House owner/occupier - temp.absence

Had a call from a Community MH advocate - client has aproblem with HB - client owns own house - had a short stay in MH hospital then on advice of phsyciatrist transferred to a respite unit before before returning home . Apparently a claim for HB was made and has now been turned down because capital exceeds £16,000 (capital value of house) . Client’s MH Health Care Assistant confirmed with the Local Authority that HB was payable - cannot check details with this person as they are on annual leave .

Client has been sent a bill for ‘rent’ from SLS provider who run the respite unit .

From wording of decision letter read to over telephone , the Local Auhority are not disputing that the cost is eligible rent so my question is are the Local Authority correct in taking into account the capital value of client’s house whilst in this temp. respite unit ?

I am also wondering but do not have knowledge of NHS / MH Services - should client be charged for stay ? If yes should he not have had a financial assessment in same way as Adult Social Care services ?