Attendance Allowance and Residential Care

Feature

posted 1 May 1998 in Volume 3 Issue 4

Attendance Allowance and Residential Care

In his article on benefits for disability published in the ECA earlier this year Alan Robinson referred to the regulations dealing with entitlement to attendance allowance for people living in residential care homes or nursing homes as "impenetrable", and declined to state a firm view a to who is entitled and who is not, The purpose of this paper is to analyse those regulations in more detail, and to give the writer's opinion as to the practical implications. Readers are referred to Alan Robinson's article for a statement as to the basic rules of entitlement to attendance allowance1.

In principle, attendance allowance may remain or become payable after a disabled person has entered a residential care home or nursing home. However, this benefit is targeted at a need for personal care, and given that provision of such care is the main function of residential accommodation, there is a policy objection to what amounts to double funding of the same need by local authorities and by the DSS. Consequently the regulations seek to distinguish between claimants whose accommodation is, and is not publicly funded. Generally speaking the former are disentitled to the attendance allowance but the late may claim it. As is so often the case, however, the devil is in the detail.

Regulations 6 to 8 of the Attendance Allowance Regulations 1991 apply to claimants who are in residential care2. Regulation 6 provides that any person who is maintained free of charge as an in-patient in hospital, or in a "similar institution", is disentitled to attendance allowance. In particular this covers the situation where a health authority purchases a nursing home bed under section 23 of the National Health Service Act 1977, in circumstance where the patient meets local criteria for entitlement to the fully funded NHS continuing care. Some patients who are very severely disabled, or who are at an advanced stage of Alzheimer's Disease will fall into this category.

Regulation 7(1) goes on to state that attendance allowance is not payable to a person for whom "accommodation is provided-

a) in pursuance of -

i) Part III of the National Assistance Act 1948 & & & & & & ..

b) in circumstances where the cost of the accommodation is or may be borne wholly or partly out of public or local funds& & & & & & & "

Residents in Part III Accommodation

The effect of para (a) above is that, where a resident is placed under section 21 of the NAA in a home which is owned and/or managed by social services, attendance allowance is not available in any circumstances. In particular, even residents who are fully self-funding are excluded from benefit3.

Where care arrangements are made by the local authority with an independent provider under section 26 of the NAA, para (a) again applies, but only in circumstances where the local authority has accepted a financial responsibility for the placement, following an assessment of need under section 47 of the NHSCCA 19904 and an assessment of means.

All residents covered by reg 7(1)(a) are prevented from making first-time claims after they have entered residential care, and previous entitlement ceases, subject to dispensation in respect of the first 28 days in the residential establishment5.

Residents Who Make Their Own Arrangements In Independent Homes

Where an older person purchases his or her residential care directly from a provider, and the local authority is not directly involved, attendance allowance remains available to defray the cost of care. Since receipt of benefit will help to preserve capital, it is very important for advisers to identify entitlement, and to assist their clients in pursuing claims.

Sometimes the local authority may provide social work advice and assistance to help an older person to find a suitable residential placement. Provided, however, that such assistance falls short of making contractual arrangements with the provider, section 26 of the National Assistance Act does not apply, and entitlement to attendance allowance is not excluded. This point is now of some importance where a resident has made his or her own care arrangements, but is or becomes unable to afford the care fees without public assistance. As will be seen a local authority subsidy may not be the only option in such cases.

Accommodation Where The Cost "Is Or May Be Borne" Out Of Public Funds

For older clients, publicly funded accommodation is almost invariably, provided either by the local authority under Part III of the NAA 1948, or by the NHS under a section 23 arrangement. As has been explained, in such cases residents are ineligible for attendance allowance. Other provisions under which the cost of care "is borne" out of public funds are unlikely to be relevant.

However, the application of the "may be borne" provision is highly problematic. It might be argued, for example, that the fees of any older person needing residential care "could" be borne by the local authority because its statutory responsibility under section 21 NAA is so broad. It has been held, however, that the section 21 responsibility is one of last resort, because it arises only where accommodation is "not otherwise available" to the resident. This means that if an elder person can make and pay for her/his care arrangements, then the accommodation is "otherwise available", and the local authority statutory powers are excluded. As a result attendance allowance remains payable.

This principle was applied in a case where an elderly lady had previously lived in a council- run home, which was transferred to the voluntary sector. She had always paid her care fees out of her own resources. The House of Lords held that she was entitled to the attendance allowance after the transfer because the local authority was not (on the facts) making arrangements for her under section 26 of the NAA 1948, and because the cost of their accommodation was not, nor could it be, borne out of public funds6.

The "Loophole Option" For Funding

The view that NAA arrangements are an option of last resort has also led to DSS acceptance of a funding option that clearly was not intended to be available to residents. The regulations do not prevent a resident from making her/his own financial own financial arrangements by claiming income support and topping up with attendance allowance. The "may be borne" rule does not apply to bar the claim to attendance allowance because residential care is available to the claimant otherwise than via the NAA 1948. Recent decisions by the Social Security Commissioners support this loophole, and it is now incorporated into paras 7721 - 7723 of the Adjudication Officer's guide. An example of loophole finding is set out in the postscript to this article.

Residents Under Section 26 Arrangements Who Are Nevertheless Fully Self-Funding

The local authority's statutory responsibilities under Part III of the NAA 1948 are not restricted to older people of limited means. They are triggered by a need for care, not by financial needs, and section 22 makes it clear that residents will be expected to pay their way if they have sufficient means. The protection offered by a local authority contact is an advantage for the vulnerable person, wealthy or poor, and local authorities are able to negotiate keener prices with independent providers than can individuals, acting alone.

Therefore, the question whether a resident for whom arrangements are made under section 26, but from whom the local authority is recovering the full economic cost of the core bed, is entitled to attendance allowance is an important one - from the perspective of both the individual resident and indeed of the local authority. Reg 8(6) of the Attendance Allowance Regulations excludes reg 7 where the resident is in a home which is not owned and/or managed by social services (i.e. under a section 26 arrangement) and where the whole cost of the accommodation is met out of the resident's own resources, or wholly or partly with the assistance of another person or charity. In CAO v Steane7 it was held that the whole cost is paid if the resident meets the full fees charged by the home. Any additional contributions made by a local authority towards running costs were irrelevant. A subsequent decision by the Social Security Commissioner8 suggests, however, that reg 8(6) only applies where the resident makes payments under a liability which is owed directly to the provider of the accommodation. His reasoning is that, if a resident in a local authority home is prevented from claiming the attendance allowance, even when she/he is meeting the full cost of the care, the same should apply to the to a section 26 arrangement, where the resident is protected by the local authority contract with the provider and cannot, for example, be evicted from the residential accommodation if she/he fails to pay the fees. There is a good deal of logic in the Commissioner's view, and his decision can (just) be read alongside CAO v Steane. Nevertheless, in practice, it appears that the Benefits Agency is prepared to allow attendance claims from all residents in independent sector accommodation who are self-funding. There is something to be said, however, for arrangements, which are permitted under section 26(3)(a) of the NAA, with the agreement of all parties concerned, whereby a resident pays the fee direct to the provider but remains under the umbrella of a local authority purchasing arrangement.

Retrospective Self-Funding

Many older people enter residential care on the basis that their former home is to be sold to meet the fees. The local authority does not have the statutory powers to force a sale, but will base its assessment of the resident's contribution towards the fees on the open market valuation of the property. Pending sale the resident is likely to be in debt to the local authority, which will secure its position by registering a charge on the property under section 22 HASSASSAA 19839. As regards attendance allowance claims, it has been argued that benefit should be available retrospectively since, once the property is sold, the resident becomes self funding and the local authority also recoups the full care fees back to the date of placement. At the moment the position is uncertain, and there are several conflicting decisions of the Social Security Commissioners. Legally it should be arguable that attendance allowance is payable form the date of placement, but the Benefit's Agency's current practice is only to pay benefit from the date the property is sold. It should be noted that arrears of benefit following a review are now limited to a period of one month10.

Respite Care

Respite care arrangements can give rise to very complex problems with attendance allowance. Two or more short periods in a home and/or in hospital which are separated by less than 28 days are linked under the regulations, and count as one period11. Once the linked periods exceed 28 days, attendance allowance is no longer payapble12. It is important, therefore, to try to leave, if possible, more than four weeks between periods of respite. Failing this an occasional period of more than 28 days without respite will allow the link to be broken and the entitlement to start again.

Postscript - Example Of The Loophole Option

Mrs Williams has a house worth £90,000, a few other assets and a modest income. She can no longer manage at home and is looking for a suitable residential care home.

Mrs Williams has been advised that she will have to sell her house to fund the placement, but she is aware that it may take some time to sell it. She has also been advised that if her local authority makes the care arrangements they are likely to charge the house immediately in order to secure payment of the home fees. The Benefits Agency, on the other hand, will continue to disregard the value of the house for at least six months and possibly for much longer after Mrs Williams enters residential care13. During that period she may be able to fund the placement without involving the local authority, provided that her son agrees to pay a top-up.

Margaret Richards.
The author is a solicitor and community care adviser

Accommodation Charge £250
Mrs Williams's resources:
Retirement Pension £64.70
Income Support £108.85
Personal Allowance £50.35
Higher Pensioner Premium £27.20
Severe disability Premium £38.50
Residential Allowance £57.50
Application Amount £173.55
Attendance Allowance £51.30
£224.85

1 ECA, vol 3, issue 2, p 9. Throughout this article all references to attendance allowance should be taken to include the disability living allowance (care component). In practice the majority of older clients will wish to claim attendance allowance rather than DLA (care component)

2 Social Security (Attendance Allowance) Regulations 1991 SI No. 2740.

3 Reg 8(6) Social Security (Attendance Allowance) Regulations 199; see post.

4 National Health Service and Community Care Act1990

5 Social Security ( Attendance Allowance) Regulations 1991, reg 8(1)

6 Steane v Chief Adjudication Officer [1996] 4 AER83

7 Op cit

8 CA/11185/1995*84/96

9 Health and Social Services and Social Security Adjudication Act, 1983

10 Reg 59(1) and 63 A of the Social Security (Adjudication) Regulations 1995

11 Reg 8(2) of the Social Security (Attendance Allowance) Regulations 1991

12 Ibid. Reg 8(1)

13 Schedule 10 para 26 to the Income Support (General) Regulations 1987