Contact: Gordon Shinn, ext 7526

1 Summary

1.1 The following decisions are sought:

1.1.1 That the Executive Member approves the form of agreement for Deferred Payments Scheme as set out in Appendix 1.

2 Reason(s)

2.1 The authority of the Executive Member is required for the new legal document.

3 Other options considered and rejected

3.1 Not applicable

4 Conflicts of Interest declared by the decision-maker or a member for officer consulted

4.1 Not applicable

5 Dispensation granted by the Standards Committee

5.1 Not applicable

6 Reason(s) for the matter being dealt with if urgent

6.1 Not applicable

Approved by: Date of decision:

Cllr Felicity Hindson

Contact: Gordon Shinn, Ext: 7526

1 Summary

1.1 Recent legislation introduced a scheme of deferred payments for residents with property that is taken into account by the means-test for residential accommodation, who do not wish to sell their homes, or can not do so, in order to meet their care costs. This came into effect on 1 October 2001.

1.2 Although the County Council already had a scheme in place for `interim funding' of clients, a new format of agreement had to be drawn up to comply with the new legislation and to enable receipt of government grant. This new document requires the approval of the Executive Member for Social Care to enable Authorised signatories to sign each Agreement on behalf of the County Council.

2 Background

2.1 Section 53 of the Health and Social Care Act 2001 paved the way for the introduction of deferred payments by councils with social services responsibilities. This means that where a person enters residential care and has a property in which he has a beneficial interest and formerly occupied as his main or only home and the council agrees to enter into a deferred payments agreement, then the council has to disregard the value of the property when deciding whether or not that person needs care and attention which is not otherwise available.

2.2 This means that clients can pay their contributions net of that element related to their property. Therefore, people with property, but without income and other assets sufficient to meet their full assessed contribution, will have a legal charge placed on their property to meet any shortfall. Consequently people will be able to keep their homes on admission to residential care and for the duration of the deferred payments agreement.

2.3 The County Council already operated a scheme that allowed clients to defer contributions in respect of their main home. This operated under the Health and Social Services and Social Security Adjudication (HASSASSA) Act 1983, whereby the council took out a legal charge on the client's property where they were unable or unwilling to sell their property. These clients were deemed to be `interim funded'.

3 Eligibility

3.1 Details are set out in Local Authority Circular LAC (2001) 25. There are various rules around eligibility for the scheme, including that the client:

· must be entering permanent residential care

· must have insufficient income and other assets to meet their care costs other than the value of their home

· do not wish to sell their homes or are unable to sell their home quickly enough to pay for their care home fees

3.2 Councils retain discretion over whether or not to agree to deferred payments in individual cases. Published information must demonstrate how the scheme works.

3.3 The statutory provisions for deferred payments came into force on 1 October 2001 and councils were encouraged to prepare for operation from that date (although the circular was not published until October 2001). Where deferred payments are agreed for residents who entered permanent care before 1 October, they should not be backdated to a date before 1 October.

4 The Agreement

4.1 A copy of the agreement is attached as Appendix 1. A copy of the information that has been supplied to existing interim-funded clients is also attached (Appendix 2).

5 Government Grant

5.1 In order to encourage councils to take up the deferred payments scheme, the government introduced a new grant in 2001/02. The County Council's grant for 2001/02 was £0.4m and this increases to £0.8m in 2002/03. The grant is for that element of the clients' contributions that is deferred.

5.2 Unfortunately, one of the conditions of this grant is that there must be an agreement in place between the client and the council. This must be signed by both parties and the grant can only be claimed from the date of signature by the client.

5.3 In order for the agreement to be effective all the relevant information needs to be collected e.g. house valuation. This could often mean that a client is receiving residential care and paying a reduced contribution although not formally under the deferred payments scheme.

5.4 The Department of Health has to date been inflexible in agreeing any form of ` back dating' of claims and this has resulted in the likelihood that none of the 2001/02 grant will be received. Officers are looking at ways in which this problem can be managed in the future.

Recommendations

1. That the Executive Member approves the Deferred Payments Scheme as set out in Appendix 1.

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.

None

Appendix 1

This Agreement between HAMPSHIRE COUNTY COUNCIL of The Castle Winchester Hampshire SO23 8UJ ("the Council") and

("the Resident") is made pursuant to Section 55 of the Health and Social Care Act 2001 ("the Deferred Payments Scheme")

1. The Council agrees as follows:-

1.1 To pay the difference between the amount that the Resident has been

assessed as being liable to pay for his/her residential accommodation and the amount that the Resident would have been assessed to pay if the Property known as ("the Property") had been included in such assessment together with any additional payments ("top-up") necessary to meet the full fees of the residential accommodation from the day of

("the Deferred Payment")

1.2 To write to the Resident or the Resident's nominated representative

following completion of this Agreement informing him/her of the current weekly amount of the Deferred Payment

1.3 To reassess the weekly Deferred Payment at annual intervals and inform the

Resident of the reassessed amount and the total amount owed by the Resident at that time

1.4 That the Resident or his/her Estate is exempt from repaying the Deferred Payment ("the Exempt Period")

(a) during the lifetime of the Resident and up to 56 days after the

death of the Resident or

(b) until an earlier date specified by the Resident in a written notice

given to the Council as referred to in Clause 3 of this Agreement

1.5 Not to charge interest on the Deferred Payment at any time on or before the date on which the Exempt Period ends

1.6. To charge interest on the Deferred Payment at an annual rate equivalent to the County Court Judgment Rate from time to time in force from the day after the date that the Exempt Period ends This interest shall be capitalised each year which means that if the Deferred Payment has not been paid for the first year after it becomes due the interest that has accrued will be added to the Deferred Payment and interest will then be charged on the total sum and this capitalisation will be repeated each year until such time as the debt is repaid

2. The Resident agrees as follows:-

2.1 That he/she or his/her Estate shall pay the full amount of the Deferred

Payment immediately following the end of the Exempt Period

2.2 To enter into a Legal Charge ("Legal Charge") pursuant to Section 55 of the Health and Social Care Act 2001 to protect the Council's ability to reclaim the Deferred Payment

2.3 To reimburse the Council's legal costs in the sum of £250

2.4 That the Council has advised the Resident to obtain independent legal

and financial advice before signing this Agreement

2.5 That the Council has advised the Resident that entitlement to income

support and minimum income guarantee is not likely to be payable if the Property is not being sold but that Attendance Allowance/Disability Living Allowance may be payable and should be claimed

2.6 That until the full amount of the Deferred Payment is repaid to the

Council the Resident or his/her Estate shall:-

(a) maintain the Property in good condition

(b) insure the Property and to keep it insured to its full reinstatement value against all rates normally covered by a comprehensive policy for a residential property and shall have the Council's interest noted on the Resident's insurance policy

(c) notify the Council if the Resident or his/her Estates allows any

person or persons to live at the Property

3. The Council and the Resident both agree that this Agreement and the Legal Charge may be ended by written notice given by the Resident to the Council on payment of the full amount that he/she is liable to pay under this Agreement

Signed ............................................. (the Resident)

Date .............................................

Or I hold Registered/Ordinary Power of Attorney*

I am the Receiver appointed by Order of the Court or Protection*

(*please delete as appropriate)

Signed .............................................. (for and on behalf of the Resident)

Name: ............................................. (please print)

Address: .........................................................................................

.........................................................................................

.........................................................................................

Date .............................................

Signed ............................................. (for and on behalf of the Council)

Name: ............................................. (please print)

Position: .........................................................................................

Date .............................................