IN PRACTICE - Elderly Client Adviser

Feature

posted 1 Jul 1999 in Volume 4 Issue 5

IN PRACTICE

Claiming attendance allowance - An ombudsman's report

In this edition we focus on a recent investigation by the Local Government Ombudsman into a complaint made against Stockport Metropolitan Borough Council in relation to an elderly couple who had been admitted to a nursing home in the borough.

The complaint concerned the loss of attendance allowance payments as a result of undue delay by the Council in assessing and billing the residents in respect of care fees. The Council agreed to settle the complaint by making a compensating payment, but the Ombudsman has nevertheless published the report of her investigation because it raises a matter of public interest.

Readers will be aware of the importance of claiming attendance allowance (higher rate now £52.95) to help meet residential care fees and so protect clients' own resources. The rules regarding availability of this benefit were outlined in some detail in an article in vol. 3 issue 4 of ECA (May-June 1998). In particular, it should be noted that residents who purchase their own residential care, or who have arrangements made for them by the local authority under Section 26 of the National Assistance Act 1948, but meet the full costs of those arrangements, are entitled to claim the attendance allowance.

FACTS

Mr and Mrs X, the parents of the complainant in this case, were resident in "The Hollies", a home with dual registration. Mr X was admitted in 1995, as a privately funded resident. He paid the full weekly charge, and received attendance allowance. In 1996, however, he became entitled to assistance from the Council, which began contributing to his care fees. In consequence attendance allowance was no longer payable.

In 1997 Mrs X was discharged from hospital into The Hollies. Prior to that time the Council has disregarded the value of the jointly owned family home in assessing Mr X's contribution, because his wife was still in occupation. Once she was admitted permanently to The Hollies, however, the value of that property became available to meet both spouses' care fees. Consequently, Mr and Mrs X were then each assessed as liable to pay the full weekly charge from October 1997, and the house was put up for sale. Pending the sale the Council paid both sets of fees in full, whilst recording the fact that Mr and Mrs X were responsible for a steadily increasing debt.

In January 1998 Mr X died, and subsequently the complainant, who was also his attorney received a bill from the Council in respect of his unpaid care fees. Mrs X then began paying fees direct to the home from her free capital resources. The attorney claimed attendance allowance retrospectively from October 1997 in respect of both her parents, on the basis that they were both technically responsible for their own funding from that date, and so should be entitled to benefit. The Benefits Agency took its conventional line, however, determining that because the Council was actually paying the fees to the home - even though it would recover them later - benefit was not available (see CA/11185/1995/*84/96). As a result benefit of more than £1,000 was lost.

The attorney then argued that the Council, given its knowledge of the rules governing payment of attendance allowance, should have put to the family the option of paying full charges from the date of Mrs X's admission to The Hollies, so as to enable attendance allowance to be accessed. Even if money had had to be borrowed to meet the fees, Mr and Mrs X would still have been better off to the extent of more than £100 per week.

The Council accepted this argument, and acknowledged that it should have been more proactive, particularly since Mrs X's social worker was previously aware that the family expected to have to pay full care fees for both spouses as soon as Mrs X became permanently resident at The Hollies. Subsequently, the Benefits Agency, in a one-off decision, agreed to backdate benefit, and arrears of attendance allowance were recovered.

The Importance of this ruling

a) The Ombudsman identifies, quite rightly, the importance of DSS funding through attendance allowance for clients who are in residential care. Although the policy behind the financial changes introduced in April 1993 was that public subsidies for residential care should be channelled through local authorities, the outcome has been rather different and, in practice, a great deal of financial support is still accessed through the DSS. This makes life difficult for clients and their advisers. The financial picture is highly complex; benefits rules, in particular are daunting, and the claiming process can be a nightmare. Yet a successful claim makes a significant financial difference, as in this case.

b) The Ombudsman's report does not spell out the fact that, at the point in 1996 when the Council started to top up Mr X's care fees (if not before) it must have assumed contractual responsibility for his placement under Section 26 of the National Assistance Act 1948. Local authorities have no powers to subsidise private arrangements; the NAA requires them to be direct purchasers of residential care. It is also implicit in the ruling that the Council made Section 26 arrangements in respect of Mrs X as soon as she was placed at The Hollies.

Local authorities frequently assume that section 26 arrangements can only be made where the local authority is also providing a financial subsidy. Consequently when a resident becomes self funding - for instance, following sale of a property - the local authority may terminate its section 26 contract with the provider and require the resident to make his or her own arrangements directly with the home. This is not a legal requirement, however, and such a changeover should be resisted because prices are usually higher under "own" arrangements, and there is less protection for residents in the event of unsatisfactory care or if the home runs into financial difficulties.

c) It is important, in particular, for local authorities to understand that their making section 26 arrangements is not incompatible with a successful claim for attendance allowance by a resident, provided that the latter is meeting the care fees in full. This situation in fact allows self-funding residents to have the protection of a local authority contract, plus the benefits of the attendance allowance. It goes without saying that, if such a favourable outcome can be facilitated, then legal advisers and local authorities should work towards that end, because it is in everyone's interests to achieve it.

d) The Ombudsman's ruling is given added significance by the fact that attendance allowance claims may not be backdated. Although the ruling itself indicates that the Benefits Agency did entertain the attorney's claim, only to rule it out because care fees were being paid by the Council during the period at issue, the claim was in fact timebarred under section 65 of the Social Security Contributions and Benefits Act 1992.

This means that claims must be made at the moment when residents start to fund themselves in full. Benefits, and general financial strategies need to be worked out before placement, wherever possible.