This piece first appeared in Saga Magazine in August 1998
The text here may not be identical to the published text

Assault on Older People's Civil Liberties


new rules on paying for care homes


People who pay their own way in a residential care or nursing home may find it harder to get help from the local authority when their money runs out after a recent change in the guidance given to local authorities by the Government. The new rules, which took care home owners by surprise, were made in March despite the fact that the whole question of how society pays for the care needs of older people is currently being studied by a Royal Commission.

The new guidance affects people who moved into a care or nursing home when they had savings or capital of more than £16,000. People in that position have to pay the whole of the fees themselves and more often than not find a suitable home without discussing the matter with the local social services department. With fees for residential care homes running at £250 a week or more in many parts of the country, and those for full nursing homes around £100 a week more than that, savings run out very quickly. And once they fall to £16,000, the local authority can be asked to help pay the fees.

Local authorities all have their own rules about what level of fees they consider reasonable. In some areas the council will not help with fees above £200 a week. To find a room at that price it can be necessary to share or to go into a home with only the most basic facilities. So naturally many people who start off by funding themselves move into more expensive homes or gladly pay extra for the privacy of a single room. But when their savings fall to £16,000 and ask the local authority to help, the reply may be that the home is more expensive than it will pay for and extra money has to be found.

For example, Mary Rose has a state retirement pension of £75 a week and savings of £18,000. She decides to go into a room of her own in The Briars care home. The fees are £290 a week which she pays using most of her pension and meeting the rest from her capital. After nine weeks her savings are reduced to £16,000 and she applies for help from the local council. A social worker comes round and assesses her needs. She agrees that Mary needs to live in a care home. The next step is to assess her resources to see how much she and the local authority will each pay towards the fees. The rules state that she can keep just £14.45 a week of her income so Mary must contribute the balance of £60.55. In addition her £16,000 savings is counted as if it produces an income of £24 a week (see Box) and she is expected to contribute that much from her capital making a total contribution of £84.55 a week. Normally, that would leave a balance of £215.45 which the council would pay.

But Abbeyshire County Council, where Mary lives, has decided that a reasonable level of fees in the area is not £300 a week but just £235 a week. So it will not help with any part of the fee above that level. It therefore expects Mary to contribute £84.55 towards the fees, pays the balance of £150.45 to take the total up to its £235 limit and then tells Mary she must find the remaining £65 from somewhere else. Mary naturally thinks she will pay that from own her capital as well.

Until March this year the guidance given to local authorities said

"There is no reason why LAs should not, at the request of the resident, arrange more expensive accommodation for someone who can from their own resources afford to pay the additional cost."

Most local authorities have taken this to mean that people in Mary's position were entitled to meet the shortfall a week from their capital. That meant that they could stay in the home they were used to, paying the extra themselves. It meant the local authority didn't pay out more than for more expensive accommodation than it considered reasonable. And everyone was happy.

But that guidance was changed by a circular issued to local authorities by the Department of Health in March. It said the previous advice was "misleading" and "It is the Department's view that the [law] does not permit a resident to use their own resources to pay for more expensive accommodation than the LA would be prepared to pay for."

This revised guidance fits in with what the Department of Health says its lawyers believed all along. The shortfall cannot be paid by Mary herself. It CAN be met by Mary's relatives or friends. it CAN be paid by a charity. It CAN even be met by the home reducing the fees. In fact it CAN be paid by anyone else at all. But Mary herself - the one person who stands to gain - CANNOT pay it from her own money. To Sheila Scott, Director of the National Care Homes Association, the new rules are is nothing less than an assault on the civil liberties of older people

"It is extraordinary that the Department of Health tells people how to spend their own money. We are taking legal advice on the simple issue of a person's civil rights. How can a Government tell a citizen how they can spend their money? We are going to be talking to the Department of Health about the rights and wrongs of it."

The Department of Health says the law is on its side. In 1992 the Secretary of State for Health - then Virginia Bottomley - issued formal Directions about the choice which elderly people going into a home could make about where they lived. The Directions were intended to make it clear that a person going into a care home could choose which one they went to - within limits. The Directions, which have the force of law, also state

"If a resident requests it, the authority must also arrange for care in accommodation more expensive than it would normally fund provided there is a third party willing and able to pay he difference between the cost the authority would usually expect to pay and the actual cost of the accommodation."

The Department says that means ONLY a third party can meet the difference. But a spokesman admitted that there was a contradiction between that and the guidance. Although that guidance was also issued in 1992 and has remained unchanged for six years, the Department has chosen now to resolve the ambiguity by issuing a revision to it.

Not everyone believes the Department's line on this curious turn of events. One is Dr. Ray Jones, Director of Social Services for Wiltshire County Council

"It is a change and they are aware it is a change. I wrote to the Department of Health in April and May and I still don't have a clear understanding about why the guidance is changed. Meanwhile, we're not implementing it, we're challenging it with the Department. We don't want to distress elderly and disabled people. They are being told they can’t spend their own money in the way they want to. So the only solution is to move them to another home with all the distress or difficulties that will cause them."

The Department thinks Dr Jones's fears are unjustified. It has confirmed that although the new guidance applies to NEW contracts entered into after it was issued in March, no-one who is already meeting the shortfall out of their own resources will have to move out. Those contracts will continue to be honoured. Indeed, people in that position could now say to the local authority that they will stop meeting shortfall as the law says they cannot do so. That would leave the council having to foot the bill for a home which was more expensive than it normally paid for. However, that course of action is not recommended. Anyone in a home meeting part of the shortfall from their own capital who is happy to do so, should carry on and not put the arrangement at risk.

But for people already in a home who pay the whole of the fees themselves and whose capital is falling to around £16,000 face a bleak future. Under the new guidance, if they go to the local authority for help, then they will be told that they must find a 'third party' - a relative or charity - to meet the shortfall. That, of course, is a huge ongoing commitment for anyone to take on. But if they cannot then they will have to move out.


HOW CAPITAL IS COUNTED
If you have capital of more than £16,000 then the local authority will NOT help you at all with your fees for a residential care or nursing home.

If your capital is £10,000 or less then its value is ignored completely and so is any income it produces when the council works out how much help to give with the fees.

Capital between £10,000 and £16,000 is counted as income on a sliding scale. Every whole £250 over £9751 counts as £1 a week of income. So £10,000 counts as £1, £12,000 counts as £8 and the maximum £16,000 counts as £24. Any actual income is ignored. With interest rates of more than 7% per year gross available in High banks and building societies, this scale is reasonably generous.

As your capital decreases let the local authority know every time it crosses a £250 band - its contribution to your fees should rise by £1 a week.

Any money counts as 'capital' if it is in cash, in a bank or building society account - including a TESSA - in shares, unit trusts, or Peps, etc. Property counts as capital if it is empty or if the people living there are under 60 and healthy.


August 1998


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