GETTING STARTED IN CARE

Transcription

1 For Financial Adviser use only not for retail clients GETTING STARTED IN CARE ADVISER GUIDE

2 GETTING STARTED IN CARE - ADVISER GUIDE CONTENTS FIND OUT MORE What is the purpose of this document? This guide has been designed to give a framework to the different areas that advisers will need to know about to guide and assist with and which most clients will need to consider, before making decisions on the provision of Care. The purpose is to support advisers' knowledge and provide a referenced source for a qualified adviser. Although this guide covers most areas, interested advisers may also need additional information and help to cover some of the more specialist areas, so useful links to other sources of guidance and assistance have been provided where necessary.

3 For Financial Adviser use only not for retail clients SECTION 1: INTRODUCTION TO THE CARE WORLD

4 GETTING STARTED IN CARE - ADVISER GUIDE SECTION 1: INTRODUCTION TO THE CARE WORLD SECTION 1: INTRODUCTION TO THE CARE WORLD It is predicted that the number of over 85s will increase fivefold by 2081, compared with 2010, from 1.4 million to 7.2 million(1). In fact, in 2010, there were already 11,600 UK centenarians and the Department for Work & Pensions(2) has predicted that 10 million of us alive today will reach that same milestone. Nursing care home fees Whilst this is good news for current and future generations, an ageing population will clearly have a big impact on the demand for Care services. Age brings with it a greater chance of disability and need for support. 704 More importantly, it will also have an impact on how many of those Care services the State can afford to pay for. Faced with the huge number of people in old age, all of them needing pensions, NHS services and general healthcare, it is likely that the State will come under increasing pressure in its attempts to maintain even the existing levels of benefits. This leads to the conclusion that the majority of people are very likely to have to, at least partly, fund Care themselves Recently the Care fees funding conundrum has achieved a lot of press coverage as both the general public and the Government start to realise the difficulties and implications of ensuring the dilemma of Care fees funding is dealt with. (1) Source: Laing & Buisson Care of Elderly People Report 2014/15 (based on ONS data) (2) Source: Office for National Statistics, population growth estimates Department for Work & Pensions, Future Centurians, Dec The above figures are weekly Click to download > Partnership Care Report 2015

5 GETTING STARTED IN CARE - ADVISER GUIDE SECTION 1: INTRODUCTION TO THE CARE WORLD SECTION 1: INTRODUCTION TO THE CARE WORLD Currently there are over 433,000(3) people in residential care within the UK and with this figure set to increase to 750,000 by 2031 and 1.5 million by 2081, the issue of how to pay for this Care needs to be addressed now. Residential care home fees The average cost of a single room in a nursing home in the UK is 756(3) per week and with care home costs likely to increase by approximately 5% per year until 2020, the cost of Care is starting to affect people s ability to pay. Whilst some Care costs are partially or entirely met by the State or local authority the amount of money spent on Care within the private sector by self funders is currently estimated at 12 billion(3) per year. 534 The importance of financial services to meet the cost of paying for Care has never been more relevant, but given only 7% of all self-funders seek appropriate regulated and qualified financial advice, there is a massive gap in providing this. Although this can be a difficult and emotional area of financial services to deal with, it can also be very rewarding and can help provide the adviser with many more opportunities with the family and estate planning (3) Source: Laing & Buisson Care of Elderly People Report 2014/ The above figures are weekly

6 GETTING STARTED IN CARE - ADVISER GUIDE SECTION 1: INTRODUCTION TO THE CARE WORLD SECTION 1: INTRODUCTION TO THE CARE WORLD The Effect of Demographic Change In demographic terms, the population of the UK is ageing rapidly, with the post-war baby boomers beginning to reach retirement age. Whilst longer lives can be a great benefit, both the Government and society have been slow to address the implications of an older population. Without urgent action this great boon could turn into a series of crises. A Parliamentary Select Committee on Public Service and Demographic Change (4) has been set up to examine the implications of an ageing population, for individuals and public policy in the near future. When considering the decade , its key projections included: 51% more people aged 65 and over in England in 2030 compared to % more people aged 85 and over in England in 2030 compared to million people in Great Britain can currently expect inadequate retirement incomes What s my chance of living to 100? 30% Percentage chance of living to % 20% 15% 10% 5% over 50% more people with three or more long-term conditions in England by 2018 compared to % over 80% more people aged 65 and over with dementia (moderate or severe cognitive impairment) in England and Wales by 2030 compared to 2010 age 65 in 2015 Age age 75 in 2015 age 85 in 2015 An ageing population will clearly have an impact on how many Care services the State can afford to pay for and for whom. The majority of people are very likely to have to at least partly fund themselves where their total assets exceed the means-test limits currently 23,250 in England (with national variations). (4) Source: Ready for ageing? Select Committee report Click to download > Summary of State Benefits and Care Costs

7 GETTING STARTED IN CARE - ADVISER GUIDE SECTION 1: INTRODUCTION TO THE CARE WORLD SECTION 1: INTRODUCTION TO THE CARE WORLD Probability of death by year for typical female aged 65 in the UK population in 2015 The longer people live the longer they can be expected to live. As life expectancy continues to improve in the UK, it is important to estimate if these extra years are healthy and disability free, or not. 5% 4% Life expectancy = 24 years Chance of living beyond life expectancy = 55% The Office for National Statistics publishes data on Healthy Life Expectancy, where people class themselves as in very good or good general health and on Disability Free Life Expectancy, where people class themselves as free from a limiting persistent illness or disability. In the UK, males and females can expect to spend more than 80% of their lives in 'very good' or 'good' general health from birth, falling to around 57% at age 65. 3% 2% It is difficult to predict how long Care will be needed for and therefore how much the total cost might end up being. If financial planning is undertaken, it is usually possible to fund Care costs as long as needed whilst safeguarding as much capital as possible. 1% There are six strategies that can be used to meet clients funding needs. These can be used in isolation or as part of a combination dependent on the individual s circumstances. 0% (5) Source: Figures derived from the CWS 2012-based projection for the UK population

8 GETTING STARTED IN CARE - ADVISER GUIDE SECTION 1: INTRODUCTION TO THE CARE WORLD Six strategies to meet clients funding needs Deferred Payment Agreement Let the property out Equity Release Cash in the bank Use investments Immediate Care Plans This option involves the local authority paying any Care fees shortfall. The local authority agrees to pay, but they would place charge against the property. Your client must meet the criteria to be eligible in the first place. The local authority is now allowed to charge interest on this loan during the person s lifetime. Even so the option is worth considering. It can result in a significant debt on the property over the longer term or, in the worst cases, simply defers the need to sell property in a hurry until a later date. This could be done as a standalone option or in conjunction with the Deferred Payment Agreement. If your client is intent on keeping the property then it would usually be advisable to rent it out so that it is contributing an income towards the overall cost of Care. Ensure all of the costs such as tax, insurance, repairs and management fees have been deducted, before the rental income is used to pay the Care fees shortfall. The net return could be insufficient to meet the shortfall in Care costs. Periods with no tenants mean no rental income generated to pay the Care fees. Your client could release equity from their property to either pay Care fees directly or use them to invest in an Immediate Care Plan. Lenders will typically require repayment of such loans in the event of the last borrower requiring Care and leaving the property unoccupied. Consequently, Equity Release is usually only available for domiciliary Care or if one partner remains at home whilst the other is in Care. As with the Deferred Payment Agreement it can result in a significant debt on the property in the longer term. Your client could simply keep money in the bank and draw money down against the capital as required to meet the surplus costs. An advantage of this option is that on death any leftover funds fall to the estate. However, if the need for Care extends over a period of time, there is also the possibility of all the funds being exhausted. Remaining capital would continue to earn income. The lower the return from interest the greater the adverse impact will be on capital. Another option is to set aside a contingency fund and then invest the remaining proportion in the capital markets. In effect your client would be trying to make the capital work harder than it would if it were sat in a savings account. However, market investments can go down as well as up so, whilst higher returns are possible, so too are lower returns. If the value of the investment were to fall this would, of course, only exacerbate the funding problem. Generally speaking, the more risk the person has to take to achieve the necessary return, the higher the level of volatility they are likely to have to face. These are dedicated tax efficient financial policies specially designed to cover Care fees and are the main retail investment product designed for this purpose. In exchange for a single lump sum, Immediate Care Plans pay an agreed tax-free (6) amount at regular intervals, directly to the Care provider, for the rest of that person s life. The cost of the product is calculated individually, based on the client s age and health and Benefit Payments can be set up to increase over the years to help keep pace with increases in Care fees. This type of policy can be particularly useful in that it can help prevent the person from outliving their capital. Any potential rights to means-tested state benefits may be affected. (6) Source: Taxation is subject to change and will depend on individual circumstances

9 GETTING STARTED IN CARE - ADVISER GUIDE SECTION 1: INTRODUCTION TO THE CARE WORLD SECTION 1: INTRODUCTION TO THE CARE WORLD The opportunity to help those in need Rather than pass clients on to other advisers or perhaps losing the client s loyalty because you cannot help, why not prepare to get involved? Over 41% (7) of people entering Long Term Care are expected to pay their own fees so there is a huge opportunity for advisers to help these people sort out their finances efficiently. In addition, it is predicted that the number of over 85s will increase fivefold by 2081, compared with 2010, from 1.4 million to 7.2 million. This fact alone indicates that the Care sector is going to present a massive increase in opportunities for financial advice to help make people s life a little easier. For financial advisers, there is already a statutory requirement to be aware of the workings of the Care sector. In order to be considered 'independent' under FCA regulation, advisers have to be able to deal with clients in the position of needing Care services. Either by themselves or by referring to other appropriately qualified advisers. While the State can help with some costs, eligibility for help is limited and many people find themselves over the threshold at which State support is provided, currently 23,250 in England (with national variations). Qualifications and Accreditation The minimum requirement for providing advice on Care fees is a specialist qualification in Long Term Care advice, e.g. the CII CF8 or the IFS CeLTCI. Once qualified, accreditation for the achievement and level of expertise can also be sought via a Later Life Adviser Accreditation Scheme (LLAA) from the specialist body the Society of Later Life Advisers (SOLLA). As Partnership is keen to see the number of advisers working in this area expand, it offers interested and specialist Care advisers support in a number of areas: Workshops and training days to help achieve further expertise Support material and lead generation tools to help start conversations Dedicated information for advisers within the financial adviser website section For the right adviser and the right business, Care can be a challenge but is hugely rewarding. The FSA RDR guidance, June 2012 (8) says: Long Term Care insurance contracts are retail investment products. Advising on Long Term Care insurance contracts requires a specialist qualification, but not a separate permission. We do not expect a firm that holds itself out as providing independent advice to have an adviser who is qualified to advise on Long Term Care insurance contracts, because it is a niche market for which we currently require additional qualifications. But, as with pension transfers, all competent retail investment advisers who give independent advice should be able to identify clients for whom a Long Term Care insurance contract should be considered and be in a position to refer these clients on to someone who can provide advice on these products. Advisers should not recommend a product that is an alternative to a long-term Care insurance contract, where a Long Term Care insurance contract would be suitable, because they have not passed the relevant examination. (7) Source: Laing & Buisson, Care of the Elderly People Report 2014/15 Click to download > Summary of State Benefits and Care Costs

10 GETTING STARTED IN CARE - ADVISER GUIDE SECTION 1: INTRODUCTION TO THE CARE WORLD SECTION 1: INTRODUCTION TO THE CARE WORLD The Care Cap There is a common thought amongst consumers in the UK that Care provision will be provided by the State, but this is only correct to a certain extent. The State funding of Long Term Care received increased attention following the Care Act 2014, which introduced a new Care cap in order to limit the amount people have to pay towards their own Care costs in their lifetime giving the opportunity to plan for the cost. In July the Government announced that the introduction of the Care cap, due to be implemented in April 2016 along with its higher threshold limits, would be delayed until April The move came about after councils asked Government for a delay, warning that the Care system which covers both residential care and help at home with tasks such as washing and dressing has been underfunded. Local councils estimate a shortfall of 4.3 billion by the end of the decade nearly a third of the total funding. In addition the Government s move towards the National Living Wage will drive up costs in the Care sector, potentially making matters more difficult. Nevertheless, this cap would have been an important step in the reform of adult social care, although a key point to remember is that the limit was only designed to apply to personal social care which is typically a third of the total Care cost. The cap design as it stands would mean that all consumers above the asset threshold would be expected to pay general household type expenses ( accommodation costs such as heating, lighting and water that they would have paid in their own home), plus any cost of Care which is above the rate that would be paid by the local authority. All support services are means-tested. Those who pay for their own Care will still be liable for significant costs in the run up to reaching the cap and will always be responsible for the accommodation costs both before and after reaching the cap s limit. In reality, however, the outlay for the consumer was likely to be much higher than the cap limit. The main reasons for this are: The cap only applies to personal social Care costs at the local authority rate. If the care home charges more than the local authority rate, the actual Care costs would be higher The Government expects individuals to pay for accommodation, regardless of whether the care home charges for this separately The Care cap only starts to accumulate once the individual s needs have been assessed as being at a relatively high level but support may be needed at a lower level before that As part of the Care Act s information and advice requirement, referral to regulated financial advice is included in the section of the Act already in force, this will allow people to find out more about the options to help pay for their Care. (8) Source:

11 GETTING STARTED IN CARE - ADVISER GUIDE SECTION 1: INTRODUCTION TO THE CARE WORLD SECTION 1: INTRODUCTION TO THE CARE WORLD How much will it cost to meet the cap? CARE 11,966 OR 230 PER WEEK (Up to 72K lifetime cap) + + = EXTRA CARE ACCOMMODATION 5,310 12,000 OR 102 PER WEEK OR 231 PER WEEK (In excess of Local Authority rate) TOTAL 29,276 PER YEAR OR 563 PER WEEK Only this part counts towards the cap Private rate for Care is higher than the Local Authority rate Costs for heating, lighting and water, such as you would pay at home The Care Act became law in The Act introduced changes to the way individuals will pay for Care fees and how they will be assessed for help with these Care fees. A 72,000 cap on Care costs is being introduced. This is designed to limit the total amount clients pay in fees over their lifetime giving them the opportunity to plan. In reality, however, their outlay is likely to be much higher than the 72,000 to meet the cap. The cap has been postponed until 2020 in recognition of existing pressures on social care budgets. 1. The cap applies to Care costs only and at the local authority rate. The actual Care costs may be much higher than this to get the choice they want. 2. The Government expects clients to pay around 12,000 a year for accommodation. 3. The Care cap meter only starts once an individual's needs have been assessed at a relatively high level by their local authority but they may need support before they reach that stage.

12 For Financial Adviser use only not for retail clients SECTION 2: LEAD GENERATION

13 GETTING STARTED IN CARE - ADVISER GUIDE SECTION 2: LEAD GENERATION SECTION 2: LEAD GENERATION In many ways Care advice is not standard financial advice. Unlike property or investment purchases, for example, buying products in this sector is rarely aspirational. In fact, for many in this market there is often an urgency to get somebody placed in Care and the person making the decisions, who may not be the end user of the Care, is likely to be under some stress. Indeed, many Long Term Care solutions are organised by a Power of Attorney not the person needing Care so it is possible you may not speak directly to the client at all. In this set of circumstances it is important that the adviser be easy to find and, although traditional routes to lead generation still work, there are other methods that may also prove fruitful. Clients are looking for help in navigating a path through complex regulations and eligibility criteria to see if they qualify for local authority funded or NHS funded Care, or are deemed self-funders. If they are self-funders, they are looking for help in structuring their finances in such a way that Care fees can be paid indefinitely. This may or may not involve taking out a retail investment product. This highlights the difference between Care advice and financial advice in its many other forms. Right at the start of the process, the adviser needs to engage with the family and, whilst it is the welfare of the individual client which is central, sensitivity to the broader issues can be crucial. Long Term Care advice does not always mean just providing Care funding solutions as it also leads to other areas of financial services. Often the family will require further wealth or asset management advice if any surplus assets are available after the Care funding has been ring fenced. As with any other advice business, you can start slowly or with a big push to gain new clients. If slow and steady is preferred try promoting the service to existing clients, or perhaps holding a seminar for professional connections, or using local media to advertise your expertise to the public and businesses in the area. If a big push works, then put all these in place in a short timescale but it is important to follow up all leads. Existing book and referrals A person looking to fund Long Term Care is not necessarily the person who is in need of Care so consider asking questions in your standard fact-find/review document. Although the clients might not be that easy to identify, asking a few questions of every client you deal with might help them to become more visible. Are you the Power of Attorney for anyone? is a good way of identifying those clients who are currently, or at some point in the future will be, making decisions on behalf of someone else. Professional connections Professional connections offer an invaluable source of enquiries. Solicitors, estate agents and accountants may all have clients that could benefit from your services. The growth in recent years of networking events, and the organisations that facilitate them, gives advisers an opportunity to promote the services they offer. A solicitor s client bank and general day to day activities will also uncover a rich source of potential Care leads. From instructing Powers of Attorney to will writing, the servicing of their older clients and their children will often offer opportunities for the later life adviser. The ability to advise on Long Term Care marks you as a specialist within your profession and opens additional opportunity for referral agreements with other advisers. The regulator is clear that a Care product should never be discounted due to the advisers lack of authorisation to advise on it. As such it may be possible to set up servicing relationships to ensure that clients get access to the right knowledge and outcomes. Lastly, significant opportunity can arise from a positive relationship with an individual or group of care homes. The provision of seminars for residents and their families, perhaps jointly with a solicitor for completeness, provides a valuable service that will generate both good will and enquiries.

14 GETTING STARTED IN CARE - ADVISER GUIDE SECTION 2: LEAD GENERATION SECTION 2: LEAD GENERATION Care homes Care is usually segmented into a number of levels of requirement from low needs that can be provided either in the home or in sheltered accommodation, through to high needs in either nursing homes or specialist homes that can deal with complicated requirements. Finding the right care home is therefore a very important factor to ensure the most suitable help and assistance for the person's needs. It can be a very emotional decision for some clients with the realisation that they are no longer able to look after themselves or their loved ones and that an element of their own independence is to be given away. As such, sometimes when deciding upon the correct level or location of Care, things that would normally form part of the decision process can be overlooked. A number of charities, Government organisations and consumer groups offer support and guidance to ensure that clients are able to consider all of the right factors in their final decision. Age UK offer several guides that can assist clients with the correct decision making and ensure that all relevant factors are taken into consideration. These guides can be accessed on the Age UK Website. The Care Quality Commission also offers some useful information regarding care homes, their general prices and the levels of service that can be provided. It can also be an insightful source of research prior to choosing a shortlist for your clients to review. There are also care homes for those who require extra Care and support, often due to dementia in some form. The Alzheimer s Society can give advice to people with dementia and their carers and family on what to look for in a care home. It also gives information on suitable homes. The importance of funding a care home properly The fear of making the wrong decision when dealing with large sums of money, especially when dealing with large sums of someone else s money in the case of Power of Attorney, can be a daunting responsibility. Outlining the implications of not providing a specific Care funding solution can often be the catalyst to getting a full and rounded decision. The cost of Care can, and often does, quickly erode assets to a position where ongoing servicing of costs become challenging. Although when assets go below certain levels and more State assistance can be obtained, it means that the assets first need to drop to these levels. Other funding implications will also arise when assets have become this low. It is not uncommon that when assets fall to a certain level and current funding becomes untenable that care homes are forced to consider alternative accommodation options to match the levels of funding available. Examples of this are having to move the Care recipient to a different room which is either smaller, a lower cost room or even to a shared room or shared facilities. In extreme cases that can also lead to care homes being unable to provide any accommodation at all at the level of Care funding available which could lead to re-housing to another care home facility. Any such change can be a traumatic experience for both the individual needing Care and the family involved.

15 For Financial Adviser use only not for retail clients SECTION 3: THE CARE ADVICE PROCESS

16 GETTING STARTED IN CARE - ADVISER GUIDE SECTION 3: THE CARE ADVICE PROCESS SECTION 3: THE CARE ADVICE PROCESS An interesting and unique part of providing Care market advice is its close involvement with the State and local Government benefits system. A core part of the process of providing advice within the Care space is to ensure that all of the State benefits for which the recipient of Care is eligible, are being claimed. Therefore it is vital that advisers are aware of how the Care funding advice journey interacts with the various State benefits and the optimal order in which to consider them. The Care advice process outlined is intended to give a framework to the various state benefits, as well as the funding options available and the consequences of the choices your client makes. Whether your client will be fully funding or part funding, the need for qualified financial advice is essential to establish the most suitable funding methods so that the person needing Care doesn t run out of funds. Does their health situation allow for full State funding? e.g. NHS Continuing Healthcare Does mental capacity allow full State funding? e.g. under section 117 aftercare services within the Mental Health Act 1983 Or partial State funding? e.g. NHS Funded Nursing Care A full Care assessment under Section 9 of the Care Act by the client s local authority should be carried out. This assessment can include contributions from all the health and social care professionals involved, to build an overall picture of need. In some cases this would have already been completed and the client would therefore have an idea of their assessed needs and their likely costs. Everyone is entitled to a care needs assessment regardless of their means. However, this assessment may not always have been completed, in which event one should be arranged before proceeding with any advice. It can often be the case that not all benefits are being claimed. The review alone can pay for itself, when unclaimed benefits are identified and obtained.

17 GETTING STARTED IN CARE - ADVISER GUIDE SECTION 3: THE CARE ADVICE PROCESS SECTION 3: THE CARE ADVICE PROCESS The Care Advice Process The advice process can also highlight the ongoing changes in Care costs and the implications of running out of funds. 1. Care Needs Arise: Ensure a Care assessment under Section 9 of the Care Act is carried out to establish the level of Care required. This also includes cases where the primary need is nursing care whether a qualification for 'NHS Continuing Healthcare' in which the responsibility of Care rests with the NHS and not the individual. 2. The individual: A local authority financial assessment will identify if any State funding is available by looking at the assets and income of the individual. 3. Initial Meeting: If it is established that there is a genuine need for the individual to go into Care then the 12 week property disregard may come into play. Other assets will be assessed in the usual way. 4. Request a Quote: Complete the Care Fees Plan Questionnaire and other applications for any other products you consider are required. 5. Collect Medical Information: The application form declarations give us permission to request Reports from the potential Care customer's GP as well as their care provider. These Reports and the application form give us the information for full medical underwriting. 6. Recommendation: Any report based on the fact find should analyse various methods of Care funding as well as outline the advantages and disadvantages of each method based on the attitude to risk and personal circumstances of the individual. 7. Customer Decision: Customer accepts the recommendations and signs Acceptance documentation. Care Needs Arise The Individual Initial Meeting Request a Quote Collect Medical Information Recommendation Customer Decision Future Advice Needs 8. Future Advice Needs: Ensure all ancillary factors are taken care of or considered where applicable: Power of Attorney, will writing, Care fees capping, areas of support for the individual or family (charities or other organisations), or any further financial requirements.

18 GETTING STARTED IN CARE - ADVISER GUIDE SECTION 3: THE CARE ADVICE PROCESS SECTION 3: THE CARE ADVICE PROCESS The Care Funding Journey Process Gathering client data Initial enquiry and fact find Complete planning questionnaire/fact find Conduct initial research Investigate potential solutions Consider State benefits and Care costs Refer to charging guidelines if appropriate Complete fact find report Summarise understanding of situation Include if appropriate: - Case studies - Guide to funding Care - Power of Attorney factsheet Obtain bespoke quotes for Care Plan Complete medical questionnaire and send to the administrator The administrator obtains medical reports on Partnership's behalf - Finding a care home factsheet Complete and issue suitability report Arrange meeting or call to discuss the recommendations Final planning solution agreed with customer Contact product providers to action products agreed with the client Complete outstanding documentation Proof of Age Proof of Name Identity Verification for annuitant and anyone else named on the cheque/payments Funds Acceptance page signed Care providers declaration Product completion Policy documents issued Contact client to go through policy documentation Post sale activity Estate planning Family financial planning requirement Financial advice on wider portfolio IHT mitigation Will writing Regular review of changes to Care need

19 GETTING STARTED IN CARE - ADVISER GUIDE SECTION 3: THE CARE ADVICE PROCESS SECTION 3: THE CARE ADVICE PROCESS Local Authority Assessments A local authority assessment of both Care needs and client finances will be needed before you will know how much the shortfall in income may be. The Care Needs Assessment As processes vary depending on where the client lives, you should ask the local authority for a written guide on its assessment procedure or you can read about it on their website. Generally speaking, a social worker from the local authority adult social services will visit the client at home to review their individual Care needs. It s a good idea for a friend or relative to be present during the assessment so they can assist or provide further support or information for the person needing Care. The assessor will then write a report on the client s Care needs, which will explain the type of Care that would suit best, including any special requirements. The report would not only include physical needs, but psychological, social and cultural needs will be considered too. Once the client s Care needs assessment has been completed, the local authority will decide what Care services it can provide or arrange for the client to meet the identified needs. This decision is made by comparing the individual s Care needs with the set eligibility criteria for community Care services. The needs have to be assessed at a relatively high level to be eligible for any local authority support. The eligibility criteria are set nationally, but community care services may vary depending on what can be afforded by the local authority. One of the outcomes of the assessment may be qualification for NHS Continuing Healthcare, where the primary need of the individual is healthcare. Funding for this comes from the NHS and not the local authority. Under the Care Act 2014, the criteria have been standardised in order to make the assessment outcomes more transferable between local authorities. In Wales, information on health and social care is available on: In Scotland, information on health and social care is available on: Social-Care/Financial-Help In Northern Ireland, health and social care assessments are carried out by the local trust. The nearest trust can be found by searching on the nidirect website: The Financial Assessment State assistance with the cost of social care is means-tested primarily by imposing upper and lower capital limits on the value of a person s savings, property and other assets. Some assets can be disregarded in certain circumstances. In England, for example, if an individual s assets including any property have a total value of less than 14,250, Care costs will be paid in full by the local authority, although they may expect a contribution if certain benefits or any income are being received by that individual. If personal assets exceed 23,250, an individual will normally be expected to pay for their own Care in full. Different upper and lower capital limits apply in Scotland, Wales and Northern Ireland. A reducing scale of support applies between 14,250 and 23,250, based on the person contributing 1 a week for every 250 in assets over 14,250. So, someone with assets of 18,000 would be expected to contribute 15 a week ( 3, x 1 = 15) towards Care.

20 GETTING STARTED IN CARE - ADVISER GUIDE SECTION 3: THE CARE ADVICE PROCESS SECTION 3: THE CARE ADVICE PROCESS Local authority means-testing will look to include most capital and savings held in an individual s name, including: Bank and building society accounts National savings and premium bonds Stocks, shares and investment products Income from State, personal and occupational pensions Property and land (less any mortgage) Some assets are disregarded by the means-test, including: Value of life policies/annuities Some compensation payments held in trust or by the courts Some investment bonds with a life assurance element (check with provider) Property that continues to be inhabited by a partner, dependant or certain other parties Finding out what benefits are available to clients can be quite a time consuming event and requires an up to date, good working knowledge of the application process. There are various organisations to turn to for help and assistance in this area. The Government have a web based benefits calculator which can be used to estimate what benefits may be available and the amount that may be claimed. It is only a calculator and the client would still have to go through the application process to establish what exactly they would qualify for. The calculator can be found here: Further guidance on financial assessments can be made on the Money Advice Service website including how to challenge decisions if the client feels that the decision that has been made is unfair. For information on income-related benefits, Universal Credit, tax credits, contribution-based benefits, Council Tax Reduction and Carer s Allowance use this link. The charity Age UK also offers guidance and advice on completing the Attendance Allowance application process which may make the process easier and quicker for you and your clients. State Benefits Part of the process of providing advice within the Care space is to ensure all of the State provided benefits are being claimed. It can often be the case that not all benefits are being claimed which could mean that even this review alone can pay for itself if previously unclaimed benefits are identified and claims are processed. The advice process also can highlight the ongoing changes in Care costs and the implications of running out of funds. Attendance Allowance A non means-tested, tax-free benefit for over-65s needing help with basic functions such as bathing or eating whether at home or in Care. There are two rates; higher for Care around the clock and lower for part-time assistance. The 2017/18 weekly rates are lower rate and higher rate. Personal Care (Scotland only) As well as receiving a contribution towards nursing Care, self-funders in care homes in Scotland can also receive a weekly payment towards their personal Care currently 171. If a resident receives Personal Care, they are no longer eligible to receive Attendance Allowance. Click for more info > Age UK Benefit Calculator

21 GETTING STARTED IN CARE - ADVISER GUIDE SECTION 3: THE CARE ADVICE PROCESS SECTION 3: THE CARE ADVICE PROCESS Personal Expense Allowance Individuals who have their Care fees paid by the State are allowed to keep a small allowance from their pensions for their own personal use. This Personal Expense Allowance is currently per week ( in Wales). The process for claiming State benefits can be confusing, so support is available from several charities that have considerable experience in the documents and associated processes. Age UK will assist with the completion of benefits applications here. Receipt of means-tested benefits will be affected by the income from a Partnership Care Plan because having one will increase the total income available to the claimant. NHS Continuing Healthcare When advising clients and their families on the options for funding Care, it should first be established whether the individual that requires Care should be paying for it themselves. Advisers should always consider the possibility of whether the NHS should be funding the persons Care through NHS Continuing Healthcare. This can make a huge difference to the financial position of the individual as it may mean the NHS could cover the full cost of their Care, potentially some 800 per week or even substantially more. NHS Continuing Healthcare covers the cost of Care for those whose primary need for Care relates to their health. However, for most people requiring Care, NHS Continuing Healthcare will not be appropriate as there is quite a strict assessment process that they have to go through to ascertain if they meet the eligibility criteria. According to market analysts Laing and Buisson, the number of older and physically disabled residents in care homes funded by the NHS is about 10%. However, it is something that should always be considered by advisers, if only to discount it as a means of funding. So what is NHS Continuing Healthcare? NHS Continuing Healthcare is a package of continuing care provided outside of a hospital, arranged and funded solely by the NHS, for people with ongoing healthcare needs. It can be provided in any setting, including the home. To meet the criteria and qualify, clients are likely to have a complex medical condition that requires a lot of Care and support, to need highly specialised nursing support and possibly be near the end of life, with a rapidly deteriorating condition. It does not depend on a specific health condition or diagnosis. The first step is to have Care needs assessed by a health or social care professional using a screening tool called the Checklist Tool. If this screening suggests that they may be eligible for NHS Continuing Healthcare, a full up-to-date assessment of needs will be arranged, using a tool called the Decision Support Tool. The full assessment will be carried out by a multidisciplinary team. The assessment will include contributions from all the health and social care professionals involved, building an overall picture of need. The multidisciplinary team will make a recommendation to the CCG about eligibility for NHS Continuing Healthcare.

22 GETTING STARTED IN CARE - ADVISER GUIDE SECTION 3: THE CARE ADVICE PROCESS SECTION 3: THE CARE ADVICE PROCESS NHS Funded Nursing Care It may be that Care in a nursing home is required but the eligibility criteria for Continuing Healthcare has not been met. In this case there may be entitlement to the payment for NHS Funded Nursing Care sometimes referred to as the Registered Nursing Care Contribution or RNCC. NHS Funded Nursing Care is Care provided by a registered nurse, paid by the NHS, for people who live in a care home. People should receive NHS Funded Nursing Care if: They live in a care home registered to provide nursing care, and They don t qualify for NHS Continuing Healthcare but have been assessed as needing Care from a registered nurse The NHS will make a payment directly to the care home to fund Care from registered nurses who are usually employed by the care home. Ensure the Care provider has explained how the NHS funding will be accounted for within their fee charging structure. Other options if not qualifying for NHS Continuing Healthcare For many elderly people funding their own Care, there are issues with cognitive ability. If there are issues with cognitive impairment, are they related to a diagnosis of dementia? There are many types of dementia, but Alzheimer s is the one that most people are aware of. Many of those, even some severe forms of dementia, do not qualify or meet the criteria for NHS Continuing Healthcare. However, there are other avenues open to those who are funding Care themselves as a result of severe dementia but who do not qualify for fully funded NHS Continuing Healthcare. Under the Mental Health Act 1983 if you are compulsorily detained under section 3, i.e. you are sectioned as it is known, then after care services under section 117 must be provided free of charge, with no means-testing. Section 117 aftercare means if a patient needs to move from hospital to a care home, their care home fees must be paid for. For those admitted under section 3, their illness must cause them to pose a risk to their own health or safety, or that of others. This is not the easiest of subjects to raise with a family of an elderly person requiring Care and it is not a simple and straightforward process to get sectioned. There is also still a stigma attached to being sectioned so families may not be keen for it happen to someone very close to them. Nevertheless it should be covered as a potential source for funding if dealing with a case involving dementia, especially if it is a severe form. 12 week property disregard When permanent residential care is needed, the first 12 weeks can be funded by the local authority if your client meets the eligibility criteria. This is known as the 12 week property disregard.

23 For Financial Adviser use only not for retail clients SECTION 4: POWER OF ATTORNEY AND MENTAL CAPACITY

24 GETTING STARTED IN CARE - ADVISER GUIDE SECTION 4: POWER OF ATTORNEY AND MENTAL CAPACITY SECTION 4: POWER OF ATTORNEY AND MENTAL CAPACITY A third party may make decisions on a person s behalf if they have been granted the legal power to do so. Power of Attorney is the title given to people who are appointed to manage the finances and property of another person, or make health and welfare decisions for them, if the person is unable to do so themselves. The person granting the power is called the donor and the person to whom the power to act is given is called the donee/attorney. For simplicity, the donee/attorney is referred to as 'Attorney' throughout this section. Never allow a client to assume a person will be able to act for them simply because they are an immediate family member. Under the Mental Capacity Act 2005, an individual must have mental capacity to make important decisions, including entering into an insurance contract. For any person considering a Care Plan, it is essential to consider putting a Power of Attorney in place if one does not already exist. Even if one exists, it s worth checking what it does and doesn t cover as the donor is able to place restrictions on which decisions can be made by whom and when. Without holding Power of Attorney, even close family members may not have the authority to make decisions on behalf of the person regarding their financial assets should they lack capacity to do so for themselves. The Mental Capacity Act has been in place since October It aims to protect people aged 16 and over who may not be able to make certain decisions for themselves and to empower them to make their own decisions when possible. Changes brought into effect in October 2007 under the Act extended the circumstances in which people can arrange for someone else to make decisions on their behalf if they are no longer able to do so themselves. Before October 2007, a Power of Attorney could only be set up to cover financial affairs; now a client can give someone authority to make decisions relating to their health and personal welfare as well. The Mental Capacity Act sets out the legal test to decide whether someone lacks the mental capacity to make a particular decision or express their views. This includes the inability of a person to: Understand information given to them Retain that information long enough to make a decision Weigh information to make a decision Communicate their decision via all possible means It also establishes the following principles about mental capacity: A presumption of capacity every adult has the right to make his or her own decisions and must be assumed to have capacity to do so unless it is proved otherwise The right to be supported to make their own decisions all practical steps must be taken to help a person make their own decision before anyone concludes that they are unable to do so The right to make eccentric or unwise decisions a person is not to be treated as being unable to make a decision simply because the decision they make is seen as unwise Best interests any decision made or action taken on behalf of people without capacity must be made in their best interests Least restrictive intervention anyone making a decision for, or on behalf of a person without capacity, should consider all effective alternatives and choose the one that is the least restrictive of the person s basic rights and freedoms People who hold Power of Attorney must apply these principles when making decisions on the other person s behalf.

25 GETTING STARTED IN CARE - ADVISER GUIDE SECTION 4: POWER OF ATTORNEY AND MENTAL CAPACITY SECTION 4: POWER OF ATTORNEY AND MENTAL CAPACITY An Attorney s Responsibilities When a person is appointed as an attorney, they are placed in a position of trust and must act in the best interests of the donor, using the donor s money to meet their best interests. An attorney can only do the things the donor has authorised them to do, and cannot delegate any duties unless the donor has authorised delegation. An attorney must keep separate up-to-date accounts of the donor's affairs. When acting on the donor's behalf and signing any documents, the attorney should sign their usual signature and add beneath the signature, the words Attorney for... (donor's name). Types of Power of Attorneys (England and Wales) There are different types of Power of Attorney in the UK, each giving different powers to manage the affairs of someone who is physically or mentally incapacitated. Authority may be granted by the donor should mental capacity exist or be assigned by the Court of Protection when the individual already lacks mental capacity. Ordinary Power of Attorney An Ordinary Power of Attorney may be general in scope or limited to a particular purpose. It does not need to be registered but is only valid while the donor has mental capacity e.g. its validity ceases immediately upon diagnosis of mental incapacity. If this happens, the attorney must apply to the Court of Protection for permission to manage the affairs of the donor under the Mental Health Act Enduring Power of Attorney An Enduring Power of Attorney is a specific type of Power of Attorney which was issued before 1 October As with Ordinary Power of Attorneys, an Enduring Power of Attorney may be general or limited in scope but unlike Ordinary Power of Attorneys, once an Enduring Power of Attorney is registered, it remains valid even if the donor subsequently loses mental capacity. An Enduring Power of Attorney must be registered with the Office of the Public Guardian if the attorney has reason to believe that the donor is, or is becoming, mentally incapable for it to remain valid. Enduring Power of Attorneys only cover decisions relating to property and financial affairs and do not cover welfare related issues. Lasting Power of Attorney Lasting Power of Attorneys replaced Enduring Power of Attorneys on 1 October The donor must have mental capacity to grant a Lasting Power of Attorney and they remain valid upon diagnosis of mental incapacity. However, an attorney may only act under a Lasting Power of Attorney if it has been registered with the Office of the Public Guardian. A Lasting Power of Attorney should be registered as soon as it is created (rather than when the donor loses mental capacity). Types of Lasting Power of Attorney There are two types of Lasting Power of Attorney that can be arranged: 1. Property and Financial Affairs Lasting Power of Attorney: enables the donee/attorney to make decisions on how money is managed and how property and other financial affairs are handled. 2. Health and Welfare Lasting Power of Attorney: covers healthcare and welfare, including medical treatment, and where the donor lives. It can give the attorney power to refuse or consent to treatment on the donor s behalf.