Care fees history repeats – and self-funders bear the brunt…

When Labour’s Tony Blair reassured everyone in 1997 that no one should have to sell their home to pay for care, many people took heart. However, in the years that followed the betrayal in those words soon became apparent.

Now, in 2015, we have David Cameron’s Conservative betrayal in postponing the implementation of Phase 2 of the social care funding reforms – as set out in the Care Act. These are the reforms he campaigned on in the recent UK general election.

The stated unaffordability of the reforms are one thing. Having the courage – and frankly the decency – to abide by election promises or not to make them in the first place seem to be quite another, whatever the political party. So often, the people who bear the brunt are the most vulnerable.

Cap on social care fees postponed

Phase 2 of The Care Act made provision for a cap on social care fees of £72,000 and for a new upper means test threshold. Both of these measures were due to come into effect from April 2016. Both have now been postponed until at least 2020. Read more about the cap and the means test thresholds in this article.

(Note: these changes do not affect NHS Continuing Healthcare funding.)

Care home placements

Also postponed is the duty placed on local authorities to arrange care home placements for people who are self-funding. This is very disappointing, as local authorities are able to negotiate lower care fees for residents than a family can do. It means self-funders will continue to pay the highest fees and continue to subsidise local authorities.

Proper appeals process

Also postponed is the introduction of an appeals process within adult social care.

Deferred Payment Arrangements

The new Deferred Payment Arrangements (DPAs) remain in place. This is where the cost of care is offset against the value of a property, and those costs are subsequently recouped by the local authority at a later date. However, these new DPAs attract interest payments, whereas previously they didn’t. Since April this year people have been signing these new arrangements on the basis that care fees would be capped – and not only are they now paying interest but there is also now no guarantee of any such cap in fees.

Smoke and mirrors in health and social care funding

With all the conditions attached to the care fees ‘cap’, it was in practice going to benefit very few people. The new date of April 2020 for implementation adds insult to injury: 2020 is simply the point at which a person starts counting towards the cap; the intervening years between now and then don’t count at all. It means that many elderly people going into care now might as well forget a cap was ever even mentioned. In fact, we might as well forget there was going to be any meaningful financial reform at all in social care.

Despite the financial constraints within local authorities and the cost of implementing these social care reforms, what many people find particularly galling, is that the government must have known they were going to go back on their promises. Even so, they allowed these cash-strapped local authorities to continue to use precious budgets on training and preparing for Phase 2. When you also add in the historical cost of all the research into care funding reform previously carried out by the Dilnot Commission  back in 2011, one could be forgiven for concluding that the Care Act has so far been a colossal and obscene waste of money.

The Guardian reports that this latest u-turn has cost taxpayers up to £100m and that there are some serious questions for the government to answer.

In his letter to the chair of the Local Government Association dated 17/07/15,  Alistair Burt MP, Minister for Community and Social Care, explained that the decision to postpone Phase 2 of the Care Act had not been taken lightly. Presumably this means his party had been planning it for some time. The decision was quietly announced on a day when the House of Commons was not sitting and with no mention from Jeremy Hunt in any of his own previous comments.

Social care is on its knees. If the comment in Alistair Burt’s letter that the Care Act has “people needing care at its heart” is to be believed, the government will hopefully now do the right thing and stop short of cynically taking back back the money local authorities have received to implement the reforms. Local authorities are already at breaking point.

Alistair Burt’s letter also has a heavy focus on the development of the private insurance market, and states that it is not suitably developed at this point to allow the Care Act reforms to go ahead. That’s hardly breaking news – it’s been evident for some time. It suggests the Care Act was either underfunded from the start, and/or the government never intended to see all the measures through in the first place.

Indeed, the Community Care blog highlights how two councils challenged the Dept. of Health on the lack of adequate funding to implement the Care Act. Not wanting the case to expose the structure of underfunding, the Dept of Health settled out of court.

Away from social care and in the wider NHS it’s not hard to see which way things are going. Funding towards some vital services, including those involving the voluntary sector, seems to be ending as personal health budgets become more widespread and people are told to find their own care services.

Plans for Greater Manchester’s devolved health and social care spending powers have excluded the voluntary sector, something that has always been integral to a state-funded health and social care system.

Youssef El-Gingihy’s Huffington Post article, How To Dismantle The NHS, paints a grim picture for anyone who believes in the original values of the NHS. In the article, the GP pinpoints how the NHS is being privatised and turned into a private insurance model of healthcare.

If the cap on social care fees and the new means test threshold do finally come into effect from April 2020, this will be just five weeks before the next UK general election. Who knows what false promises will be made – and broken – then?

There are certain points about the Care Act and NHS Continuing Healthcare that you need to be aware of.

Elements of the new Care Act come into effect in England on 1st April 2015. The remainder was due to come into effect in 2016*. (*See update at the end of this article.)

This article is not a detailed overview of the Care Act. Instead, it raises just a few of the points that families may need to be aware of in the first instance. We’ll look at other points in future articles.

The most important point to be aware of about the Care Act and NHS Continuing Healthcare is that:

• the new Care Act does not change the rules about NHS Continuing Healthcare – or who it applies to.

The guidelines, Continuing Healthcare case law and eligibility criteria for NHS Continuing Healthcare remain the same.

(NHS Continuing Healthcare is NHS funding that covers all care fees for people in full time care who have healthcare and nursing care needs and who meet certain criteria.)

However, there are some points about the Care Act that it’s worth keeping in mind:

Social care vs. healthcare and nursing care

The Care Act is essentially a social care Act – applying for most part to local authority care, i.e. means tested care.

Generally speaking, there are two types of care:

1. social care: provided and funded by a local authority and means tested
2. healthcare and nursing care: provided by the NHS and not means tested.

This distinction is vital.

The Care Act deals primarily with social care, i.e. local authority means tested care.

Do not believe anyone who tells you any of the following:

• That the new Care Act abolishes NHS Continuing Healthcare funding. It does not.
• That all care will now be means tested, including NHS Continuing Healthcare. It is not. NHS Continuing Healthcare is not means tested.
• That the new Care Act does away with the above distinction between social care and healthcare funding. It does not.
• That people receiving NHS Continuing Healthcare now have to pay for their social care. They don’t.

Self-funders and the Care Act

If you don’t qualify for NHS Continuing Healthcare funding (or if you have Continuing Healthcare funding removed at some point) it means that your care needs are deemed to be social care needs. This means the Care Act becomes relevant to you at that point – because the Care Act is largely about social care.

‘Self-funders’ – the term used to describe people who pay for their own care – have had a pretty raw deal in the past. They’ve generally been invisible to the wider health and social care system and have been left to fend for themselves, paying the highest fees for care and having little – if any – access to advice or contact from the local authority.

With the Care Act, self-funders will at least now be on the radar of the local authority. The local authority must now calculate the cost of a person’s care – and keep a record of these calculations (a care account) – regardless of how much money a person has. This is because from April 2016* a new care fees ‘cap’ was due to come into effect. (*See the latest update on this at the end of this article.)

The ‘cap’ on care fees

Vital point:

The much publicised cap on care fees applies only to social care (means tested care).

It was due to start coming into effect from April 2016*. (*See the latest update on this at the end of this article.) The idea behind the cap is to limit the amount that any one individual over the age of 25 has to pay in total for their care to £72,000. In practice, however, few people (probably only one in eight people) will actually benefit because:

• the cap only covers actual care costs, not living costs or accommodation costs in a care home
• the average stay in a care home is between two and three years, many people will never reach the cap, but will instead have to pay for everything
• the cost of actual care is calculated only at the rate the local authority is prepared to pay; very often this does not cover the actual cost of care.

For example, a self-funder could be paying £800/week in care fees, and yet if the local authority rate is only £500/week, it means only £500/week will be included in the care account – BUT living costs will also be deducted from this. These living costs are nominally calculated at £230 per week (approx. £12,000/year), and so in this example only £270 would actually count towards the cap (£500 less £230).

It’s easy to see that, by the time a person reaches the cap, they may have paid a great deal more than £72,000.

So, in essence, the lower the local authority rate, the less is included in any care account, and so the longer it will take a person’s total care costs to accumulate to reach the cap.

In the meantime they will have to pay the full cost of their care – and even when they reach the cap they will still have to continue to pay all living costs and all costs of accommodation in a care home. If a person can’t pay this, the local authority will help.

How will social care care needs be assessed under the new system?

There will be a new system of social care assessments, and this is a contentious point about the new Care Act. In many people’s views, the proposed system leaves scope for a high degree of both subjectivity and error on the part of the assessor.

But remember – and this is a vital point in relation to NHS Continuing Healthcare – if a person has care needs that are beyond the local authority’s legal remit for care provision, the NHS should still provide and pay for all care – with no means testing. NHS Continuing Healthcare funding is not affected.

If a person is receiving NHS Continuing Healthcare funding, the cap is not directly relevant to them while they are receiving that funding. There should also be no cap on NHS Continuing Healthcare funding, despite some Clinical Commissioning Groups incorrectly now trying to impose one.

A person who is awarded Continuing Healthcare funding may have previously been self-funding, and from April 2016* onwards (*see the note at the end of this article) any self-funded payments (for actual care) were due to be recorded and count towards the cap.

A person currently receiving Continuing Healthcare funding may, at some point, have that funding taken away and be deemed as needing only social care. If this happens, and if it’s justified in being removed, and the person becomes self-funding, their payments for care will of course count towards the cap.

Given the significant extra workload that will land at a local authority’s door with these new assessments, it’s important for self-funders to make contact with the local authority sooner rather than later, to be assessed from October 2015 onwards – in time for a ‘care account’ to be set up by April 2016*. (*See update at the end of this article.)

New social care assessments

Here’s the controversial bit:

The amount a person may need to pay for their social care will hinge on what scores or comments one sole assessor decides to put on an assessment form. The amount of care that will count towards the cap will be only those needs that the assessor actually records and decides are ‘eligible’ needs.

If care needs get overlooked or missed out, the person being assessed will end up with a lower ‘estimated budget’, there will be less recorded in their care account, they will pay more out of their own money and they will take longer to reach the cap.

Just like with NHS Continuing Healthcare, these new social care assessments are about care needs only; they should not be an assessment of a person’s money.

It is likely that local authorities will outsource the assessment of self-funders’ care needs to a third party. In this there is a risk that the companies doing such care assessments may not have the skills and knowledge to properly assess needs. (And remember this is an assessment of care needs, not money.)

Such assessments and/or reassessments could even be done over the phone, again allowing scope for grave error in determining a person’s actual level of need.

Also, in any new social care assessment, the assessor MUST take account of potential eligibility for Continuing Healthcare. However, many people fear that the people carrying out these tick-box social care assessments won’t have the knowledge or experience to understand what actually constitutes eligibility for NHS Continuing Healthcare.

It means a box could be ticked to say Continuing Healthcare has been considered and discounted, when in fact the assessor has not properly evaluated the criteria in the Continuing Healthcare Checklist at all.

There would seem huge scope for error here. And it would seem unlikely that any proper consideration of Continuing Healthcare eligibility could possibly be made if a self-funder is just asked a few questions over the phone by someone without professional knowledge of the person’s health and nursing care needs.

Before reaching the new social care cap

Before a person reaches the social care cap, and assuming they have money and/or assets above the means test threshold, they will pay for all of their care.

Again, this does not apply to NHS Continuing Healthcare – which is not means tested.

No care costs paid before April 2016* will count towards the cap. (*See the update at the end of this article.)

Top-up fees will not count towards the cap.

Any other services that are not in the original social care assessment of eligible needs will not count towards the cap.

Interest charged by local authorities on deferred payment arrangements (see below) will not count towards the cap.

Financial help provided by the local authority towards actual care costs will count towards the cap.

As with Continuing Healthcare, families will need to be vigilant to ensure that their relatives are being properly assessed and that all care needs are taken into account. The number of appeals is expected to be high.

Read more about concerns over the new social care assessments

New means test thresholds from April 2016

Once a person has reached the cap, i.e. they have paid £72,000 for their actual care (excluding living costs), the local authority will provide funding based on a means test. The individual will still be responsible for paying for accommodation, general living costs, etc. – and, if applicable, care fees top up payments will still need to be paid by someone other than the local authority.

Separately from the care fees cap, new thresholds for means tested care were due to come into effect in April 2016*. (*See update at the end of this article.) Essentially:

• if property is included in the value of a person’s money and assets, the new upper means test threshold will be £118,000 (currently £23,250), i.e. anyone will money above this level will pay for all of their care
• if property is disregarded (for example if a spouse still lives there), the upper threshold will be £27,000, and means tested support will be available from the local authority
• the new lower threshold (below which a person contributes only from their income, not their capital) will be £17,000 (currently £14,250).

…and this one: Further Dept. of Health factsheet

Your care costs will be recorded in your care account regardless of how much money you have and regardless of any means test threshold. This care account is the amount you’re paying for your actual care that counts towards the cap.

Universal deferred payment schemes

These deferred payment arrangements are designed to give people a choice about whether or not to sell their home to pay for care. A person can put off the sale and the local authority will cover care costs in the meantime and then recoup costs from the sale of the property later on.

These arrangements will continue but now a local authority will charge interest (at 2.65% p.a.) and the agreements will only apply to people who have already used up their other money and savings down to the upper means test limit (currently £23,250, from April 2016 £27,000).

The local authority will also be able to levy an admin charge for such arrangements. A local authority must offer a deferred payment arrangement if a person has no other funds with which to pay for care.

Deliberate deprivation of assets

The restrictions on deliberately giving away or hiding money to avoid care fees will still apply, and it’s vital to take good independent financial advice before doing anything. People will still be able to make certain gifts under inheritance tax rules.

Hospital discharge and NHS Continuing Healthcare

One of the most common problems people encounter when being discharged from hospital and needing ongoing care is that members of hospital discharge team often seem very keen to find out about a patient’s money – and yet the focus should be on the patient’s ongoing care needs – not their money.

No one should be asking about a patient’s money until it has been clearly shown who is responsible for paying for any ongoing care – based on care needs only.

The Care Act requires the NHS to notify a local authority if a person being discharged from hospital is likely to require ongoing care and support. This is called a ‘notice’ or ‘assessment notice’, i.e. a hospital is giving the local authority notice that there are ongoing care needs for which provision needs to be made.

Also, the Dept. of Health’s “Care and Support Statutory Guidance” issued under the Care Act makes it clear that a person should be assessed for NHS Continuing Healthcare funding prior to their discharge from hospital. Annex G of this guidance states:

“Before issuing an assessment notice, the NHS body must have also completed any assessment of the potential Continuing Health Care needs of the patient and if applicable made a decision on what services the NHS will be providing.”

Annex H5 of this same guidance covers more about NHS Continuing Healthcare funding.

The Care Act and NHS Continuing Healthcare

Remember…

Given that many people in the care sector – both within local authorities and the NHS and also professional advisers – and focused heavily on the Care Act at the moment, NHS Continuing Healthcare could get forgotten when families are told about care funding.

Remember these three points:

1. the Care Act does not change NHS Continuing Healthcare
2. a person needing full time care who has health needs should still be assessed for Continuing Healthcare before they pay a penny in care fees
3. on discharge from hospital a person should be assessed for Continuing Healthcare funding

All the current talk about the Care Act in the press and by people in health and social care could mislead people into thinking that all care is social care – and that all care is means tested. This is not the case.

NHS Continuing Healthcare is still provided by the NHS and it is not means tested – and it has nothing to do with a person’s savings or property. It is provided and funded by the NHS regardless of a person’s means. The Care Act does not change this.

Remember also that if a person is eligible for NHS Continuing Healthcare, the NHS funding that follows should not only cover their healthcare and nursing care needs, but also that person’s social care needs.

*UPDATE:  Important note – the Conservative government announced in July 2015 that it is shelving both the new cap on care fees and the new means test threshold until 2020. This will come as a blow to those paying for their own care. Read more about the care fees cap postponement here – and what it means for self-funders.

Read more about NHS Continuing Healthcare

Does your spouse or partner have to pay for your care?

If you’re wondering whether one partner in a couple is liable for the other’s care costs, generally speaking the answer is no.

Age UK have produced an excellent factsheet to help answer questions about paying for care if you have a partner, and it’s worth reading: Paying for care in a care home if you have a partner.

Keep in mind at all times, though, that:

The only time anyone should be asked to pay for care is once it has been clearly shown that they are not eligible for NHS funding. So, if a person with health needs requires full time care, no one should carry out a financial assessment or ask about their money until an assessment for NHS Continuing Healthcare has been carried out – and a proper decsion has been reached about who is actually responsible for care costs.

Paying for care if you have a partner

If you do have to undergo a means test, always remember that:

• this should only look at the assets/savings of the person needing care – not the partner
• the partner who does not require care should not be left in fiancial hardship after their spouse’s/partner’s assets have been means tested
• if the partner who does not need care is still living in the house, and this is jointly owned, it must be disregarded while the remaining partner is living there
• generally speaking you should each be treated as separate individuals as far as your money is concerned, even if you both need care at the same time
• it’s important to consider ongoing house maintenance costs (insurance, heating, etc) when being means tested, so that there are enough funds to maintain the property, especially if the stay in care is temporary

But remember, this only applies if you’re not eligible for NHS Continuing Healthcare funding – and that should be assessed first.

Regardless of your current health, and regardless of who actually has to pay for care, be sure also to have a Power of Attorney in place, so that someone you trust can act on your behalf if needed. This is such an important point. Trying to deal with health and social care authorities without one can be extremely difficult.

Also, always take independent financial advice before you make decisions about your money, especially when it comes to care fees. There are many potential pitfalls. Be sure that any adviser you speak to understands the CRAG rules inside out (Charging for Residential Accommodation Guide).

Read the AgeUK report here: Paying for care in a care home if you have a partner.

 

Does your relative need full time care?

Beware the 5 biggest myths about care fees…

The whole subject of care fees can be a minefield. Much of the information on the internet, in the press – and from the health and social care authorities themselves – is misleading, and often just plain wrong! It simply reinforces the 5 biggest myths about care fees.

Maybe you’ve been told your relative has to pay for care. Or perhaps you’ve heard about NHS funding for care and you’re wondering if you can apply for NHS Continuing Healthcare.

Mistakes about paying for care are made right at the start. People are told that if you have a certain level of savings and assets you have to pay. Not true. What should happen at the very beginning is an assessment of your health needs, not your money.

Most people are led to believe that care is just ‘care’. However, there is social care and, separately, there is healthcare/nursing care. Healthcare and nursing care are free in the UK, in law. Social care is means tested.

When someone goes into care the very first thing that should happen is an assessment for their health needs and their nursing needs. And it’s only if they’re not eligible for NHS funding that money should even been discussed. This almost always happens the other way round, though. People are asked straight away whether they have a house and/or how much money they’ve got.  This is one of the reasons care funding mistakes are made.

If this happens to you, simply say: ‘At this point in time this is not about money, this is about health needs.’ Then ask for an NHS Continuing Healthcare assessment. This is the funding that covers 100% of care costs for someone in care who has a certain level of health or nursing care needs. You can also ask for an assessment if your relative has been in care for some time.

Very often the first point of contact anyone has with the care authorities is with a local authority or local council. However, local authorities and councils provide (means tested) social care, and very often nobody mentions that there is also NHS funding for full time care.

People just don’t know about NHS funding and they’re not told about it; it’s one of the biggest scandals in our care system

As a result, many thousands of people are paying for healthcare and nursing care – care that should be provided and paid for by the NHS – regardless of a person’s age. If care homes didn’t exist those people would be in hospital and paid for 100% by the NHS.

Let’s look at the 5 biggest myths about care fees. They are myths that may have been told to you as fact…

5 biggest myth about care fees

1. “All care is means tested and so, if you have a house, you always have to pay.” Not true. The decision as to whether you have to pay for care does not depend on whether you have a house; it depends on your health and care needs.
2. “If you have savings over £23,350 you always have to pay for care.” Not true. See point 1 above.
3. “If you have health/nursing needs – but you also have savings and/or a house – you have to pay.” Not true. Healthcare needs come before money – and it doesn’t matter how much money you have, if you need healthcare or nursing care it is these things that determine who pays, not what’s in your wallet.
4. “It’s not worth applying for NHS Continuing Healthcare funding because it only covers specialist needs – and it doesn’t apply to people with dementia.” Absolutely not true! So many people are told this – by people in all parts of the care industry. NHS Continuing Healthcare funding does not depend on any specific diagnosis or any particular specialist needs. It’s about your day-to-day health and care needs – whatever the underlying diagnoses or problems are, and regardless of whether or not you have dementia.
5. “If your spouse needs care and you own a house together, you will have to move and sell the property to pay for their care.” Not true. No one should be asked to pay for anyone else’s care (aside from top-ups, which are linked to social care) – and you don’t have to sell your house to fund someone else’s care.

There are also many other myths flying around about care fees.

The health and social care authorities often seem to be complicit in perpetuating these myths, and it leaves families exasperated, exhausted and seriously out of pocket trying to uncover the truth.

Always remember, it is only social care that is means tested, not nursing care.

What’s the difference between a healthcare need and a social care need?

Why long term care fees are a con