Residential care fees and lack of capacity

I act for a client who lives in Scotland. Her Father lived in England. Father was in a residential care home from early 2016. He did not have capacity by that stage. There was limited contact between client both before and after the time the Father entered care.

The Father’s finances remained untouched until mid 2019 when a Deputyship Order was granted to the local authority. The local authority continued to pay the care fees from 2016 until they could access the Father’s assets. At that time, they believed that the Father had capital of £70,000. The local authority quickly recovered £62,000 from the Father’s capital representing repayment of the fees which they had discharged on the Father’s behalf. The Father died in early 2021.

Shortly following the death, another previously undiscovered account containing £50,000 was located. We notified the local authority and they now consider that there is approximately another £20,000 due to them.

At this time, we were informed that the Father also owed the DWP approximately £8,000 because of the Attendance Allowance and Pension Credit which had continued to be paid into his account whilst the local authority had been paying his fees. We have spent more than one year trying to clarify this situation with DWP. Eventually, they have accepted that as the Father was effectively a self funder for most of the period. Furthermore, due to the fact that he lacked capacity from the time when he entered the care home, they have waived the liability and there are no further fees due to them.

Now that the DWP situation had been finalised, we need to finalise matters with the local authority and repay any funds due to them.

In earlier communications with the local authority, I had requested a breakdown of the monies which they had already recovered from my client (and to consider the further amounts which they required given the additional previously undiscovered capital). At this time, I considered that the weekly amount which they had paid to the residential care home seemed slightly on the low side of what one would expect to have paid if they had been in the care home on a private basis. The representative at the local authority stated that they have an agreement with care homes so that they pay a different rate to the rate payable if the contract for the service had been direct between the Father and care home.

At this stage, as we near completion, I am trying to understand whether we need to draw the fact that the Father should have been a self funder from 2016 to the care home?
• From a legal perspective, would the care home have any right to charge the Father’s estate additional funds at this stage (to make up any shortfall from the amount that the local authority paid on behalf of the Father)? I presume that as the Father or my client never entered into any contract with the care home, they cannot do this.
• When making the final payment to the local authority is there any way of ensuring that there can be no further liability due to them (or the care home)?
• Morally and from a professional ethics aspect, are we supposed to draw this to the attention of the care home?

Any information or advice regarding our responsibility to the care home/contractual agreements of this nature would be appreciated.

I would think if the Local Authority placed Father in the care home, they were the contracting party with the care home and therefore could negotiate whatever rate they wanted with the care home. The Estate debt is with the Local Authority, not the care home who have been paid. You should ask the LA for their financial assessment showing how they have calculated Father’s contributions and details of amounts paid to date. .

I wonder if the decision in Aster Healthcare Limited v. Shafi (Aster Healthcare Ltd v The Estate of Mr Mohammed Shafi, Deceased [2014] EWCA Civ 1350 (24 October 2014) ( might be relevant to the situation.

Paul Saunders FCIB TEP

Independent Trust Consultant

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