The Ombudsman's final decision
Summary: We have not found fault in the Council’s decision to include Mr B’s Personal Independence Payment as income when it calculated his contribution.
The complaint
Mr B says there is fault in the Council’s decision to include his Personal Independence Payment as income when it calculated his contribution to the cost of his care package.
The Ombudsman’s role and powers
We investigate complaints of injustice caused by ‘maladministration’ and ‘service failure’. I have used the word ‘fault’ to refer to these. We cannot question whether an organisation’s decision is right or wrong simply because the complainant disagrees with it. We must consider whether there was fault in the way the decision was reached. (Local Government Act 1974, section 34(3), as amended) The law says we cannot normally investigate a complaint when someone could take the matter to court. However, we may decide to investigate if we consider it would be unreasonable to expect the person to go to court. (Local Government Act 1974, section 26(6)(c), as amended) If we are satisfied with an organisation’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended)
How I considered this complaint
Mr B’s legal representative has made the complaint on his behalf. I have referred to Mr B throughout this decision, for simplicity, even though some of the correspondence may be from his representative. I have discussed the complaint with Mr B’s representative and I have considered the documents sent by Mr B’s representative and the Council and the relevant law, guidance, policies and case law.
What I found
Law, guidance and policies The Care Act 2014, the Care and Support Statutory Guidance 2014 (updated 2017) and the Care and Support (Charging and Assessment of Resources) Regulations 2014 set out the Council’s duties towards adults who require care and support and its powers to charge. The Council also has its own policies.
Financial assessment Where a local authority has decided to charge, except in certain circumstances, it must carry out a financial assessment of what the person can afford to pay.
I have set out the rules relevant to people who receive care at home and whose capital is below the threshold of £23,250.
Minimum income guarantee After charging, a person must be left with the minimum income guarantee (MIG), as set out in the Care and Support (Charging and Assessment of Resources) Regulation 2014.
The purpose of the MIG is to ensure that a person has sufficient funds to meet their basic needs such as purchasing food, utility costs or insurance. This must be after any housing costs net of any benefits provided to support these costs – and after any disability related expenditure.
Disability related expenditure Where a person receives benefits to meet their disability needs that do not meet the eligibility criteria for local authority care and support, the charging arrangements should ensure that they keep enough money to cover the cost of meeting these disability-related costs.
In assessing disability-related expenditure, local authorities should include the following: Day or night care which is not being arranged by the local authority.
What income is taken into consideration?
Local authorities may take most of the benefits people receive into account as income, but some benefits, such as the mobility element of the Disability Living Allowance (DLA) or Personal Independence Payment (PIP) must be disregard as income (among others).
Earnings are fully disregarded from income ‘to help encourage people to remain in or take up employment.’
Setting a charging policy Councils have discretion to choose whether to charge or not for non-residential care. Local authorities should have a charging policy on how they wish to apply this discretion. The Guidance says: Local authorities should consult people with care and support needs when deciding how to exercise this discretion. In doing this, local authorities should consider how to protect a person’s income.
The government considers that it is inconsistent with promoting independent living to assume, without further consideration, that all of a person’s income above the minimum income guarantee (MIG) is available to be taken in charges.
Local authorities should therefore consider whether it is appropriate to set a maximum percentage of disposable income (over and above the guaranteed minimum income) which may be taken into account in charges.
Local authorities should also consider whether it is appropriate to set a maximum charge, for example these might be set as a maximum percentage of care home charges in a local area.
Personal Independence Payment (PIP) The PIP was introduced to replace the Disability Living Allowance.
The PIP is composed of: a daily living component: lower/higher a mobility component: lower/higher The DLA is composed of : Care component: lowest/middle/highest. The rates were linked to the provision of day or night-time care.
Mobility component: lower/higher The Care Act 2014 replaced ‘Fairer Charging’ policies for non-residential placements.
‘Fairer Charging’ said that, because of case law, councils should exclude DLA paid for night care as income where the council purchased no element of night time care. If a council was assessing PIP income, then they could include the PIP, but identify any DRE relating to day or night costs which the council was not meeting. Councils should also ensure people were not worse off as a result of moving from DLA to PIP if their DWP support had not changed.
The Care Act 2014, charging regulations and the Guidance did not include that provision.
Norfolk judgment There was a recent court judgment (SH v Norfolk County Council) which considered Norfolk County Council’s charging policy. Norfolk Council had changed its charging policy in 2019: It reduced the MIG to the amount set by government (it had previously applied a higher MIG).
It included all of a person’s eligible benefit income (it had previously not included the PIP daily living component).
A person challenged Norfolk Council’s charging policy as she said the policy discriminated against her. As a severely disabled person, she received higher benefits because she had higher needs. However, she was unable to earn an income so she would never benefit from the protection of the earned income regulation. She said this was discrimination as adults who were less disabled may be able to work and therefore benefit from that protection.
The Court upheld the claim and said Norfolk Council’s policy discriminated against severely disabled people. The Court said Norfolk Council had not properly considered what the differential impact would be on the most severely disabled people when it changed its policy.
Following the Court’s decision, Norfolk Council made an amendment to its charging policy and set the MIG at £165 and only included part of the enhanced rate of PIP daily living.
What happened Mr B is an adult with additional needs. He lives in supported accommodation where he receives 24/7 shared support and an additional 6 hours of one-to-one social care support a week. His personal budget (cost of the care per week) is £309.26.
The Council re-assessed Mr B’s finances in October 2020 as Mr B’s social worker said that his financial circumstances had changed. Mr B’s income had increased from £125.05 per week to £197.60 per week. Mr B received employment support allowance and PIP. The PIP was paid at the higher weekly rate, but did not include a mobility part.
The increase resulted in an assessed contribution charge of £120.30 per week. The Council did not backdate this to the date of the increase of the income but to February 2021 (when the review was completed).
Correspondence – April 2021 Mr B pointed out that he paid child maintenance so the Council reduced the contribution accordingly.
Mr B then said that PIP, unlike DLA did not distinguish between day and night rates, but the two PIP rates (lower and higher) were the same as the middle and highest rates of DLA.
Mr B said that therefore: ‘As it has been confirmed that [he] requires assistance during the day and not at night then it should be accepted that only the daily care of £59.70 should be considered…’ The Council responded and said the Care Act allowed them to take the full PIP (except for the mobility element) into account as income.
Letter from Mr B – April 2021 Mr B wrote to the Council in April 2021 and said: The Norfolk case confirmed that the Council was acting unlawfully by taking the entire rate of PIP into account when a person was only receiving care during the day.
If the Council did not confirm that it would use the figure of £59.70 as PIP, he would consider the process of a letter before action (judicial review).
Council’s response – May 2021 The Council responded and said: Mr B had not notified the Council of this increase in his income.
The Council re-assessed Mr B’s finances which led to a higher contribution request. The Council had decided not to backdate this.
The Council felt that the reasoning in the Norfolk case was incorrect and it had not discriminated against Mr B.
Mr B should set out in more detail why the Council was discriminating against him at his letter had not done so.
Complaint – 28 May 2021 Mr B made a formal complaint in May 2021 and said: Mr B was still being asked to pay £113.35 a week when the actual cost of the care was £99 a week.
The Council’s charging policy allowed the Council to include the full rate of the daily living part of PIP (£89.60 per week) as income.
The Norfolk case said that ‘if a person is receiving care during the day, then the local authority are found to be discriminating to those who are severely disabled, less likely to get a job, by including the full rate of daily living of the PIP and not using the same rate as those on the middle rate of care who receive the DLA.’
Therefore, the Council should only include £60 of PIP as Mr B’s income and not £89.60.
The Council’s response – July 2021 The Council responded and said: The National Association of Financial Assessment Officers had obtained legal advice from leading Counsel on the Norfolk case. The Council had considered this advice, but could not refer to it as it was legally privileged.
The Norfolk case was not directly binding on the Council although it was of course entitled to ‘respect and careful attention.’
The Council’s policy was not discriminatory and the Council did not agree with Mr B’s implicit position that SH Norfolk was correctly decided.
The receipt of earned income was treated by the charging regulations as a special case and an earner and non-earner were not in analogous positions for the purpose of discrimination law. Earned income was ‘quite different in nature’ from benefits income designed to assist with the additional costs of the disability.
Even if there was discrimination, it would be justified because of the different natures of the income and because councils were entitled to set a charging policy which reflected the nature and costs of services and which represented a fair distribution of the costs.
There was at least one judicial review claim in progress relating to the Norfolk case and the Council would of course pay close attention to any future guidance given by the courts.
Mr B’s complaint to the Ombudsman Mr B came to the Ombudsman and said: The Council was still including the full rate of enhanced daily care of PIP even through Mr B only received 6 hours care during the day. The Council should consider the Norfolk case and disregard £29.60 of his income as he did not have night-time needs.
Analysis Mr B says the Norfolk case has changed the position regarding PIP and has linked this to the ‘Fairer Charging’ policy and its distinction between night and day-time care costs. Mr B is arguing that, because he has no night-time needs, the Council cannot use part of his PIP (which he says is the night-time equivalent).
The Council is correct in saying that the Care Act 2014, regulations and Guidance have replaced the ‘Fairer Charging’ policies. Therefore, the Council can include the full amount of Mr B’s non-mobility PIP as income as a starting point.
If Mr B was using his income to pay for care to meet night-time needs, (which were not met by the Council), then the Council would need to assess whether these night-time costs were a DRE and include them as an expenditure.
However, Mr B is not in that position. He does not have night-time care needs therefore the Council does not have to consider whether the cost of night-time needs are DRE.
In terms of the Norfolk case, this case was decided on the basis that Norfolk’s charging policy as a whole discriminated against severely disabled people, taking into account all the different sections of the policy including the amount of benefit income that could be included, the setting of the MIG, DRE and so on.
If Mr B is saying that the Council is in the same position as Norfolk Council was, he would have to consider the Council’s charging policy as a whole and assess what the impact of the policy was on severely disabled people and how the Council considered this when it set its policy.
Mr B has not commented on the Council’s policy as a whole but has only considered one aspect which is the inclusion of the full amount of PIP. I agree that Norfolk Council included PIP (non-mobility) as an income in its charging policy but that does not mean that any council who does so is automatically discriminating against severely disabled people. That would entirely depend on an analysis of the policy as a whole, which Mr B has not provided.
I note that the Council says the Norfolk judgment may be challenged in the courts and I note Mr B initially said he was considering a judicial review claim.
If Mr B wishes to set out a more detailed claim about why the Council’s policy is discriminatory, then this matter may be better looked at by a court. The Ombudsman takes a view, of course, on the meaning of legislation and guidance to assess whether there has been fault. However, The Ombudsman does not make legal determinations as to the meaning of statute or guidance. That is the role of the court.
I make no comments on the Council’s interpretation of the Norfolk judgment.
Final decision
I have completed my investigation and have not found fault by the Council.
Investigator's decision on behalf of the Ombudsman