I am concerned at what you have been told.
In my understanding, Paul is a vulnerable adult, and your local authority has a duty of care to him. I believe similarly for the parents also.
As others have mentioned, your in-laws should not lose their home to pay for their son’s care; it is him and his finances that will be assessed and not the parents.
It is becoming ever apparent that social workers from all areas of The UK do not understand The Care Act or many other pieces of legislation, even the social worker’s code of practice appears to elude some.
Request in writing an assessment of Paul’s needs, as is the legal obligation of your local authority under The Care Act.
Regardless, I hope these links may be helpful:
As a side note, I would check whether there is a power of attorney for Paul’s health and wellbeing and also property and finance, this would make things a lot easier when dealing with his affairs.
I would also do so for his mother, particularly if it appears she may be starting to get dementia.
I am not medically trained, but it may be possible that your mother-in-law is not starting to get dementia and something like B12 deficiency is the issue, I would check with her G.P. particularly as she has diabetes. If it is, unfortunately, dementia starting then she also should have an assessment of needs.
Worth noting in her case is that The Care Act 2014 abolished The National Assistance Act 1948, so she would not have to worry about losing the home and be moved into care, this section: https://www.legislation.gov.uk/ukpga/2014/23/section/46
Your father-in-law should also have an assessment, or if he is caring for his wife a carer assessment, this is also in The Care Act, here: http://www.legislation.gov.uk/ukpga/2014/23/section/10/enacted
Hopefully this is of some help to you, Paul and his parents.
Please share the website and blog detailing the inadequate care and support provided to my vulnerable autistic brother by Herefordshire Council and The Priory Group. Thank you.