CARE ACT 2014
The Act gives local authorities a general power to charge for certain types of care and support at their discretion and, where charges do apply, for a financial assessment to be undertaken to determine the individual’s ability to pay.
It also allows the local authority to recover as debt any sums owed, such as unpaid charges and interest.
MANCHESTER SPECIFIC INFORMATION
- 1. Introduction to Charging and Financial Assessment
- 2. Charging and Financial Assessment
- 3. Charging for Care and Support in a Care Home
- 4. Charging for Non-Residential Care and Support
- 5. Self-Funding
- 6. Pension Reforms
- 7. Complaints
1. Introduction to Charging and Financial Assessment
1.1 Introduction and principles
The Care Act 2014 provides a single legal framework for charging for care and support. It enables a local authority to decide whether or not to charge a person when it is arranging to meet a person’s care and support needs or a carer’s support needs.
Where a local authority arranges care and support to meet a person’s needs, it may charge the adult, except where the local authority is required to arrange care and support free of charge. The overarching principle is that people should only be required to pay what they can afford. People will be entitled to financial support based on a means test and some will be entitled to free care.
The framework is therefore based on the following principles that local authorities should take into account when making decisions on charging. The principles are that the approach to charging for care and support needs should:
- ensure that people are not charged more than it is reasonably practicable for them to pay;
- be comprehensive, to reduce variation in the way people are assessed and charged;
- be clear and transparent, so people know what they will be charged;
- promote wellbeing, social inclusion, and support the vision of personalisation, independence, choice and control;
- support carers to look after their own health and wellbeing and to care effectively and safely;
- be person focused, reflecting the variety of care the variety of options available to meet their needs;
- apply the charging rules equally so those with similar needs or services are treated the same and minimise anomalies between different care settings;
- encourage and enable those who wish to stay in or take up employment, education or training or plan for the future costs of meeting their needs to do so; and
- be sustainable for local authorities in the long term.
Alongside this, local authorities should ensure there is sufficient information and advice available in a suitable format for the person’s needs, in line with the Equality Act 2010 (in particular for those with a sensory impairment, with learning disabilities or for whom English is not their first language), to ensure that they or their representative are able to understand any contributions they are asked to make. Local authorities should also make the person or their representative aware of the availability of independent financial information and advice (see Financial Advice and Information).
1.2 Common issues for charging
Local authorities have a duty to arrange care and support for those with eligible needs, and a power to meet both eligible and non-eligible needs. In all cases, a local authority has the discretion to choose whether or not to charge under the Care Act following a person’s needs assessment. If it decides to charge, it must follow the Care and Support (Charging and Assessment of Resources) regulations and have regard to the guidance.
The detail of how to charge is different depending on whether someone is receiving care in a care home, or their own home, or another setting. However, there are some common elements.
Where a local authority chooses to charge, regulations determine the maximum amount a local authority can charge a person.
The regulations regarding charges for persons in care homes are very specific. For example, local authorities are precluded from paying towards the costs of care for care home residents who have in excess of the upper capital threshold (currently £23,250). However, the authority has more choice in determining how they charge people in other care settings and the Care Act asks each local authority to develop and maintain their own charging policy in regard to non-residential charges.
In deciding what it is reasonable to charge, local authorities must ensure that they do not charge more than is permitted under the regulations and as set out in the Care and Support Statutory Guidance (2016).
The guidance and the supporting annexes assume that the appropriate assessment of needs has been carried out and the local authority has chosen to charge (see Assessment). It therefore provides detail on how to conduct the financial assessment for that person.
It must be noted that the local authority has no power to assess couples or civil partners according to their joint resources. Each person must therefore be treated individually.
Where a person lacks capacity, they may still be assessed as being able to contribute towards the cost of their care. However, a local authority must put in place policies regarding how they communicate, how they carry out financial assessments and how they collect any debts that take into consideration the capacity of the person as well as any illness or condition. Local authorities are expected to use their social work skills both to communicate with people and also to design a system that works with, and for, very vulnerable people. Sometimes it is useful to consult with and engage with family members; however, family members may not have the legal right to access the person’s bank accounts. Where possible, local authorities should work with someone who has the legal authority to make financial decisions on behalf of a person who lacks capacity. If there is no such person, then an approach to the Court of Protection is required.
The charging rules also apply equally to people in prison. Whilst prisoners have restricted access to paid employment and benefits (and earnings in prison are to be disregarded for the purposes of the financial assessments), any capital assets, savings and pensions will need specific consideration as set out in Chapter 8, Charging and Financial Assessment, Care and Support Statutory Guidance (Department of Health, 2016) and relevant annexes. For more information on prisons and approved premises (see Prisons, Approved Premises and Bail Accommodation).
1.3 Capital limits
The Charging and Assessment of Resources Regulations 2014 set out an upper capital limit (currently £23,250) and a lower capital limit (currently £14,250) for the purposes of financial assessment.
The upper limit determines at what point a person is entitled to local authority support to meet their eligible needs whilst the lower limit sets out a level of disregarded savings, that is the point at which they will not need to contribute to the cost of their care and support from their capital.
Both the upper and lower limits must be applied to persons in residential care, meaning that the Council is precluded from providing residential care funding for persons with over £23,250, but the Council has discretion to set higher threshold for those persons receiving non-residential care.
Manchester has chosen not to apply an upper capital limit to non-residential care recipients which means that persons with over £23,250 may still be eligible for funding. A financial assessment will determine how much the individual is required to pay.
In both residential and non-residential care scenarios any capital above the lower limit (currently £14,250) attracts a weekly tariff at a rate of £1 for every £250 (or part thereof) held above the limit. This rate is set by the Department of Health.
Capital of £20,180.00 would attract a tariff income charge of £24 per week (£20,180 – £14250 = £5,930. £5,930 /250 = £23.72 rounds up to £24).
The weekly tariff is taken into account as part of the person’s income when determining their ability to pay towards their care services.
Full detail regarding capital is set out in Annex B: Treatment of Capital, and the local authority must read that guidance before undertaking a financial assessment.
2. Charging and Financial Assessment
2.1 Free services
The local authority must not charge for certain types of care and support which must be arranged free. These are:
- intermediate care, including reablement, which must be provided free of charge for up to six weeks. However, local authorities must have regard to the guidance on preventative support (see Preventing, Reducing or Delaying Needs). This sets out that neither should have a strict time limit but should reflect the needs of the person. Local authorities therefore may wish to apply their discretion to offer this free of charge for longer than six weeks where there are clear preventative benefits, such as when a person has recently become visually impaired;
- community equipment (aids and minor adaptations). Aids must be provided free of charge whether provided to meet or prevent/delay needs. A minor adaptation is one costing £1,000 or less;
- care and support provided to people with Creutzfeldt-Jacob Disease;
- aftercare services/support provided under section 117 of the Mental Health Act 1983;
- any service or part of service which the NHS is under a duty to provide. This includes Continuing Healthcare (see Continuing Healthcare (NHS)) and the NHS contribution to Registered Nursing Care;
- more broadly, any services which a local authority is under a duty to provide through other legislation may not be charged for under the Care Act 2014;
- assessment of needs and care planning may also not be charged for, since these processes do not constitute ‘meeting needs’.
2.2 Carrying out a financial assessment
The legal framework for charging is set out in the Care Act 2014. When choosing to charge, a local authority must not charge more than the cost that it incurs in meeting the assessed needs of the person.
Where a local authority has decided to charge, except where a ‘light touch assessment’ (see Section 2.6, Light Touch Financial Assessments) is permissible, it must carry out a financial assessment of what the person can afford to pay and, once complete, it must give a written record of that assessment to the person. This could be provided alongside a person’s care and support plan or separately or online. It should explain how the assessment has been carried out, what the charge will be and how often it will be made, and if there is any fluctuation in charges, the reason. The local authority should ensure that this is provided in a manner that the person can easily understand, in line with its duties on providing information and advice (see Financial Advice and Information).
In carrying out the assessment, the local authority must have regard to the detailed guidance set out in Annex B: Treatment of Capital and Annex C: Treatment of Income that set out how both capital and income should be treated. A local authority must regularly reassess a person’s ability to meet the cost of any charges to take account of any changes to their resources. This is likely to be on an annual basis, but may vary according to individual circumstances. However, this should take place if there is a change in circumstance or at the request of the person.
See also Mental Capacity
At the time of the assessment of care and support needs, the local authority must establish whether the person has the capacity to take part in the assessment. If the person lacks capacity, the local authority must find out if the person has any of the following as the appropriate person will need to be involved:
- enduring power of attorney (EPA);
- lasting power of attorney (LPA) for property and financial affairs;
- lasting power of attorney (LPA) for health and welfare;
- property and affairs deputyship under the Court of Protection;
- any other person dealing with that person’s affairs (e.g. someone who has been given appointeeship by the Department for Work and Pensions (DWP) for the purpose of benefits payments).
People who lack capacity to give consent to a financial assessment and who do not have any of the above people with authority to be involved in their affairs, may require the appointment of a deputy to manage property and financial affairs. Family members can apply for this to the Court of Protection or the local authority can apply if there is no family involved in the care of the person. While this takes some weeks, it then enables the person appointed to access information about bank accounts and financial affairs. A person with dementia for example should not be ‘forced’ to undertake a financial assessment, to sign documents they can no longer understand and should not be punished for any incomplete information that is elicited from them. The local authority should be working with an EPA, a LPA or a deputy instead.
In the financial assessment, the person’s capital is taken into account unless it is subject to one of the disregards set out in the regulations and described in Annex B: Treatment of Capital. The main examples of capital are property and savings. Where the person receiving care and support has capital at or below the upper capital limit (currently £23,250), but more than the lower capital limit (currently £14,250), they may be charged £1 per week for every £250 in capital between the two amounts. This is called ‘tariff income’. For example, if a person has £4,000 above the lower capital limit, they are charged a tariff income of £16 per week.
In assessing what a person can afford to pay, a local authority must take into account their income. However, to help encourage people to remain in or take up employment, with the benefits this has for a person’s wellbeing, earnings from current employment must be disregarded when working out how much they can pay. There are different approaches to how income is treated depending on whether a person is in a care home or receiving care and support in their own home. Full details are set out in Annex C: Treatment of Income and other settings.
As part of the Armed Forces Covenant, the government has committed to making sure veterans are not disadvantaged by their service and when appropriate receive special consideration. To support veterans injured on active service, payments to veterans under the War Pension Scheme, with the exception of Constant Attendance Allowance which is specifically intended to pay for care, must be disregarded in the assessment of what a veteran can pay for care from 10 April 2017. This brings payments to veterans under the War Pension Scheme into line with Guaranteed Income Payments under the Armed Forces Compensation Scheme which have been disregarded since October 2012.
2.6 ‘Light touch’ financial assessments
In some circumstances, a local authority may choose to treat a person as if a financial assessment had been carried out. In order to do so, the local authority must be satisfied on the basis of evidence provided by the person that they can afford, and will continue to be able to afford, any charges due. This is known as a ‘light touch’ financial assessment.
The main circumstances in which a local authority may consider carrying out a light touch financial assessment are:
a) where a person wishes to access local authority support in meeting their needs but does not wish to undergo a full financial assessment for personal reasons, but is willing and will continue to be willing to pay all charges due;
b) where the local authority charges a small or nominal amount for a particular service (for example for subsidised services) which a person is clearly able to meet and would clearly have the relevant minimum income left, and carrying out a financial assessment would be disproportionate;
c) when an individual is in receipt of benefits which demonstrate that they would not be able to contribute towards their care and support costs.
Where a person does not agree to the charges that they have been assessed as being able to afford to pay under this route, a full financial assessment may be needed.
When deciding whether or not to undertake a light touch financial assessment, a local authority should consider both the level of the charge it proposes to make, as well as the evidence or other certification the person is able to provide.
Manchester applies light touch assessments to temporary residential placements of eight weeks and less. The charge is based on the basic benefit and Personal Expense Allowance (see Section 3.3) levels applicable to the person’s age. The person is informed of the light touch assessment and given an opportunity to have a full assessment if they so wish.
2.7 Deprivation of assets and debts
People with care and support needs are free to spend their income and assets as they see fit, including making gifts to friends and family. This is important for promoting their wellbeing and enabling them to live fulfilling and independent lives. However, it is also important that people pay their fair contribution towards their care and support costs.
There are some cases where a person may have tried to deliberately avoid paying for care and support costs through depriving themselves of assets – either capital or income. Where a local authority believes they have evidence to support this, it must read Annex E: Deprivation of Assets concerning the deprivation of assets. In such cases, the local authority may either charge the person as if they still possessed the asset or, if the asset has been transferred to someone else, seek to recover the lost income from charges from that person. However, the local authority cannot recover more than the person gained from the transfer.
Where a person has accrued a debt, the local authority may use its powers under the Care Act to recover that debt. In deciding how to proceed, the local authority should consider the circumstances of the case before deciding a course of action. For example, a local authority should consider whether this was a deliberate avoidance of payment or due to circumstances beyond the person’s control.
Ultimately, the local authority may institute County Court proceedings to recover the debt. However, they should only use this power after other reasonable alternatives for recovering the debt have been exhausted. Further details on how to pursue debts are set out in Annex D: Recovery of Debts.
3. Charging for Care and Support in a Care Home
Where a local authority has decided to charge and undertaken the financial assessment, it should support the person to identify options of how best to pay any charge. This may include offering the person a deferred payment agreement (see Deferred Payment Agreements).
3.2 Top up payments
Where a local authority is meeting needs by arranging a care home, it is responsible for contracting with the provider. It is also responsible for paying the full amount, including where a ‘top up’ fee is being paid. However, where all parties are agreed it may choose to allow the person to pay the provider directly for the ‘top up’ where this is permitted. In doing so it should remember that multiple contracts risk confusion and that the local authority may be unable to assure itself that it is meeting its responsibilities under the additional cost provisions in the Care Act. Local authorities must ensure they read the guidance Annex A: Choice of Accommodation and Additional Payments on the use of ‘top up’ fees.
3.3 Personal Expenses Allowance (PEA)
People in a care home will contribute most of their income, excluding their earnings, towards the cost of their care and support. However, a local authority must leave the person with a specified amount of their own income so that the person has money to spend on personal items such as clothes and other items that are not part of their care. This is known as the personal expenses allowance (PEA). This is in addition to any income the person receives from earnings. Ministers have the power to adjust the PEA and have done so annually to ensure it maintains its value. These changes are communicated by Local Authority Circular and are binding. Local authorities have discretion to apply a higher income allowance in individual cases, for example where the person needs to contribute towards the cost of maintaining their former home. Further detail is set out in Annex B: Treatment of Capital.
3.4 Choice of accommodation
Where the care planning process has determined that a person’s needs are best met in a care home, the local authority must provide for the person’s preferred choice of accommodation, subject to certain conditions. This also extends to shared lives, supported living and extra care housing settings. Determining the appropriate type of accommodation should be made with the adult as part of the care and support planning process, therefore this choice only applies between providers of the same type.
The local authority must ensure that the person has a genuine choice of accommodation. It must ensure that at least one accommodation option is available and affordable within the person’s personal budget and should ensure that there is more than one of those options. However, a person must also be able to choose alternative options, including a more expensive setting, where a third party or in certain circumstances the resident is willing and able to pay the additional cost (‘top up’). However, an additional payment must always be optional and never as a result of commissioning failures leading to a lack of choice. Detailed guidance is set out in Annex A: Choice of Accommodation and Additional Payments to which a local authority must have regard.
4. Charging for Non-Residential Care and Support
These charging arrangements cover any setting for meeting care and support needs outside of a care home. For example, care and support received in a person’s own home, and in other accommodation settings such as in extra care housing, supported living accommodation or shared lives arrangements.
The intent of the regulations and guidance is to support local authorities to assess what a person can afford to contribute towards their care costs. Local authorities should also consider how to use their discretion to support the principles of care and support charging.
This guidance does not make any presumption that local authorities will charge for care and support provided outside care homes, but enables them to continue to allow discretion.
Because a person who receives care and support outside a care home will need to pay their daily living costs, the charging rules must ensure they have enough money to meet these costs. After charging, a person must be left with the minimum income guarantee (MIG) appropriate to their age and benefit entitlement. The minimum amounts of MIG are set annually by the Department of Health. In addition, local authorities must consider housing related expenditures such as Council Tax and rent (net of any Housing Benefit received). Where disability related benefits are taken into account in the assessment, further allowances should be considered in relation to the additional costs incurred relating to the individual’s disabilities. This additional disability expenditure is called Disability Related Expenditure (DRE).
4.3 Financial assessment: Capital
The financial assessment of capital for citizen’s receiving non-residential services must exclude the value of the property which they occupy as their main or only home. Beyond this, the rules on what capital must be disregarded are the same for all types of care and support.
See also Self Funders
5.1.1 Above the capital limit
People going into residential care with eligible needs and financial assets above the upper capital limit may ask the local authority to meet their needs. This could be for a variety of reasons such as the person finding the system too difficult to navigate, or wishing to take advantage of the local authority’s knowledge of the local market of care and support services. Where the person asks the local authority to meet their eligible needs, then the local authority may choose to meet their needs, but is not required to do so.
Local authorities should therefore take steps to make people aware that they can request the local authority to meet their needs, in certain circumstances even when they have resources above the financial limits and would not be entitled to financial support with any charges. Local authorities should also offer support to people in meeting their own needs, including providing information and advice on different options, and may offer to arrange contracts with providers (see Information and Advice).
5.2 Advice and information
The information provided to the person following a financial assessment should include information on the right to request the local authority to meet their needs – and how they would be charged – and the advice and support that is available to help people make arrangements to meet their own needs whatever type of support they require.
Where a person has been assessed to pay the full cost of non-residential services, the person remains responsible for paying for the cost of their care and support, but the local authority takes on the responsibility for meeting those needs. This means that the local authority may for example provide or arrange care and support, or make a direct payment which may be a paper based exercise, or some combination of these. For further information on how to meet needs and the options available, see Care and Support Planning.
The local authority must assure itself that whilst the person remains responsible for paying for their own care, they have sufficient assets for the arrangements that it puts in place to remain both affordable and sustainable. The local authority should also take steps to avoid disputes and additional liabilities by securing a person’s agreement in writing to pay the costs that they are responsible for in meeting their needs, including payments to providers. Local authorities should make similar arrangements with any third parties that agree to contribute towards these costs.
6. Pension Reforms
Reforms to defined contribution pensions came into effect in April 2015. The aim of the reforms is to provide people with much greater flexibility in how they fund later life. The government expects there to be a range of new products that people will use to manage and access money from their pensions as and when they need it, and where possible, these will be treated similarly to existing draw down products for charging purposes.
The Pension Wise Service helps people to make informed choices at the point of retirement. This will include information and advice on later life, including the risk that they may need care and support in the future, and will have to pay for it.
For the purposes of charging, a local authority must follow the guidance set out on the treatment of income and capital in Annex B: Treatment of Capital and Annex C: Treatment of Income and treat a person’s assets accordingly. Where a person has chosen to withdraw funds from their pension pot and manage it directly, for example combining it with other assets rather than through a pensions’ product, this may be treated as capital under the rules laid out in Annex B: Treatment of Capital.
A person may wish to make a complaint about any aspect of the financial assessment or how a local authority has chosen to charge. A local authority must make clear what its complaints procedure is and provide information and advice on how to lodge a complaint (see Complaints).
Complaints about the level of charge levied by a local authority are subject to the usual care and support complaints procedure as set out in The Local Authority Social Services and NHS Complaints (England) Regulations 2009.
Where a local authority has established a special panel or fast track review processes to deal with financial assessment / charging issues, they should remind the person they still have access to the statutory complaints procedure.