Archived decisions
Contact: David Ward ext 7259
1. The Social Care Policy Review Committee, at its meeting on 22 March 2002, received a report which explained the Government's new mandatory guidance on charges for non-residential services. In summary, although the intentions of the County Council charging policy were close to the national guidance, a number of details did not concur. Unfortunately, because of these differences, implementation of the new guidance was estimated to have a significant impact on the level of income generated from charges, with a reduction of around £2m (out of a total of £4m budgeted) likely. All service users in the current bands 2 and 3 - totalling nearly 3,700 people - would cease making a contribution towards the cost of their care. Implementation was required in two stages, from 1 October 2002.
2. The report set out a number of charging options, within the limitations imposed by the new guidance, and described a process for consultation with service users. The guidance requires that any changes to policies are the subject of such consultation. The Committee agreed to advise the Executive Member to approve:
a. consultation with users about how best to implement the changes required to the County Council's charging policy for non-residential services; and
b. full investigation of the charging options identified in the report.
3. The purposes of this report are to inform the Policy Review Committee about the findings of the consultation, to update estimates of costs associated with implementation of the new guidance and to put forward recommendations for changes to the existing charging policy for later approval by the Cabinet.
Consultation
4. Consultation with service users fell into two distinct parts: fact-finding about their financial circumstances and asking their opinions about a quite narrow range of options for altering the existing charging policy. The options are necessarily narrow, given the very limited flexibilities imposed by the new guidance.
5. The fact-finding element was necessary because the information already available, drawn from financial assessments of existing service users, was incomplete and provided an inadequate base for estimating both the financial impact on the County Council of implementing the new guidance and the implications of different policy change options. Many existing users (those in receipt of Income Support) currently receive an abbreviated financial assessment. The new guidance requires the County Council to identify items of disability-related expenditure beyond those currently allowed. Some groups of service users, notably direct payments recipients and learning disability day services attenders, are not charged on a means-tested basis and so do not receive a financial assessment. Questions, therefore, were asked about the receipt of a range of benefits and about disability-related expenses.
6. Opinions were sought on three questions:
a. whether all service users should pay the same rate for the services they receive? (currently charge rates are banded)
b. whether the County Council should take account of savings and capital in the financial assessment? (currently interest only is taken into account)
c. Whether the County Council should take a larger proportion of disposable income (ie that which is left once allowable expenses are deducted from assessable income) in calculating charges? (currently an upper limit, related to income, is applied)
7. Three separate consultations were carried out: with users of domiciliary, day and sitting services supplied or arranged by the County Council; with recipients of direct payments (scheme A); and with carers of people attending learning disability day services. The reason for this is that the circumstances of the three groups are different. People in the first group are already charged for services, with the charge being based on a financial assessment. People in the second group are charged, but on a flat-rate basis with the charge being deducted at source. People in the third group are not currently charged for this service.
8. A questionnaire was sent to all service users, or their agents, (just under 7,000 people) in the first group at the end of March 2002 with a request that they be completed and returned by 7 May 2002. Just over 2,700 completed questionnaires have been returned - a very satisfactory response rate of 39%.
9. A slightly different questionnaire was sent to all scheme A direct payments recipients (approximately 400 people) in mid-April 2002 with a request that they be completed and returned by 20 May 2002. 191 completed questionnaires were returned - a very satisfactory response rate of 47%.
10. The method used for people attending learning disability day services was somewhat different. Discussions were held with Mencap who were able to supply very helpful information, in aggregate, about the financial circumstances of service users. This information was gained through their benefits advice work. Following this, meetings were held with the carers of service users in three learning disability day services to establish the nature and cost of those disability-related expenses uniquely associated with learning disability. Additionally, a sample of carers were asked to complete questionnaires similar to those completed by the other groups.
Results
11. The factual information - receipt of benefits and disability-related expenses - has been incorporated into the information presented in the Options section below and is not reported on here. This section focuses on the opinions given in response to the questions set out in paragraph 6 above.
12. The first question was: should all service users pay the same rate (ie per hour or per day) for the services they receive? This was asked of existing service users only, since a single rate already applies to direct payments recipients. In response:
1,260 people replied 'yes' (50%)
517 people replied 'no' (20%)
761 people replied that they didn't know (30%)
13. The information accompanying the question pointed out that a single rate would not necessarily affect service users' weekly charges since they would only pay what they were assessed as being able to afford. Those people whose charge was 'capped' by the current upper limit would pay no more, irrespective of the amount of service they received, whether the current banded charges were retained or a higher, single rate was introduced. Service users in receipt of a small amount of care, such that their current charge did not reach the upper limit would pay more in total if a higher, single rate were to be introduced, though, again, no more than they were assessed as being able to afford.
14. Once the responses from those people who were unable to express a preference are removed, it is clear that a substantial majority of people (71%) would prefer a single rate per hour (for domiciliary care and sitting services) or per day (for day services).
15. The second question was: should we take into account people's actual savings and capital? in addition to the interest people earn on any savings and investments. This question was asked both of service users and direct payments recipients. The optional responses and the numbers (and percentages) of people agreeing are set out in the table below.
Response |
Service users' views |
Direct payments recipients' views |
Keep things as they are now |
1,394 (54%) |
79 (48%) |
Only take account of savings and investments over a certain level |
662 (25%) |
61 (37%) |
Take account of all savings and investments |
38 (2%) |
3 (2%) |
Take account of all savings and investments and the value of any property |
39 (2%) |
5 (3%) |
Don't know |
466 (18%) |
15 (9%) |
16. The responses to the question clearly indicate a strong preference for, as now, only taking into account interest earned on savings and investments. Once the responses from those people unable to express a preference are removed, 65% of service users and 53% of direct payments recipients preferred this, although a substantial minority (31% of service users and 41% of direct payments recipients) were prepared to have their capital over a prescribed amount taken into account.
17. The third question concerned the proportion of 'disposable income' taken into account in calculating the charge. This was asked both of service users and direct payments recipients, although slightly differently. Users of chargeable services where upper limits currently apply were asked whether a higher proportion of disposable income should be taken into account or not and, if they agreed that it should, the proportion that should be taken into account. Direct payments recipients, who are subject to a flat-rate charge where no regard is paid to disposable income, were asked what proportion of disposable income they felt should be taken into account. The responses are set out in the table below.
Response |
Service users' views |
Direct payments recipients' views |
Agree to a higher proportion of disposable income being taken into account |
266 (11%) |
|
Of those agreeing that a higher proportion of disposable income should be taken into account: |
||
Take 100% into account |
32 (12%) |
0 (0%) |
Take 75% into account |
24 (9%) |
4 (2%) |
Take 50% into account |
142 (53%) |
29 (17%) |
Other |
2 (0.8%) |
81 (48%)1 |
Don't know |
66 (25%) |
54 (32%) |
18. The current arrangements for upper limits are complicated and vary according to charging band. For bands 2 and 3, into which fall people in receipt of income support, the upper limit is set at one-third of the attendance allowance or disability living allowance received (currently, £12.55 per week for band 2 and £18.75 for band 3). For bands 4 to 7, the upper limit is set as a proportion of disposable income - the difference between assessable income and allowable expenses - and that proportion increases through the bands with the base being one-third of the first £50 of weekly disposable income (band 4)2. Notwithstanding these complexities, the objective of upper limits is to ensure that service users are left with some disposable income after their basic living and disability-related expenses are taken into account and charges made. The new guidance approaches the same objective from a different position - a 'buffer' of 25% above the income support level is allowed at the outset, a wider range of disability-related expenses and council tax payments are allowed, and earnings disregarded, before disposable income is calculated. Continuation of upper limits in their present form would mean a double allowance for extra expenses not associated with disability.
19. This is illustrated in the following example of someone whose income, from pensions, benefits and interest on savings and investments, amounts to £250 a week. The first column shows how the upper limit would be arrived at under the existing policy, the second how it would be arrived at using the new rules but retaining the current approach to upper limits. Under the current policy, this fictitious service user would be placed in band 5 but in band 4 under the new rules and would, therefore, also benefit from a lower charge rate.3
Current policy |
New rules | |
Weekly income |
£250 |
£250 |
Deduct: housing costs |
£40 |
£40 |
general expenses |
£98 |
£123 |
Council Tax payments |
£18 | |
disability-related expenses |
£25 |
£25 |
Disposable income |
£87 |
£44 |
Upper limit |
£35 |
£14 |
20. The table also illustrates the impact of different approaches to the amount of disposable income which might be taken into account in a new policy. Taking account of 100% of disposable income (£44) would leave this service user worse-off by £9 a week, if paying at the upper limit. Taking account of 75% (£33) would leave the user better off by £2 a week.
21. The responses to the question clearly indicate that few service users (11%) would be prepared to agree to a higher proportion of their disposable income being claimed in charges than is the case now, though this proportion rises to 19% once 'don't knows' are excluded. Of this group, by far the greatest number would prefer the proportion going in charges limited to 50%. However, it should be recognised that most people who responded will not have been able to make the kind of calculation shown above and assess the impact of changing the rules on their own personal situation. Only a minority of direct payments recipients were prepared to accept that any part of their disposable income should be available to pay charges.
Options for policy change
22. The report to the March 2002 meeting of the Social Care Policy Review Committee identified a number of options, previously considered by the Resources Sub-Committee of the Social Services Committee in January 2002. These were:
a. increasing rates within the non-residential charging policy
b. charging for day care - learning disabilities and mental health
c. review of parental contributions for looked-after children
d. charging for services for children with disabilities
e. charging for transport
f. charging for aids and equipment
23. The focus of this report is non-residential services for adults, so c and d are not considered here. They will be returned to later in a separate report. Charging for transport (e) has not been considered further since the conclusion of the earlier report, drawing on the report of the Best Value review of transport, was that 'limited income would be generated by introducing a transport charge' and that it was not considered cost-effective, 'given the initial set-up costs and administrative workload' (paragraph 10.7). The report also referred to the Best Value review of equipment services which also concluded that charging for aids and equipment (f) would not be cost-effective. Hence this option has not been pursued either.
24. The remaining two options - changes to the existing non-residential charging policy and charging for learning disability and mental health day services - are explored here. They should be read in the context of a current income (in a full year) to the County Council from charges for non-residential services for adults of around £4m and a potential loss of £2m through the implementation of the new government guidance.
Option 1: changes to the existing non-residential charging policy
25. The March report identified three possible ways of changing the policy in order to reduce the impact of the Government's new guidance on the County Council's income:
a. remove the banding system and apply standard hourly and daily charges to all service users;
b. take into account all, or a greater part of, service users' disposable income in calculating the charge;
c. change the treatment of capital such that, for instance, service users with a savings capital of £19,000 (the capital threshold used in assessing charges for residential services) or more would be required to meet the full cost of their care.
26. Using the additional information on disability-related expenses and receipt of benefits gathered from the consultation, it has been possible to model the effects on the County Council's income and on service users' financial circumstances of changing to a single rate with varying proportions of disposable income taken into account. The overall income effect will vary according to the amount of care received - the more care, on average, that is provided, the greater the cost to the service user and the greater the County Council's income.
27. The table below illustrates the impact on service users in the four bands that could remain chargeable of introducing a single hourly rate for domiciliary care of £9.85 - the current band 7 charge. Bands 1 to 3 are not included since implementation of the new government guidance will have the effect of removing service users in these bands from charging. It uses the mid-point of bands 4, 5 and 6 for disposable income and the bottom of band 7. It assumes an average of 5 hours domiciliary care a week. Day services (discussed below) and sitting services are ignored.
Weekly |
Band 4 |
Band 5 |
Band 6 |
Band 7 |
Disposable income |
£25 |
£75 |
£125 |
£150 |
Upper limit |
£8.33 |
£29.17 |
£58.34 |
£74.97 |
Cost of 5 hrs domiciliary care (@ £9.85 an hour) |
£49.25 |
£49.25 |
£49.25 |
£49.25 |
Charge that would be paid |
£8.33 |
£29.17 |
£49.25 |
£49.25 |
Cost of 5 hrs domiciliary care at current hourly rates |
£11.75 |
£18.75 |
£34.50 |
£49.25 |
Current charge |
£8.33 |
£18.75 |
£34.50 |
£49.25 |
Difference |
0 |
£10.42 |
£14.75 |
0 |
28. The table shows that, under the current upper limits policy, introducing a single hourly rate for domiciliary care at the current band 7 rate would have the effect of substantially increasing the average contribution made by service users in bands 5 and 6. The weekly charge for 5 hours of domiciliary care for the band 5 user would increase by £10.42 (56%) while that of the band 6 user would increase by £14.75 (43%). The average band 4 user would be protected by the upper limit and their weekly payments would be unaffected. Given that the hourly charge for domiciliary care would remain at the current band 7 level, band 7 users would also be unaffected.
29. However, it is clear that the current upper limits policy will have to change in order to conform to the government's new mandatory guidance. The table in paragraph 19 gave an illustration of this. The table below includes the income and deductions profiles for typical older people in bands 4 to 7. The information is derived, in part, from scenarios given in the government's guidance. The table shows that band 4 users, on average, will have no disposable income, under the new rules and, therefore, could not be expected to make a financial contribution towards the cost of their services. Service users in bands 5, 6 and 7 would have disposable income and, were this to be taken into account in its entirety, would be expected to pay a weekly charge. The `typical' service users in bands 6 and 7 would pay the full cost of the 5 hours of domiciliary care a week assumed in the table in paragraph 27 (£49.25), while `typical' service users in band 5 would contribute £32.47 towards this cost.
30. The next table shows the effect of taking account of different proportions of disposable income on the weekly charge for 5 hours of domiciliary care charged at £9.85 an hour compared with the current cost.
Band 4 |
Band 5 |
Band 6 |
Band 7 | |
Disposable income (from table in paragraph 29) |
£0 |
£32.47 |
£82.47 |
£132.47 |
75% of disposable income |
£0 |
£24.35 |
£61.85 |
£99.35 |
50% of disposable income |
£0 |
£16.24 |
£41.24 |
£66.24 |
25% of disposable income |
£0 |
£8.12 |
£20.62 |
£33.12 |
Weekly cost of 5 hrs domiciliary care @ £9.85 an hour |
£49.25 |
£49.25 |
£49.25 |
£49.25 |
Weekly charge at: |
||||
100% of disposable income |
£0 |
£32.47 |
£49.25 |
£49.25 |
75% of disposable income |
£0 |
£24.35 |
£49.25 |
£49.25 |
50% of disposable income |
£0 |
£16.24 |
£41.24 |
£49.25 |
25% of disposable income |
£0 |
£8.12 |
£20.62 |
£33.12 |
Difference from current charge when different levels of disposable income are taken into account and domiciliary care charged at £9.85 an hour: |
||||
Cost of 5 hrs domiciliary care at current hourly rates |
£11.75 |
£18.75 |
£34.50 |
£49.25 |
100% of disposable income |
-£11.75 |
+£16.72 |
+£14.75 |
£0 |
75% of disposable income |
-£11.75 |
+£5.60 |
+£14.75 |
£0 |
50% of disposable income |
-£11.75 |
-£2.51 |
+£6.74 |
£0 |
25% of disposable income |
-£11.75 |
-£10.63 |
-£13.88 |
-£16.13 |
31. The above table shows that band 4 service users would be better off whatever level of disposable income was taken into consideration and band 7 service users would be unaffected, unless the maximum proportion of disposable income that could be taken into account was set at 25% when their average weekly charge level would also fall. The average weekly charge for service users in bands 5 and 6 would increase very substantially with a policy of taking into account 100% of disposable income (89% for band 5 and 43% for band 6). The increase would amount to 30% for band 5 service users and 43% for band 6 service users with a policy of taking 75% of disposable income into consideration. At 50%, service users in band 5 would be better off, while the average weekly charge for band 6 service users would increase by 20%.
32. Some examples are given in Appendix 1 of the calculation of disposable income and the determination of whether or not charges would apply under the new rules.
33. The translation of the above analysis into annual income for the County Council is shown in the table below. It uses the current band 7 rate (£9.85 an hour for domiciliary care) as the single rate and assumes an average of 5 hours domiciliary care per service user per week. The existing system of upper limits would reduce the projected loss of income resulting from the government's new guidance to £1.7m while changing the existing upper limits to a percentage of disposable income for all service users would reduce this loss to £0.7m (if 100% of disposable income was claimed for charges) or £1m (if 75% of disposable income was claimed) or £1.4m (at 50% of disposable income). Claiming 25% of disposable income would increase the loss of income.
34. Undoubtedly, further refinements could be made to these calculations: the existing, and future, rules are complex and the financial circumstances of individual service users vary enormously. Any demand changes which might result from changes to the level of contribution that service users are asked to make would have an impact on the overall level of income that the County Council might expect. However, they do illustrate the effect of changing two key elements of the charging policy - the charge rate and the upper limit - both on service users and the County Council's income from charges. Implementing a single rate and an across-the-board approach to the proportion of disposable income claimed for charges would remove the need for charge bands and would simplify the system overall, making it more comprehensible to service users and quicker (and, therefore, cheaper) to administer. Recommendations on the rate and upper limit will be made to the Cabinet, but the Social Care Policy Review Committee is asked to endorse these principles.
35. The impact of changing the way in which capital is treated is difficult to assess, given the very limited information available about service users' capital resources. The government's new guidance allows local authorities to ask service users with savings of more than the upper limit used in the calculation of charges for residential care to meet the full cost of their care. It also allows the calculation of a tariff (ie assumed) income from savings and investments to be used instead of the actual income. The value of the main residence occupied by the service user should not be taken into account.
36. There would be little advantage in moving to a tariff income. There would also be little to be gained from requiring all service users with £19,000 or more of savings and investments to meet the full cost of their services. The income accruing from this capital would, in any case, be taken into account in a financial assessment and both taking account of savings and the interest on them would not be allowable. From the experience of operating a similar scheme in relation to residential care, it is clear that the majority of full-cost payers are in that position because of the property they own and live in and this could not be taken into account. The capital resources of people at or just over the threshold, once paying for the full cost of their care, would be rapidly depleted, requiring early review of their financial circumstances. For example, a person receiving 6 hours of domiciliary care a week would pay over £3,000 a year in charges, so that someone with £20,000 in savings and investments would fall below the threshold in four months. In view of the small numbers of people involved, the additional costs of reviewing capital levels, and the views expressed by service users in the consultation, it is recommended that there should be no change to the current way in which savings and investments are treated.
37. Taking account of the various changes outlined in this section, the future number of service users being asked to make a contribution towards the cost of their services would fall dramatically. At present, all service users in band 1 (1,100 people) receive free services. In future, they would probably be joined by 4,300 service users in bands 2, 3 and 4. This amounts to 78% of all users of chargeable non-residential services. This would leave around 1,500 service users who would be asked to make a contribution.
Option 2: charging for learning disability and mental health day services
38. Neither of these services is charged for currently. However, the March 2002 report to the Social Care Policy Review Committee commented that 'a growing emphasis on equity between client groups, reinforced by the new guidance, means that this policy position is no longer tenable' (paragraph 7.1). Some investigative work, and consultation with the carers of learning disability day services users, has since followed. The decision to focus on learning disability day services was made because the potential income to be gained from charging was judged to be much greater than from mental health day services since the numbers of service users were greater and a substantial proportion of mental health service users would be receiving services under section 117 of the Mental Health Act and therefore exempt from charges.
39. The fact-finding work had two dimensions - identifying the receipt of disability benefits and identifying disability-related expenses. Carers of service users in three learning disability day services were consulted and Mencap provided helpful information.
40. All service users were found to be in receipt of income support and most in receipt of disability living allowance (DLA}. The information supplied by Mencap and the carers was that the majority of DLA recipients (between 55% and 76%) received it at the middle rate. Few received the higher rate. Typically, therefore, a learning disability day services user would have an income of £88.20 a week (personal allowance, disability premium and enhanced disability premium) plus £37.65 DLA, totalling £125.85. The new guidance expects a basic allowance of 25% above the personal allowance plus disability premium rate to be made, totalling £110.25 weekly. This would leave a maximum of £15.60 a week, from which any special expenses associated with disability would be deducted, to meet charges. Should the decision be made to limit the amount of disposable income which could be claimed in charges to 50% or 75%, the amount available for charges would reduce commensurately.
41. Special expenses associated with disability are, under the current policy, particularly relevant to service users with problems associated with age, infirmity and physical disability. While many learning disability service users do have special expenses which already appear in the list (extra laundry and heating costs, for example, and some are wheelchair users), there are some expenses associated with behavioural aspects of learning disability which do not. Breakages of furniture, crockery and equipment is a good example of this which has been mentioned many times. In addition, items such as house maintenance (which would be allowable under the current policy where service users live alone and have to buy-in such assistance) are borne by the carer in situations where the learning disability service user lives in the family home.
42. Carers, typically, found it difficult to quantify these cost. However, where it was possible, it was clear that the costs normally exceeded the residual income of £15.60 given above. Over twice as many carers reported costs in excess of £15.60 as those whose costs were lower. The average cost, including one extremely high case, was £48.70 while excluding this case brought the overall average down to £29.10. In the majority of cases, then, it is unlikely that there would be disposable income available to meet charges.
43. Nonetheless, there is likely to be a minority, possibly a third, of service users where some disposable income could remain after account is taken of disability-related expenses. If, as might be likely, around £8 of weekly disposable income remained on average, this would produce an income from charges of around £110,000 a year, assuming that a decision was made to take 100% of disposable income in charges or £55,000 if a 50% of disposable income upper limit was implemented. However, the cost of carrying out financial assessments and income collection would have to be set against this sum, perhaps amounting to around £50,000 a year. This recognises that all service users would have to be financially assessed in order to isolate those who would actually be asked to make a financial contribution towards the cost of their services.
44. It is clear that the amount of income to be gained from introducing charges for learning disability day service attendance is small. However, the equity (and Disability Discrimination Act) argument is that if one group of disabled service users are charged for day care then all should be. Alternatively, none should be charged. Clearly, ceasing charging for day services for people with physical disabilities and older people would reduce the County Council's income. It is estimated that this sum would be around £35,000. The reasons for this low figure are two-fold: many older people receiving day care do not receive attendance allowance and therefore are in band 1 and not asked to pay a charge; also many day service attenders also receive domiciliary services, the charge for which in many cases takes the overall charge to the upper limit, making day service attendance, in effect, free.
45. Administration savings for the County Council, and for day care providers, could flow from a decision to end charges for day service attendance. These remain to be quantified. It is recommended that a review is made of the costs of administering the charging policy for non-residential services once the various changes forced by the government's new mandatory guidance have been implemented. Such a review could also encompass the impact of the new Financial Assessments and Benefits team who, in future, will be carrying out financial assessments and helping service users maximise their income from state welfare benefits.
46. The decision to extend charges to learning disability and mental health day services, therefore, is a finely balanced one. In view of the potential hazards to day service attendance that might result from bringing in charges, the recommendation is to cease charging for day care/services for all adult client groups. It is expected that this will mean that around 2,000 older people and people with physical disabilities who currently make a financial contribution towards the cost of their day care/services would not be asked to do so in the future.
Direct payments
47. Scheme A direct payments recipients are charged currently on a flat-rate basis ie everyone pays the same amount regardless of their financial circumstances. This charge is deducted at source with the result that many direct payments recipients are unaware that they are making a contribution towards the cost of the payments they receive. Scheme B is arranged differently in that all direct payments recipients in this scheme receive a financial assessment and receive payments based on their financial circumstances.
48. The government's new charging guidance contains a section on direct payments:
81. In considering whether, and if so how, to ask an individual to make a financial contribution to the cost of their care package, councils should treat people receiving direct payments as they would have treated them under the council's charging policy, if those people were receiving the equivalent services. Charges should be assessed and made in all respects in accordance with this guidance.
49. The guidance also states that flat-rate charges 'are acceptable only in limited circumstances' (p3) and gives the example of charging for meals on a flat-rate basis as justifiable 'as such charges substitute for ordinary living costs' (paragraph 9). The guidance warns against flat rate charges 'reducing users' incomes below basic levels of Income Support, plus a buffer of 25%' (paragraph 13)4 and goes on to state that 'flat rate charges applied to all users without any exemptions at all are not acceptable' (paragraph 13)
50. The County Council's charging policy, as it relates to direct payments scheme A, therefore, does not conform to the government's new guidance. Charges for direct payments are not levied on the same basis as charges for services (or scheme B) and are inherently unfair in the terms of the government's new guidance because they have no regard to ability to pay. The advice from the County Council's Legal Practice is that the charging policy for direct payments must be brought into line with the government's guidance. This advice reflects Counsel's opinion, given to the County Council in 1997 when the question of charging for direct payments was first raised as a result of the implementation of the Community Care (Direct Payments) Act 1996. When asked to advise on delaying charging for direct payments as the guidance/regulations had not been issued in time to allow for proper consultation, Counsel concluded that reasonable delay would be acceptable but pointed out that 'Hampshire County Council must, nonetheless, work expeditiously towards a charging policy which treats recipients of direct payments on an equal footing with those who receive substantial services'.
51. The most common views of scheme A direct payments recipients, as expressed (often in very emotive terms) in the section of the consultation questionnaire where respondents are invited to give their views on charging, were:
· strong disagreement with the principle of charging;
· equally strong disagreement with 'means-testing';
· dispute that direct payments is equivalent to services arranged by the County Council;
· fear that changes to the charging policy would result in direct payments recipients being worse off than before.
In addition, many comment were received about the detailed operation of the scheme as it now is and as it might be in the future.
52. The Committee will, no doubt, wish to consider in-principle objections to the government's mandatory guidance. However, it remains the case that, however sympathetic the Committee might be to the views of direct payments recipients on charging and means-testing, a decision not to charge for direct payments would inevitably lead to removing charges for users of currently chargeable non-residential services (at a cost of £4m a year) and a decision not to introduce charges relating to direct payments recipients' financial circumstances would be contrary to the mandatory guidance issued by the Government.
53. The way in which charges related to direct payments recipients' financial circumstances would have to work would be as follows. Assessable (net) income from pensions, benefits and interest on savings and investments would be established. Any earnings would be disregarded. From this would be deducted: the appropriate level of personal allowances and premia +25%; any housing costs not covered by housing benefit; Council Tax payments; disability-related expenses. What, if any, assessable income remains would be treated as disposable income and subject to charges. The direct payments recipient would then contribute towards the cost of their payments up to the limit of their disposable income, or the agreed maximum percentage of it.
54. It is probable that some direct payments recipients would have no disposable income and, as a result, there would be no charge to pay. On the assumption that the income profile of Direct Payments Scheme A recipients is similar to that of disabled service users under retirement age, it is estimated that around 379 (88%) of the 419 direct payments recipients would be in this situation.
55. Recognising that all direct payments users, under the present policy, are charged, the implication of this is that the hourly rate will need to rise so that the County Council meets the full cost of payments to direct payments recipients with no disposable income. Establishing the full-cost rate is not straightforward since the cost of direct payments recipients employing personal assistants varies, just as the cost to the County Council of providing services varies according to time of day, day of the week and geographically. Work to establish an appropriate rate will be necessary and a recommendation will be included in the report to Cabinet.
Implementation
56. Plans have already been developed for implementing changes to the charging policy, whatever decisions are finally made by Cabinet. The key task will be reassessing the financial circumstances of existing service users, in line with the new rules. The new Financial Assessments and Benefits team, recently appointed to, will be carrying out this initial work. However, it is wholly unrealistic to expect that this work can be completed by the government's target date of 1 October 2002. Reassessment of the priority groups could be completed by 1 January 2003 and it is recommended that this is agreed as the implementation date for a new charging policy.
Recommendations
That the Committee advises the Cabinet to agree to:
1. adopt a single hourly rate for domiciliary and sitting services, with the weekly charge having regard to the financial circumstances of service users;
2. introduce an across-the-board approach to the proportion of disposable income claimed for charges;
3. cease charging for day care/services for all adult client groups;
4. commission a review of the costs of administering the charging policy for non-residential services once the various changes forced by the government's new mandatory guidance have been implemented;
5. introduce charges for direct payments based on the assessment of ability to pay, in line with the charging policy for other non-residential services;
6. increase the hourly rate for direct payments users so that the County Council bears the full cost in cases where recipients are assessed to have no disposable income
7. implement the new policy on charges for non-residential services with effect from 1 January 2003.
Appendix 1
Examples of the application of the new government guidance to existing service users
Older People |
|||||||||||||
1.Basic Income Support and Savings of £5,000 |
|
|
2. Basic Income Support + Attendance Allowance + Savings |
| |||||||||
|
|
|
|
|
|
|
of £10,000 and DRE of £25 per week |
|
|
| |||
|
|
|
|
£ |
£ |
|
|
£ |
£ |
| |||
Income |
|
Income |
| ||||||||||
Income Support Personal Allowance |
53.95 |
|
Income Support Personal Allowance |
37.95 |
| ||||||||
Income Support Pensioner Premium |
44.20 |
|
Income Support Pensioner Premium |
44.20 |
| ||||||||
|
98.15 |
|
Severe Disability Premium |
42.25 |
| ||||||||
|
|
Attendance Allowance |
37.65 |
| |||||||||
|
|
|
162.05 |
| |||||||||
|
|
|
| ||||||||||
Allowances |
|
Allowances |
| ||||||||||
Basic Income Support |
98.15 |
|
Basic Income Support |
98.15 |
| ||||||||
+25% |
24.54 |
122.69 |
|
+25% |
24.54 |
122.69 |
| ||||||
|
|
|
| ||||||||||
Disability Expenses |
0.00 |
|
Disability Expenses |
25.00 |
| ||||||||
Housing Costs |
0.00 |
0.00 |
|
Housing Costs |
18.00 |
43.00 |
| ||||||
|
|
|
| ||||||||||
Disposable Income |
(24.54) |
|
Disposable Income |
(3.64) |
| ||||||||
|
|
|
| ||||||||||
Charge |
Nil |
|
Charge |
Nil |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3. Retirement pension £75.50 + occupational pension £100 + savings |
4. Retirement pension £75.50 + occupational pension £125 + savings | ||||||||||||
of £20,000 + attendance allowance with DRE of £30 per week and |
|
of £30,000 + attendance allowance with DRE of £30 per week and |
| ||||||||||
housing costs of £30 |
|
housing costs of £30 |
| ||||||||||
|
|
|
|
|
|
|
|
| |||||
|
|
|
|
£ |
£ |
|
|
|
|
|
£ |
£ |
|
Income |
Income |
| |||||||||||
Retirement pension |
75.50 |
Retirement pension |
75.50 |
| |||||||||
Occupational Pension |
100.00 |
Occupational Pension |
125.00 |
| |||||||||
Attendance allowance |
37.65 |
Attendance allowance |
37.65 |
| |||||||||
Capital Tariff |
27.20 |
Capital Tariff |
67.20 |
| |||||||||
|
240.35 |
|
305.35 |
| |||||||||
|
|
| |||||||||||
Allowances |
Allowances |
| |||||||||||
Basic Income Support |
98.15 |
Basic Income Support |
98.15 |
| |||||||||
+25% |
24.54 |
122.69 |
+25% |
24.54 |
122.69 |
| |||||||
|
|
| |||||||||||
Disability Expenses |
30.00 |
Disability Expenses |
30.00 |
| |||||||||
Housing Costs |
30.00 |
60.00 |
Housing Costs |
30.00 |
60.00 |
| |||||||
|
|
| |||||||||||
Disposable Income |
57.66 |
Disposable Income |
122.66 |
| |||||||||
|
|
| |||||||||||
Charge dependent on amount of care |
Charge depends on amount of care |
| |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adults |
|||||||||||||
1.Basic Income Support and Savings of £2,000 |
|
|
2. Basic Income Support + Disability Living Allowance + savings of £8,000 | ||||||||||
|
|
|
|
|
|
|
and disability related expenditure of £25 per week |
|
| ||||
|
|
|
|
£ |
£ |
|
|
£ |
£ |
| |||
Income |
|
Income |
| ||||||||||
Income Support Personal Allowance |
53.95 |
|
Income Support Personal Allowance |
53.95 |
| ||||||||
Income Support Disability Premium |
23.00 |
|
Income Support Disability Premium |
23.00 |
| ||||||||
|
76.95 |
|
Severe Disability Premium |
42.25 |
| ||||||||
|
|
Disability Living Allowance |
37.65 |
| |||||||||
|
|
|
156.85 |
| |||||||||
|
|
|
| ||||||||||
Allowances |
|
Allowances |
| ||||||||||
Basic Income Support |
76.95 |
|
Basic Income Support |
76.95 |
| ||||||||
+25% |
19.24 |
96.19 |
|
+25% |
19.24 |
96.19 |
| ||||||
|
|
|
| ||||||||||
Disability Expenses |
0.00 |
|
Disability Expenses |
25.00 |
| ||||||||
Housing Costs |
0.00 |
0.00 |
|
Housing Costs |
0.00 |
25.00 |
| ||||||
|
|
|
| ||||||||||
Disposable Income |
(19.24) |
|
Disposable Income |
35.66 |
| ||||||||
|
|
|
| ||||||||||
No Charge |
|
Charge depends on amount of care |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3. Incapacity benefit £85.85 + occupational pension £80 + savings |
4. Earnings of £250 + savings of £30,000 + disability living allowance | ||||||||||||
of £20,000 + Disability Living allowance with DRE of £30 per week and |
with DRE of £30 per week and housing costs of £30 |
| |||||||||||
housing costs of £30 |
|
|
| ||||||||||
|
|
|
|
|
|
|
|
| |||||
|
|
|
|
£ |
£ |
|
|
|
|
|
£ |
£ |
|
Income |
Income |
| |||||||||||
Incapacity Benefit |
85.85 |
Earnings - all disregarded |
0.00 |
| |||||||||
Occupational Pension |
80.00 |
DLA |
37.65 |
| |||||||||
Disability Living Allowance |
37.65 |
Capital Tariff |
72.00 |
| |||||||||
Capital Tariff |
32.00 |
|
|
| |||||||||
|
235.50 |
|
109.65 |
| |||||||||
|
|
| |||||||||||
Allowances |
Allowances |
| |||||||||||
Basic Income Support |
76.95 |
Basic Income Support |
76.95 |
| |||||||||
+25% |
19.24 |
96.19 |
+25% |
19.24 |
96.19 |
| |||||||
|
|
| |||||||||||
Disability Expenses |
30.00 |
Disability Expenses |
30.00 |
| |||||||||
Housing Costs |
30.00 |
60.00 |
Housing Costs |
30.00 |
60.00 |
| |||||||
|
|
| |||||||||||
Disposable Income |
79.31 |
Disposable Income |
(46.54) |
| |||||||||
|
|
| |||||||||||
Charge dependent on amount of care |
No Charge |
| |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Section 100 D - Local Government Act 1972 - background papers
The following documents disclose facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of this report.
NB the list excludes:
1. Published works.
2. Documents which disclose exempt or confidential information as defined in the Act.
Fairer Charging Policies for Home Care and Other Non-Residential Services. Report of the County Treasurer and Director of Social Services to Hampshire County Council Social Care Policy Review Committee. 22 March 2002.
Fairer Charging Policies for Home Care and Other non-residential Social Services - Guidance for Councils with Social Services Responsibilities. Department of Health Local Authority Circular LAC(2001)32.