have the opportunity to make the property their home.”

He held that the true construction of Schedule 4 paragraph 2 (1) (b) of the Regulations is that 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 at the time the resident first goes into care (emphasis added) and this element does not need to be reviewed on an ongoing basis.

He held that the Appellant should therefore re-determine the question of Sunnydene being disregarded or not by looking at whether the Respondent occupied it or not as her home on the date M went into care in November 2006 and not on any subsequent date.

McCombe LJ disagreed with Underhill LJ and would have dismissed the appeal allowing the lack of disregard to be looked at again taking any subsequent qualifying occupation into account. However Moore-Bick LJ agreed with Underhill LJ so the appeal was allowed.

Practice Points

  1. From the decision at first instance, Supperstone J’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. The correct test is qualitative as well as quantative.
  2. However from the decision on appeal, Underhill LJ has confirmed that a property will be disregarded only if a relative aged over 60 years is in occupation of it as their home on the date the resident went into care. The only subsequent changes to occupation which need be considered are where occupation ceases so the property no longer needs to be disregarded. Any qualifying relative subsequently taking up occupation is irrelevant.
  3. It will be interesting to see what decision Worcestershire County Council now come to and how they apply the new approach to ‘home’ to the Respondent. Watch out for further developments.
  4. New CRAG made under the Care Act 2014 will come into force on 1 April 2015 and will replace the current CRAG. The new CRAG will deal more explicitly with the issue of disregarding homes and specify only those qualifying relatives in occupation at the date the resident goes into care, but until they come into force the current CRAG remain relevant when looking at this issue.

Related courses

[products orderby=”title” ids=”5780,5820,5958,5923″ order=”asc”]

FREE monthly newsletter

Wills | Probate | Trusts | Tax  | Elderly & Vulnerable Client

  • Relevant learning and development opportunities
  • News, articles and LawSkills’ services
  • Communications which help you find appropriate training in your area
Recommended Posts
Case Summary from LawSkills | Private Client specialist trainersCase Summary from LawSkills | Private Client specialist trainers