A COUNCIL is to review its procedures - after it wrongly decided that an elderly woman had spent her money to avoid paying care fees.

The woman was 80 when she entered the care home after a stroke in 2007 and sold her home to pay for her care - but carried on making regular gifts to relatives, as she had done before.

But in January 2015 her capital fell below the threshold so North Yorkshire County Council assessed the woman and said it was appropriate for her to stay in her care home, and agreed to pay the full care costs.

However, when it reviewed her finances, the council decided she had deliberately reduced her money and terminated the contract with the care home and stopped payments.

The woman remains in the home and pays all her income towards the fees, but that does not cover the full cost and the home has recently written to her as she owes £30,000. It has said it will take “further action” if the debt is not paid.

But after an investigation by the Local Government Ombudsman the council has been asked to reassess the woman’s finances and repay any money she should have been entitled to.

Ombudsman Michael King said: “The guidance does state people with care needs are free to spend their money as they see fit.

“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.

“Given the woman’s prognosis when she entered the home, and after paying for her care for nine years, it is hard to see how the council concluded every penny she gave away was done with poor intentions.”

The council has also been told it should apologise to the woman’s daughter and pay her £250 for the distress caused.

A county council spokesman said the authority accepted the findings and would implement the Ombudsman's recommendations.

He added: "Care home residents have the right to make their own decisions about their finances, but they also have a responsibility to ensure that where they have known care needs they do not deliberately dispose of assets to pass on a financial burden to the taxpayer.

"Councils must assess whether they think this has happened and, if so, take appropriate action. We recognise that in the case in question procedures were not followed thoroughly."