denotes premium content | Jan 9 2009 Feature
posted 24 Jan 2001 in Volume 6 Issue 2
Government proposals for funding long-term care of older peopleBy Philip Spiers, NHFA Just in time for reading over the Christmas break the Government delivered The Health and Social Care Bill detailing the proposals on funding long term care as part of the NHS Plan. The proposals fall short of the Royal Commission's main recommendations that included free personal and nursing care for all.
Detailed below are some of the key clauses:
Clause 48The NHS to meet the costs of nursing care by a registered nurse involving the provision of care, the planning, supervision or delegation of the provision of care (Implementation October 2001). The definition of nursing care has not yet been made clear. Each individual will be assessed as to what amount of nursing care is needed and to be funded by the NHS. This may mean that there will be no benefit for many older people admitted to nursing homes who require care that enables them to perform their activities of daily living, washing, dressing, toileting, feeding and mobility. These are currently defined as means-tested social care.
Clauses 49, 50 & 51Transfer to local authorities the funding and responsibility of those in care homes under DSS Preserved Rights. (Implementation April 2002). This applies to people who entered care homes prior to implementation of the Community Care Act in April 1993. It could be good news for the resident, and bad news for the care provider. Currently there is no restriction on people with preserved rights using their capital below £16,000 to top-up fees or contribute their personal expense allowance to the care costs. Both these are prohibited through local authority charging procedures.
Clause 52This provides for the Secretary of State to review the amount by which a persons resources can be disregarded. It is proposed to increase the capital limits of the means test by restoring them to the April 1996 value (Implementation April 2001). This equates to an increase in the capital limits to approximately £18,500. The NHFA believes that increasing the capital limits substantially would have had a negligible effect on the delivery of long-term care in the UK. Only the richest would benefit whilst the poorest would continue to suffer the already identified shortcomings in the delivery of care services. Additional funding should be delivered for improving services rather than preserving personal wealth.
Disregard of property from the means test for the first three months of state-funded residential or nursing home care (Implementation April 2001). Three months would be a good time frame in which to ascertain whether the residential care is to be permanent or long term. NHFA experience indicates that it takes an average of five months for an older person's property to sell. The benefit to the Government lies in the fact that families will be happier to agree to hospital discharge to a care home if the first three months are free (or subsidised up to the local authority funding rate) thus freeing up NHS beds.
The means test rules still apply, therefore individuals will still have to contribute all their income less their personal expenses allowance and those with other capital in excess of the means test limit will still have to pay the full cost of care. Interim funding currently offered by authorities is below the market rate for care and consequently restricts choice unless a top up can be afforded. As a reason for three months the NHS Plan states that - It will also keep open the possibility of returning home after a period of support and rehabilitation, should people be able and wish to do so." If this is to be interpreted that the first three months is to be regarded as a 'Temporary Stay' then a completely different approach to the means test should be adopted. Present guidance states that residents regarded as temporary cannot claim Income Support until their capital (excluding the value of their home) is below £8,000 and not £16,000 as for permanent residents.
In applying the means test the local authority should allow a reasonable disregard of income to cover continuing home commitments e.g. heating, water, mortgage, rent, service charges, insurance premiums etc. It is not known whether central Government will make available sufficient funds to cover all the additional costs that local authorities may incur in this respect.
Clause 53Allows people who choose more expensive accommodation than the local authority is prepared to pay for to top-up out of their own resources. This may be required for those who choose more expensive accommodation whilst taking advantage of the proposed three-month disregard of property or the loan scheme. It is not clear whether this will also extend to those who have capital of below £16,000 - presently not allowed to use their remaining resources for this purpose.
Clause 54Plans to allow councils to 'lend' older people the cost of residential care secured against the value of their homes. Councils would be allowed to claim the money back from the person's estate (Implementation October 2001). Borrowing money against the property could disadvantage older people. There may be much better ways of utilising such capital to meet care costs. For example, if the asset is realised, the purchase of an immediate need care fee payment plan may require only part of the capital, limit the cost of care and release the remaining value for investment to regenerate the Estate. It is a well-known fact that local authorities do not pay a market rate for residential or nursing home care. This would very much restrict older peoples' choice of accommodation unless the individual has an adequate resource for topping-up. One must also consider the cost of maintaining the property and the income required in doing so. Furthermore, care providers may also find themselves under financial difficulties providing care at lower than profitable rates. Accruing a debt weekly against the property does not reduce the cost of care but merely defers the settlement date and it is proposed to charge interest on the loan from 28 days after the resident has died.
Clause 55Provides new arrangements for cross border placements. It gives local authorities in England and Wales powers to place people in residential care or nursing homes in Scotland, Northern Ireland, the Isle of Man and the Channel Islands. These measures significantly increase the need for individuals and their families to seek specialist advice in considering the financial implications of paying for care and the merits of local authority involvement.
