Feature

posted 29 Jul 2004 in Volume 9 Issue 5

Fair enough?

The Department of Health guidance, Fairer Charging Policies: For Home Care and Other Non-residential Social Services, was issued in November 2001 because of disquiet about the way in which local authorities were devising their discretionary charging policies. PAULINE THOMPSON reviews the research that Age Concern England has commissioned into the implementation of this guidance.

In the 1990s, many local authorities introduced charges for home-care services for the first time or made changes to their charging systems. Reports from the Joseph Rowntree Foundation (1996) and the Audit Commission (1996, 1999 and 2000) drew attention to inconsistencies in charging policies in England and the variation in the amount that people were being charged for the same service. The Department of Health guidance, Fairer Charging Policies: For Home Care and Other Non-residential Social Services¹, sets out the minimum requirements that should be included in charging policies to ensure that charges are reasonable² and it aims to reduce the level of inconsistencies between councils’ policies. However, councils still have considerable discretion.

The Age Concern Institute of Gerontology, King’s College London, was commissioned to investigate the implementation of the policy. The evidence for the research was gathered in the summer and autumn 2003 from:

A postal survey of social-services departments in England (57 per cent response rate);
Interviews with 12 local authority finance officers administering charging policies;
Interviews with 11 service users or their relatives;
A questionnaire distributed to local Age Concerns.

Consultation and implementation

The guidance expected social services to establish what was reasonable to charge through consultation. And, nearly all of the survey respondents reported that there had been a consultation process in their authority; with questionnaires to service users cited as the most commonly used method. However, local Age Concerns expressed mixed opinions about the thoroughness of the consultation and whether it influenced the final policy.

Less than half of the participating local authorities implemented the policy fully by April 2003, the date specified in the guidance. Reasons for the delays given by finance officers included the late publication of the practice guidance (August 2002), the need to consult fully, insufficient resources, delays in the recruitment of new staff and in the installation of new IT systems. A small number of these local authorities indicated that they would not be repaying those whose charges had fallen and that they would backdate any increased charge, contrary to the guidance. It was reported by local Age Concerns in some areas that delays in billing had caused considerable anxiety to older people, who had received bills for several months’ service, sometimes amounting to hundreds of pounds.

Councils that have made substantial changes to their charging policies have faced considerably higher administration costs, and some are even generating less income as a result of implementing Fairer Charging policies.

The effect of Fairer Charging

Many people who previously contributed to the cost of their service are no longer paying because the guidance states that no-one with income below a specified threshold (£131.81 for a single older person in 2004) should be charged. There is now consistency across the country for people on incomes below this level, who are exempt from charging.

The effect on other people receiving services depends on each local authority’s interpretation of the discretionary elements of the guidance and on their previous charging policy. The majority of councils reported that charges have increased for people on higher incomes. People with savings above the limit specified in the guidance may pay all or most of the cost of the service, unless the council has a low maximum charge or subsidises the hourly charge for the service. As one finance officer commented: “We have to maintain services and someone has to pay.”

The Age Concern questionnaire asked councils to report the largest decrease and increase in charges for an older person as a result of the change in policy. The largest decrease ranged from £4 to £292, with an average of £51, while the largest increase ranged from zero to £261, with an average of £71.

The guidance also obliges councils to undertake benefit checks as part of the assessment for charging, and finance officers and local Age Concerns have reported that this has resulted in more individuals gaining benefits and councils gaining income. Most older people receiving more benefits will be better off, in spite of paying more for services, although some councils are, according to a service user, “robbing Peter to pay Paul” by taking most of the benefit in increased charges.

However, changes to policies in some areas have meant that those who were already receiving benefits are now paying more than they used to. The son of one service user was concerned about the increased charge paid by his mother, who was receiving pension credit and a disability benefit. He felt that she could not afford the increase commenting: “They call it ‘fairer charging’, but it’s not fairer.”

Not one of the eleven older people interviewed disagreed with the principle of paying towards the cost of care, but they thought it was unreasonable to pay a large increase. Two service users who had savings had received notification of very steep rises. One was being charged an unsubsidised rate that was more than the council was paying the home-care agency providing her service, while another person was paying double the hourly rate because she needed two carers to help her get up and to go to bed.

There were several comments from service users about the poor quality of the service, such as rushed visits and constant changes of care workers, which had not improved with the increase in price. One user said: “The fact that they were sending someone and funding it, meant that you just had to take what they sent. But now that I’m paying the full cost, I’d like to have some input. The piper calls the tune.”

Those people who were charged the full hourly cost because they received an occupational pension, and/or had savings, felt strongly that it was wrong to penalise people who had worked hard. According to one woman who was caring for her husband, disabled because of a stroke: “We have a private pension of £40 a month. It put us just that little bit over the top. It seems so unfair. My husband never missed a day’s work in 51 years.” Another respondent thought it was unfair that because she had a little capital, which she relied on for her income, she was being treated as if she were Richard Branson.

One-third of the local authorities responding to the survey reported that they had introduced transitional protection and increased charges would rise incrementally over a period of time.

Differences in charging policies

The policies have several elements that affect the final charge made to service users.

The maximum weekly charge

The majority of local authority respondents (71 per cent) have set a maximum, above which no-one will be charged. Maximum charges reported ranged from £23.50 to £400. Other local authorities charge the full cost of the service (for those assessed to pay) or use a banding system for charging.

The hourly charge

The hourly charge for home care set by councils responding to the survey ranges from £3.50 to £15.50, with an average of £9. Four charging systems have a higher hourly rate for people with capital and/or a high income than for other groups. Some councils have variable charges or a banding system to protects people with higher levels of service from paying very high charges.

Income

The guidance gives an income threshold, below which no-one should fall. This is set at basic Income Support levels plus a buffer of 25 per cent (£127.63 in 2003/04, now £131.81 for a single older person). Some councils have a buffer in addition to the one suggested in the guidance. Occupational pensions are counted as income, although earnings are not. A finance officer noted that this discriminated against older people.

Disability benefits such as attendance allowance and the severe disability premium may be taken into account as income, but councils can choose not to do this. Only 15 of the 82 councils said that they did not take into account some or all of these benefits in their calculation of income.

Capital

The guidance states that councils can take into account the service user’s capital in their assessment, using the capital limits in the Department of Health’s Charging for Residential Care Guidance (CRAG), or by using a more generous calculation. All but one of the participating local authorities take capital into account when assessing the charge, and most of these indicated that they charge the full cost, or maximum charge, to those with capital above the limit.

The upper capital limit is £20,000 (2004), and a tariff income of £1 is assumed for every £250 above £12,250. Ten local authorities reported that they do not have an upper capital limit, but continue using the tariff calculation on all capital above £12,250. A few councils calculate a tariff income of £1 for every £500, while others use the deprivation rules found in CRAG.

Partner’s resources

The guidance is unclear on whether the assessment should take only the service user’s income and capital into account. The National Association of Financial Assessment Officers has produced advice and recommends that the partner’s resources should only be taken into account when this is of benefit to the service user. The majority of councils follow this advice. Nine councils participating in the research indicated that they would use a partner’s resources in the calculation of the service user’s charge.

Expenses

Councils are told they must assess the service user’s disability-related expenditure (DRE) if they take disability-related benefits into account. Councils should ensure that an assessment is carried out to establish what items of expenditure to include. However, a small number of local authorities do not make an allowance for DRE because they ignore disability benefits.

Examples given by finance officers of items counted as expenditure include hairdressing, transport to visit friends, a dog for a disabled person, computer equipment and an ironing service. Two elderly people interviewed no longer pay a charge for their services because the amount of disability-related expenses allowed, reduces their income below the threshold. However, some officers were concerned that less well-off elderly people have few eligible expenses because they adapt their lifestyles and ‘do without’. Family carers interviewed gave examples of items that were not included as expenses in the assessment, such as special transport to go on holiday and visits from a chiropodist.

Calculation of the charge

The survey questionnaire included two case studies (see boxes opposite) and asked finance officers to calculate the charges that their council would make in these cases. The responses illustrate the effect of the differences in the interpretation of the discretionary elements of the guidance.

Issues for advisers

Research shows that Fairer Charging has resulted in greater consistency for poorer service users, but for all other service users the ‘postcode lottery’ still exists. There are still large inconsistencies between authorities in setting the level of any maximum charge, what they charge per hour, and what they allow in disability-related expenses.

The charge for a service user or carer with capital, or with an income above the threshold figure, will largely depend upon the level at which local subsidy (if any) has been set. In general, the more disabled a service user is, the more likely it is that he or she will face high charges because the majority of authorities charge by the hour. This is, in effect, an extra tax on disability.

Although there is little advisers can do within the current policy framework, there are issues highlighted by the research that might be of interest to advisers. These include:

Large charge increases. As stated above, few councils offered transitional protection. Where service users were likely to be seriously adversely affected by the changes to policy, then this was supposed to be specifically considered in the consultation (Paragraph 99 of Fairer Charging). It might be worth finding out if this indeed was considered and in what manner, and challenging the reasonableness of large charge increases for the individual;
Disability-related expenses. It is often difficult for clients to think about what disability-related expenses they might have, and then to cost them. Some authorities are proactive, both on their forms and in interviewing services users, in helping them think through all the extra costs. Others are less proactive or take a narrow view of what they will allow. Moreover, some do not explain to service users why they have not allowed certain items, and this is an area where advisers can help to try to get the council to accept legitimate extra costs caused by disability;
The use of the deprivation rules. A few councils have transported these rules, which have specific legislation for residential care, into their domiciliary-care charging policies. There is nothing in the legislation relating to charges for domiciliary care which covers deprivation. This may be an area, if one’s client is adversely affected by the council policy, that would be ripe for a legal challenge;
Couples. Couples remain a huge problem for councils given the lack of clarity of the Guidance. It should only be the service user who is charged, but in a few areas it seems that partner’s resources are taken into account. It is the experience of the author that councils tend to back down when faced with a challenge on this matter.
Back-dated bills. The policy guidance states that no increase in charge should be made before the date of notification (Paragraph 96) and practice guidance says that bills of more than a month should be written off if delays are caused by the council.

Recommendations

This research has reinforced Age Concern’s belief that the only way to achieve fairness is to abolish charges for personal care and carers’ services. This is the primary recommendation. However, a number of recommendations have been made to try to improve the current charging system in relation to policy and practice. In the meantime, if advisers come across cases where they think the council’s charging procedure is adversely affecting older people, Age Concern would be very pleased to hear about them³.

References:

Available (£10) from the Policy Unit Age Concern England. E-mail: policy@ace.org.uk
Section 17 of the Health and Social Service and Social Security Adjudications Act 1983 specifies that authorities can recover charges for community-care services “as they consider reasonable” and in cases where the person shows that his/her means are insufficient to pay the charge, “the authority shall not require him to pay more for it than appears to them that is reasonably practicable for him to pay.”
E-mail: thompsp@ace.org.uk. Age Concern England is unable to address individual cases, but may be able to link with activity by local Age Concerns, and also use the information to inform policy work

Pauline Thompson is a policy officer care finance at Age Concern England. She can be contacted at thompsp@ace.org.uk