In January 2002 the Department of Health (DH) issued new mandatory guidance on charges for non-residential services: `Fairer Charging Policies for Home Care and other non-residential Social Services'. This was in order to reduce the level of variation between local authorities. In response, HCC implemented changes to the Non-Residential charging (NRC) policy from 1 October 2002. Since October 2002 when fairer charging was introduced, a national study has been undertaken on behalf of Age Concern by the Institute of Gerontology at Kings' College London. They produced, in April 2004, a report `Fair Enough?'; a research document on the implementation of the DH Guidance on Fairer Charging policies for home care and other non-residential social services. For the main findings of this report and comparison with Hampshire's current charging policy see Appendix A. Based upon an overall comparison with other Local Authorities Hampshire can be seen both as complying with government guidance and as a relatively low-charging Council for non-residential care services. During 2004 initial work was undertaken to identify areas where Hampshire's charging policy could be updated to provide greater consistency with other local authorities. This report updates the initial work reviewing Hampshire's current NRC charging policy and includes the charging for Hostels policy for Adults to be calculated under Charging for Residential Accommodation Guidance (CRAG). This report highlights the areas where the charging policy could be improved in terms of consistency with the majority of local authorities and also improvements in equity within the HCC policy. It provides estimates where possible of the financial impact of these to the authority, also anticipated risks associated with these if adopted and a recommendation of a way forward.
Background
Hampshire's Current NRC PolicyHampshire currently has a flat hourly rate of £11.36 per hour, and users of Home Care services (including sitting services) are charged on the basis of the amount of service they receive and their ability to pay. A user's ability to pay is based on a financial assessment of their disposable income after usual living and disability related expenses have been taken into account. The Council then creates a maximum charge based on 75% of the assessed disposable income and the user is charged for the level of service they receive, up to this limit. The Council does not charge for any assessment of £3.00 and less per week as it is uneconomical to recover such small amounts. Support worker services and social and emotional support services are not chargeable. Day care service charges were ceased to all client groups after the last consultation on the implementation of the `fairer charging' policy. Previously only day services for adults with a learning disability were non-chargeable. Users who have opted to receive a Direct Payment under Option A are not financially assessed, users opting for Option B are financially assessed. The NRC charge of £11.36 per hour in 2005/06 compared to the simple average hourly cost of care across the County of £12.92 indicates that on average the County is subsidising service users by £1.56 per hour of care even if they are assessed as full cost. Undertaking Financial Assessments Hampshire is in the majority of Councils in using a specialist financial assessments and benefits service. Service user feedback has been excellent but, owing to an ever-increasing volume of referrals, there have been some delays and this has led in some cases to income being written off. `Fairer Charging' guidance stipulates that, unless a financial assessment has been delayed or obstructed by the service user, Councils are not permitted to levy a charge before advising the service user of the level of charge. It is therefore imperative that the financial assessment process is completed as quickly as possible. Care is often arranged at short notice and in such cases, for new clients there will be a gap between the start of the care and the date at which the client can be notified of their charge. Recognising an inevitable delay in undertaking financial assessments, consideration should be given to making it policy for new users to receive the first four weeks free prior to notification of a charge. This will mean users are notified and charged from a similar point from the start of their care. The first full year cost of the Financial Assessment and Benefits (FAB) team in 2004/05 which operates for both Residential & NRC charging, was £1.27m. The projected cost for 05/06 is £1.51m which includes £105k for the newly centralised NRC assessment team. Approximately 43% of FAB time is spent on NRC and 21% in follow up visits to assist in applying for benefits. An apportionment of expenditure indicates that the collection of financial information for NRC assessment cost £546,000 in 04/05 and is projected as £649,000 for 05/06. Income Achievement When the current policy was introduced, it was estimated that income would reduce by £1m and the final accounts for 2003/2004 show actual income had reduced by this amount. Actual spend was £43m giving a recovery of charges against costs of 7.2%. In 2004/05 charges for domiciliary services raised £3.8m, against an expenditure of £55.1m, which is only 6.9% recovery of charges against the increasing costs of care. The direct NRC assessment cost (above) was 14% of charges indicating that even with other overheads not analysed here the cost of collection is more than covered by the charges. Current statistics on NRC clients and charges are included in Appendix B. Proposals from findings on consistency and equity for charging Adults & Older PeopleTaking Account of a Client's Capital in the Financial Assessment Hampshire is the only Council (out of the 150 participating in the Kings' College London survey) that does not take a user's capital into account when calculating a charge. Department of Health (DH) guidance states that Councils can take capital into account but that their methodology must not be less generous than that set out in the guidance on "Charging for Residential Accommodation" (CRAG). Hampshire's current policy on capital was introduced following consultation with service users. The application of the policy has led to some unintended results and inequities. These include the treatment of disability-related expenses which means that clients with capital who can afford to finance large purchases or adaptations are treated as if they cannot. The current policy also holds other implications. Under CRAG rules on deprivation of assets, clients who give away their assets shortly after their financial assessment are assessed as if they still had them. With the current non-residential charging policy there is no such provision. Clients assessed as needing non-residential care might therefore take the opportunity of dispersing their assets, anticipating that they might need residential care later on in their lives. Financial Impact This proposal would change the structure of charges, as interest currently taken into account would be replaced by tariff income on the capital. If using the current CRAG rules, when a user has capital of less than £20,500 and more than £12,500, ability to pay is assessed by taking into account as weekly income £1.00 for every £250 or part of £250 over the £12,500. Users with capital over £20,500 would be charged full cost for the level of service they receive at the standard hourly rate set. Users with capital under £12,500 would only be assessed on their disposable income. The change to income achievement from this change is difficult to estimate. Broadly, there are at least 600 users who have potentially more than £20,500 capital. Details on how much would be assessable income would be subject to collecting more specific information about individual's capital for a revised financial assessment. If this proposal was to be implemented there would be little or no IT systems costs for this change. There would be process costs from reviewing all service users to collect information on their assessable capital and acknowledgement will need to be given to the time and cost arising from the additional complexity of ongoing assessments. Other considerations would be training and accommodation costs of an increase to the FAB team. Risks If capital is taken into account for NRC assessments, those users who progress to residential or nursing care who were cash rich and asset poor may have already used up their available resources on NRC charges and this may reduce residential or nursing care income. This risk is offset by the policy of maintaining people in their home as far and for as long, as possible. Currently income achievement on residential and nursing care is much higher relative to expenditure, so maintaining people in their own homes could be considered as a more expensive option. Taking capital into account for NRC will bring forward some income opportunities. Assessing Charge based on 100% of a Service User's Disposable Income Hampshire is in a minority of six Councils (out of the 150 participating in the Kings' College London survey) that does not take 100% of a service user's disposable income into consideration when assessing their charge. Arguments for taking all 100% include the fact that Councils are already required to allow a buffer of 25% above income support rates in respect of general living expenses and therefore there is no need to provide an additional buffer. Financial Impact The financial impact of this proposal is difficult to predict with certainty. Currently there are 2309 users who are already being charged their upper limit which would increase as a result of taking account of 100% of disposable income. The estimated effect on user's charges is detailed in Appendix C. A charge at 100% of disposable income could generate somewhere between £222,000 and £537,000. The other group of users who may be affected are those who pay nothing towards their care, currently 3711 which is 52% of clients with an assessment. The Council does not have data to indicate what proportion of these clients may be charged that can be analysed. Risks There are two considerations that argue against such a policy. The first is that users would have no incentive to claim additional benefits since these could be totally consumed by increased charges. The second is that, in the absence of a maximum weekly charge, all users' income levels could potentially be reduced to income support levels plus 25%. Although this complies with the safety net enshrined in the DH guidance, it could be construed as penalising users who have saved towards their retirement to the extent of reducing them to the level of others who have made no such provision.
Increase Charges to Reflect the Full Cost of Care
As already indicated the average cost of purchased care is approximately £12.92 per hour and the Department's current charge per hour is £11.36. The current rate is effectively providing a further benefit for users over and above the their assessed disposable income. Increasing the charge to reflect the full cost of care would only affect those users not currently paying their assessed upper limit or full cost clients. Financial Impact An increase of £1.56 (13.73%) would only affect those users who are not currently paying to their upper limit or are being charged full cost. Assuming that the increase of 13.73% can be applied to all users not currently at their upper limit this would realise a maximum of approximately £118,000 pa, or, if increased to £13.00 per hour £124,000. For more details see Appendix D. In combination with taking account of capital and increasing assessment to take account of 100% of disposable income this would further compound the effect on some users' charges. There will be little cost in updating the cost of care in terms of process and systems. Risks This option would lead to the cross subsidy of care across the County by users. Further increases above the rate of inflation will be unpopular with users particularly people on benefits with restricted scope for maximising their own income further. Direct Payments Hampshire still operates two direct payment options for users to choose from: the financially assessed Option B and un-assessed Option A. Under Option A service users can opt not to have a financial assessment and they currently receive a net payment of £8.17 (£9.28 gross rate and £1.11 standard income) for each hour of care they are assessed as needing. This differs from Option B where the user is paid the market rate for the care needed but is then financially assessed to determine how much they should contribute. Any other changes to non-residential charging would be applied to Option B but would not affect Option A if it is continued. `Fairer Charging' guidance stipulates that all users should have a financial assessment and that ability to pay should not be assessed and charges should not be levied for any one service in isolation. The retention of Option A could be seen to be in direct contravention of the guidance and may not be legally sustainable. Option A presents a loophole for service users with considerable financial means to avoid making anything other than a token contribution to the cost of their care. Following the publication of the Government's Green paper Independence Well-being and Choice, and the emphasis on Performance Assessment Framework indicators, the Department is expected to further increase the number of Direct Payment users. The effect of this will need to be presented as part of other developments and is not a part of this report.
Financial Impact
The gross cost of care on option A is £9.28, however analysis shows that the average cost of care for those users on option B is around £13.18. This appears to be reasonably consistent with the hourly rates being charged around the county which average at £12.92. Whilst users on option A, if financially assessed may contribute more to the cost of their care, it is possible that the gross cost of the care may move toward that paid to option B users. Risks This proposal in 2002, to withdraw Option A, was met with great hostility from the direct payments lobby. Although following a recent review of a similar scheme in Southampton, despite objection, it has now been replaced. The risk of legal challenge is small from direct payment users because most would not consider it in their interests to complain about the terms of Option A. The Council does however, have to take a view as to whether it is prepared to continue to offer a potentially ultra vires option. Charging for Day Care and other similar or equivalent services Hampshire has not charged for day care since the implementation of the current policy. Previously the Department did not charge people with a Learning Disability but was required to make a change to either charge all or none of the service users for their day care. At the time the income loss from ceasing to charge for day care was not significant. Whilst this change proved equitable between client groups receiving day care, it does not promote equity in the charging policy between the different services that people may be assessed as requiring. Although previously the income loss from ending day care charges was not considered significant, in light of the currently proposed changes the inclusion of day care in non-residential charges should now be reconsidered. Application of Maximum Weekly Upper Limit for Charging The Fairer Charging guidance indicates that Councils should consider and specifically consult on the need to set a maximum charge. Unlike most Councils Hampshire does not have a maximum weekly limit for care charges. This has been logical since clients are already afforded a buffer through the income support plus 25% mechanism. Also the hourly rate charged is less than the cost of care to the Council. However, further consideration of this option may be pertinent if the policy is changed to take capital into account and/or to assess users on 100% of their disposable income. The majority of local authorities have set a maximum above which no-one will be charged. Maximum weekly upper limits where applied vary between £22 and £400, the majority being in the £200 to £299 range. Whether a maximum upper limit should form part of the charging policy will be reviewed following the outcome of user consultation. However, this could be used to limit the increase in charges to clients with a high assessed upper limit receiving very intensive care packages. The statistics provided in appendix B indicate that the highest weekly upper limit is set at £548.05 per week but the highest actual charge is £383.64. Income from Hostels Hampshire has had an alternative policy and procedure of charging for in-house respite services which results in a more generous assessment than would result from a CRAG assessment which is used for the rest of the residential services provided to Adults and Older People. The purpose of the consultation on this is in line with the desire for greater consistency in the charging policy for residential services alongside providing an opportunity for some income improvement. The only service that would be charged outside CRAG would be for stays at Orchard Close due to the specialised nature of these `holiday' placements. Financial Impact It has been estimated that for current clients assessments under CRAG would increase charges to users and improve income recovery by up to £100,000. However, there would be some additional cost of financially assessing these clients. Risks As with any increase in charges this may be unpopular though its implementation would result in consistency across all care groups and across in-house and purchased care. SummaryIt is difficult to provide a typical estimate of the effect on individual users because everyone has a personal financial assessment taking into account their own income, expenditure and disability-related expenses. The Council is committed to ensuring that people are not asked to pay more than they can afford in line with Government guidance on fairer charging, that users who have less than income support plus 25% assessed disposable income will not be charged. Below is a summary, where quantification is possible, of the full year effect of the proposed policy changes outlined in section 3 above. Report Client Group Description Estimate FYERef 3.1 Adults/OP Client Capital see report for details 3.2 Adults/OP Disposable income £222,000 - £537,000 3.3 Adults/OP Increase charges £118,000 - £124,000 3.4 Adults/OP Direct Payments withdraw option A 3.5 Adults/OP Charging for Day Care 3.6 Adults/OP Max upper limit cap effect of estimates
see report for details 3.7 Adults CRAG assessment up to £100,000 for Hostels income The total income from the proposals quantified above is in the range of £440,000 to £761,000 full year effect. Consultation about the ProposalsAims The aim of the consultation is to get feedback and comment from service users, user groups, Adult Services staff, and members of the public about the proposals for changes to the non-residential charging policy. The questions asked will focus on the fairness and equity of the proposals for both service users and the tax payer. The consultation will involve: · all users who are affected by the proposals · groups representing the interests of users (such as Age Concern, Mencap, SCIL, HCODP and HCIL) · Adult Services staff. It is proposed to also ask for the views of members of the public through the January Citizens' Panel, but details are not finalised yet. The user consultation will focus on contacting all users who are affected (and/or their agents or carers) individually so that they can give their own comments. Groups representing the interest of users will also be involved, but are not expected to take on a co-ordinating role, or to gather views from all users. The consultation will start in January and will allow twelve weeks for people to send comments back to the County Council. The service user consultation All users who are affected, and/or their agents, will get clear, relevant information about the proposals for changes to the charging policy (in the format they need). Everyone will get a feedback form for their comments (with a postage paid envelope). Alternative ways of giving feedback (email, phone, face-to-face) will be provided. There will be a phone number/email contact for user questions about the consultation/reassurance. Adult Services staff, the press office and County Councillors will be briefed in advance about the issues in the consultation, so that they can either answer questions or can route questions efficiently and effectively. The consultation will be carried out following guidelines in the County Council's One Compact, and the Cabinet Office's How to consult your users. Five strands to the consultation Because different groups of users would be affected differently by the proposed changes, and would need different background information there will be five parts to the user consultation exercise: 1 People currently using chargeable services (whether or not they pay) 2 People using Direct Payments scheme B 3 People using Direct Payments scheme A 4 People using in-house respite (hostel) services 5 People only using currently non-chargeable services (day care and equivalent services) People in the first four groups will be consulted on all aspects of the proposals, including on whether other services should become chargeable. People in group five would be asked subsequently for their comments on the services they use becoming chargeable. The background information provided for this strand of the consultation would include a summary of the charging policy that included any agreed changes. The consultation period would also be twelve weeks.
Content of the consultation All service users will get background information, a feedback form, and details for returning it or for getting further information. The feedback forms will focus on issues of fairness and equity, including asking users to offer suggestions for any additions for the disability related expenses (DREs) list in the financial assessment. Preparation There is a lot of background work to be done beforehand. Distribution lists must be accurate (for example, those people needing a simplified version or a copy in Braille are known, and that all details of deaths have been recorded on the system). Mechanisms for responding to questions and recording responses must be in place. Staff and Councillors need time to absorb the information about the proposals in order to be helpful to users. It is particularly important that front line workers such as home carers (including those working for other organisations) and care managers are well-informed.
Consultation timetable The consultation will start on 9 January, and will continue for twelve weeks. · 14 December onwards: information distributed to Adult Services staff and County Councillors. · 14 December onwards: information mailed to organisations representing the interests of service user groups potentially affected by the proposals. · 12 December-6 January: preparation of user information and packs (8,500), preparation of material for the Citizens' Panel. · 9 January (start of consultation): user information mail out starts. · 31 March: end of first consultation period. · March/April: analysis of results of consultation. · 28 April: decision day for results of this consultation on proposed changes; | 