Care Bill [Lords]

Written evidence submitted by FirstStop (CB 36)

Dilnot effect on average person living as a Self-Funder in a care home until reaching £72,000 cap – Care Bill Part 1 Clause 15

About EAC FirstStop Advice

EAC FirstStop Advice for Older People is a free information and advice service designed to help older people decide how best to meet their needs for support, care housing and accommodation. EAC FirstStop advice is provided nationally and locally by telephone, Email and web services, and face to face locally through 25 partner agencies. EAC FirstStop is most likely the leading advice service for older people and their families and carers in the UK, integrating housing, care money, legal issues and rights advice across the whole spectrum of care and accommodation from adapting your own home through to end of life nursing home care. It is led by the charity Elderly Accommodation Counsel (EAC) and mainly funded by the Department for Communities and Local Government since 2009, which is also supporting its expansion of local face to face services during 2013-15.

Care Bill Part 1 Clause 15

Using figures from the Dilnot report and applying Government inflation rate to 2016/17

Dilnot Report 2012/current

Inflated to 2016/17

Median Property and Savings Wealth

124,000

146,320

Median Net Income

11,284

13,315

Attendance Allowance (AA)

3,827

4,516

Personal Expenses Allowance PA

1,175

1,386

Income less Personal Expenses (PX) Retained

10,109

11,929

Average Care Home fees PA

28,600

33,748

Living Cost Element of Care Home Fees

12,000

Capital Threshold Low

17,000

Capital Threshold High

118,000

Using the above figures ignoring any further annual inflation and applying the revised means test results in the following:

Scenario 1: Applying Dilnot when capital diminishes to £118,000

Care

Living Costs

Income less PX

AA £87 per week

From Capital Tariff £1 / 250

From Capital

LA Payment

Residue Capital from £146,320

Year 1

21,748

12,000

(11,929)

(4,524)

(17,295)

129,025

Year 2 (8 months Self funding)

14,499

8,000

(7,953)

(3,016)

(11,530)

117,495

Year 2 (4 months LA Funding)

7,249

4,000

(3,976)

(348)

(7002)

271

110,493

Year 3 LA Funding

21,748

12,000

11,929

Nil

(19,446)

2,373

91,047

Year 4 to CAP(3.73 months)

6,756

3,727

3,707

Nil

( 4,788)

1,988

86,259

Total Cost to Local Authority £4,632

Total Cost to Individual from Capital £60,061

On accepting local authority support attendance allowance is lost after 4 weeks of LA funding. This raises the question: When is it worth seeking local authority support?

Scenario 2: Not Applying Dilnot and keeping Attendance Allowance

Care

Living Costs

Income less PX

AA £87 per week

From Capital Tariff £1 / 250

From Capital

LA Payment

Residue Capital from £146,320

Year 1

21,748

12,000

(11,929)

(4,524)

(17,295)

129,025

Year 2

21,748

12,000

(11,929)

(4,524)

(17,295)

111,730

Year 3

21,748

12,000

(11,929)

(4,524)

(17,295)

94,435

Year 4 to CAP

6,756

3,727

(3,707)

(1,406)

(5,370)

89,065

Total Cost to Local Authority £ Nil

Total Cost to Individual from Capital £57,255

Saving £2,806

The point at which it ceases to be beneficial to claim Attendance Allowance and accept LA support is when the capital tariff applied by the local authority on £118,000 would diminish by the equivalent of AA (21,750/250 x £1 = £87) thus £96,250

Scenario3: Point at which to cease AA and Apply for LA Funding

Care

Living Costs

Income less PX

AA £87 per week

From Capital Tariff £1 / 250

From Capital

LA Payment

Residue Capital from £146,320

Year 1

21,748

12,000

(11,929)

(4,524)

(17,295)

129,025

Year 2

21,748

12,000

(11,929)

(4,524)

(17,295)

111,730

Year 3 Self Funding 46 wks

19,238

10,615

(10,552)

(4002)

(15,299)

96,431

Year 3 LA Funding 6 wks

2,510

1,385

(1,377)

(348)

4 wks

1,271

899

95,160

Year 4 to CAP 3.73 months

6,756

3,727

(3,707)

5.053

1,723

90,107

Total Cost to Local Authority £2,624

Total Cost to Individual from Capital £56,213

Saving £3,848

It therefore seems iniquitous that self-funding residents can be inadvertently out of pocket because of the way DWP benefits and LA Charging work together. To overcome this a change in DWP regulations would be required to enable individuals to retain their Attendance Allowance when LA funding commences

There would be a cost involved for the DWP to allow Attendance Allowance to be retained, see scenarios 2 and 3 below, but these costs would be incurred anyway if the individual were to understand Dilnot and take the advised route 2 or 3. Counteracting this there would however be a cost saving to the LA because AA would count as income and contribute towards the cost.

Scenario 4: Applying Dilnot when eligibility met after 1.5 years

According to BUPA Care Homes who accommodate both state funded and self funding care home residents the average life expectancy in their care homes is 2.5 years for state funded residents and 4 years for self funding residents. The reason for this is because Self- funding people enter care earlier than local authority funded residents based on need. Dilnot recommends "a minimum eligibility threshold to be set nationally at ‘substantial’", therefore if BUPA’s figures are correct, self-funding residents may have to wait 1.5 years before meeting the need threshold. Taking 4.8 years to reach the £72,000 Cap.

Care

Living Costs

Income less PX

AA £87 per week

From Capital Tariff £1 / 250

From Capital

LA Payment

Residue Capital from £146,320

Year 1

21,748

12,000

(11,929)

(4,524)

(17,295)

129,025

Year 2(6 months Self funding)

10,874

6,000

(5,964)

(2,262)

(8,648)

120,377

Year 2 Cap Start (7 wks Self Funding )

2,927

1,615

(1,605)

(609)

(2,328)

118,049

Year 2 (19 wks LA funding)

7,947

4,385

(4,359)

(348)

(7,625)

Nil

110,424

Year 3 (LA funding)

21,748

12,000

(11,929)

Nil

(19,432)

2,387

90,992

Year 4 (LA funding)

21,748

12,000

(11,929)

Nil

(15,390)

6,429

75,602

Year 5 to CAP 42 wks)

17,630

9,692

9,635

Nil

(9,845)

7,842

65,757

Total Cost to Local Authority 16,658

Total Cost to Individual from Capital £80,563

There is a concern that once you reach your cap the local authority would only assist with your care costs up to the amount they would usually pay (their usual rate) for someone with your assessed needs. If the care chosen exceeds that cost you will be required to find a third-party to top-up the cost. Present law does not permit individuals to fund their own top-ups. However, if the aforementioned top-up law was changed to permit individuals to use their capital below the means test threshold then there is greater depletion of capital.

Scenario 5: Applying Dilnot with required £100 pw Top Up

Care

Living Costs plus Top- up

Income less PX

AA £87 per week

From Capital Tariff £1 / 250

From Capital / Top up

LA Payment

Residue Capital from £146,320

Year 1

21,748

17,200

(11,929)

(4,524)

(22,495)

123,825

Year 2 (13 wks Self funding)

5,437

4,300

(2,982)

(1,131)

(5,624)

118,201

Year 2 (39 wks LA Funding)

16,311

12,900

(8,946)

(348) 4 weeks

(15,756)

(3,900)

261

98,545

Year 3 LA Funding

21,748

17,200

(11,929)

Nil

(16,961)

(5,200)

4,858

76,384

Year 4 to CAP

6,756

5,343

(3,707)

Nil

(3,800)

(1,616)

2,976

70,968

Year 4 onwards post cap top-up per annum from capital

(5,200)

Total Cost to Local Authority £8,095

Total Cost to Individual from Capital £75,352 to cap plus a further £5200 per annum thereafter

Summary

Cost To LA

Additional AA Cost to DWP

Cost to Citizen

Scenario 1- Applying Dilnot on reaching £118,000 threshold

£4,632

Nil

£60,061

Scenario 2 - Not applying Dilnot until reaching Cap

Nil

7,090

£57,255

Scenario 3 - Dilnot timed entry

£2,624

5,510

£56,213

Scenario 4- Delayed eligibility criteria

£16,658

Nil

£80,563

Scenario 5 - With top-up from capital

£8,095

Nil

£75,352

plus £5,200 pa post Cap

February 2014

Prepared 5th February 2014