A severely disabled woman has won a High Court ruling that a local council's charges for social care services are unlawful.
A judge sitting in London said the woman, referred to as ZYN for legal reasons, had substantial capital assets currently valued at about £550,000.
The money was compensation paid in settlement of a personal injury claim for clinical negligence brought against Walsall Health Authority, West Midlands.
Mr Justice Leggatt declared: "I find that the council's policy on charging for the cost of social care services is unlawful insofar as it takes account of any of the capital derived from the claimant's personal injury settlement."
The judge said it was Government policy that social care services were means tested and people with assets were required to contribute to services received from a local authority.
However there were certain exceptions to the policy.
The issue in the case of ZYN was whether capital derived from a personal injury settlement managed by a deputy appointed by the Court of Protection must be taken into account when deciding whether she should pay for her care costs.
Walsall Metropolitan Borough Council decided to charge ZYN for the full cost of the services she received from April 1 2011, currently estimated at £271 a week.
The authority's charging policy requires non-residential care service users to pay the full amount if they have over £23,250 in capital.
The judge said at the time ZYN's compensation award was settled the legal advice was that she could expect to be cared for without her settement monies being touched.
But there had been a subsequent change in the legislation. The law was "unduly complex" and had created "a legal maze".
Local authorities had a duty to assess a disabled person's community care needs under the NHS and Community Care Act 1990 taking into account the income support regulations.
Clarifying the law, the judge ruled that the whole of ZYN's capital was protected under the regulations.