POLICY BRIEFING Adult Social Care funding and eligibility criteria

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1 Adult Social Care funding and eligibility criteria Date: 23 May 2011 Author: Christine Heron, LGiU Associate Overview The Dilnot Commission on the Funding of Care and Support commissioned a study into the public s views concerning the future of funding for adult social care. Public engagement exploring care and support options identified the following views. Significant variation in individual s awareness of what care and support is and how it is currently funded. Strong support for a safety net for the poorest people and those with highest needs. No assumption that the family should take the burden of care, but flexibility and support for those who want to care for relatives. The threshold at which people have to start paying for their care at 23,250 is too low. Support for a cap on potential costs so people could have some protection for housing and other assets. The favoured approaches for planning for care were via pensions and insurance. The need for clear parameters and planning time both in advance and at point of need. The Dilnot commission is also understood to be likely to recommend an overhaul of fair access to care eligibility criteria when it publishes its final report in July. The second part of this briefing concerns a recent legal ruling opposing Birmingham Council s plans to raise eligibility threshold to critical on the grounds that it contravenes measures in the Disability Discrimination Act This is seen as having implications for all councils seeking to make savings by raising their level of access to services.

2 Briefing in full Public engagement exploring care and support options Background to the study The Dilnot Commission was established to provide independent recommendations to the government on how to achieve an affordable and sustainable funding system for care and support in England. The commission has ruled out both free care and an entirely individually funded system. It is examining a partnership model in which individuals and the state share responsibility for paying for care. The research was focused on how the public understands care and support, how they feel about a range of funding options, the equality concerns of different groups and what trade-offs people are willing to make in the balance of state and individual contributions. The research took a qualitative approach, engaging almost 200 people from a wide range of different groups in discussion, online activity and interviews. People were provided with structured information about the current issues in funding social care and options for future funding. Understanding and attitudes The study found that people have a general understanding of adult social care, but usually very limited specific knowledge. Those who do have a good understanding have had personal experience for themselves, friends or relatives. Social care was not a topic that was top of people s agenda, but once they got involved in the study nearly everyone became very interested in the issues. There was general confusion about the demarcation between the NHS and social care provision, particularly for long-term conditions, and also a lack of understanding about how social care was funded. The initial response to who should pay for care was generally the state, through general taxation, often due to a belief that this was how care was funded. People often felt that since they had paid into the system they should be looked after at no cost. When presented with information about social care, people s views about funding started to change as they understood more about demographic pressures and the costs involved. There was a strong agreement with the need for reform to create a fair and sustainable system. People became much more open to the concept of a partnership, although during the course of an interview some people sometimes returned to the view that the state should pay. Partnership Two main viewpoints emerged on the idea of partnership. The most commonly held view was that it was acceptable for individuals to make a contribution with the state taking the lead role. A less common view was that individuals have a responsibility to fund their own care with help from the state. Some expressed the view that it was a civic duty to pay into the system even if they got nothing back. A partnership approach was generally felt to be the fairest and most sustainable way of funding.

3 Overall, the term partnership was seen as off-putting and disingenuous, with the term individual contribution seen as reflecting the situation more accurately and likely to evoke feelings of responsibility. How the individual contribution should be managed The main debate about individual contributions was how the level would be decided, with general agreement that those who could afford it should pay more. It was also felt that everyone should make some contribution, including those on benefits, even if this was only a token amount. People found it more difficult when considering the relationship between payments and need. The relative importance of means and needs was something participants found it difficult to draw conclusion on and participants could often be seen as locked into an inner debate on this issue throughout the discussion. There was general agreement that the system should be progressive or tiered. The need for a safety net was seen as essential and should be designed to take account of both means and needs. No one should be left without care should they require it regardless of how much they had contributed. However, some participants sometimes expressed the view that those perceived as scrounging should either not be entitled to support or should receive it at a lower standard. Older people, and those with higher income tended to believe that means-testing could be unfair on people who had worked hard and accrued assets, and there was a strong view, including from lower income groups, that people who had saved should be able to pass an inheritance to their family, also that housing assets should not be taken into account. The current threshold for paying for residential care, 23,250, was seen as too low figure for the safety net people suggested a figure of around 50,000. Informal carers The role of informal carers was seen as important in the partnership. There was a strong sense that people did not want to burden their relatives with their care, that families should have no responsibility for funding their care and that those relatives who wanted to take a caring role should be supported to do so e.g. through increased carers allowance. People from Asian origins were more inclined to expect care from relatives because of cultural values and the fact that relatives could better meet cultural needs. However, overall it was felt that informal care was in decline. The balance of contributions People were asked to vote on their preference for the balance between individual and state. Three options were given. 1. Fixed proportion to be paid by the individual and the state. 2. The state pays the initial share (for instance 50K) with the remaining costs paid by the individual. 3. The individual pays the initial share (for instance 50K) with the remaining costs paid by the state.

4 People found it difficult to come to a conclusion on this generally torn between their personal situation and the impact on wider society. However, the final preferences were: 1. 19% - less popular because of no cap on costs and everyone would pay the same % - mainly popular with lower incomes people with high care needs might face high costs that they could not afford, and this option was also seen as having the potential for people to seek more help than they might have done, since the initial cost would be free % mainly popular with higher incomes the contribution would be capped and people know how much they would have to pay. Some involved also suggested hybrid models such as the state paying first and then the state and individual sharing costs. Planning and preparing Different groups had different views about how to funding individual contributions; for instance, higher income groups favoured protecting assets against prohibitive costs while lower income groups wished to protect their current lifestyle and to have free care for as long as possible. People were required to vote on their preferred options, and the outcomes were as follows: pensions 31% insurance policies 33% not planning taking a risk 13% saving 10% assets from homes 7% family 4%. State-led options were suggested including increased National Insurance or Pay As You Earn. People who recognised the need to plan for funding their care favoured insurance and pensions as the ways of doing this since they were seen as familiar mechanisms which allowed for forward-planning via manageable contributions rather than lumpsum contributions. The least favoured planning methods were releasing housing assets and relying on family, though some were prepared to consider these. A group of people preferred to take a risk about their future care, because they did not wish to or were unable to save, or because it was not a priority for them. Broadly speaking higher income groups tended to be more risk averse. Some people with higher incomes reported taking steps to avoid having to release their housing assets, such as setting up tenancies in common. Some lower income individuals indicated that in

5 a future system they would maximise their expenditure to make sure they fell within the safety net threshold. There were significant concerns about the integrity of financial products and the regulation of private providers was seen as essential. There was strong support for a compulsory or automatic element in which everyone was required to contribute. People wanted government to nudge behaviour for those who otherwise would not plan ahead. People spontaneously called for information, advice and direction from government, particularly unequivocal and clear communication of what is required in order to prompt action for those that wish to and can plan ahead. People were particularly concerned about shifting goalposts (e.g. changes to state pension age) and it was seen as essential that once developed the system should be stable. Other signals of direction from the Dilnot Commission Community Care magazine reports comments by Lord Warner, a member of the Dilnot Commission, who indicated that the Commission will recommend an overhaul of the two main eligibility frameworks fair access to care services and NHS continuing healthcare in order to provide more national consistency. The Law Commission report on adult social care law also recommended streamlining FACS and continuing healthcare. The Dilnot Commission also looks set to propose the retention of attendance allowance. Dilnot had told a community care conference that despite the arguments for moving the allowance into social care funding there were reasons for maintaining it as a way of providing support with extra costs at the beginning of the care journey. Lord Warner also indicated that the Commission will not call for a compulsory system of payments for individual contributions, such as social insurance or an estates tax, but will back a voluntary approach. The commission is due to report in early July. Judgment on eligibility criteria The High Court has ruled that Birmingham City Council acted unlawfully in its decision to raise eligibility criteria to critical from substantial or critical, thereby reducing social care provision. Birmingham was planning to raise the threshold in order to make savings required by reductions in central funding, but was also planning to increase the range of low level, early intervention support. The case was taken to court by four service users who would have lost services under the new threshold. The judge ruled that the plan was unlawful because it failed to comply with Section 49a of the Disability Discrimination Act (DDA) 1995 which sets out a general duty on public authorities to have regard to six measures relating to disabled people including addressing discrimination, promoting equality of opportunity and encouraging participation in daily life. Mr Justice Walker stated The consultation had not involved any attempt to look at the practical detail of what the move to critical only would entail. There was no analysis of how and to what extent any mitigation measures would be effective in addressing adverse impacts. In particular, there was no consideration of the extent to which alternative resources in

6 the community would be available for those with substantial needs, and no other steps to mitigate the impact on disabled people were identified. He indicated that public bodies have a duty to follow disability discrimination law even though this places significant and onerous obligations on local authorities. Following the judgement the council indicated it would revise its plans and undertake further consultation. Community Care reports that Director of Adults and Communities Peter Hay said that there was no new money as a result of the judgement and councillors would now need to consider how to fund adult social care in future. He indicated that the ruling set a very high standard for councils setting budgets. Previously, in his new role as incoming Adass president, he had stated that the current model for adult social care is unsustainable, and should be replaced by a new adult social care offer in which investment in prevention, reablement and better information and advice are provided alongside tightened eligibility criteria for assessed needs. The outcome of this case is likely to have implications for all councils, making it more difficult to restrict services to those with the highest levels of need in order to make savings, and potentially leaving those that have raised thresholds open to legal challenge. Comment The Dilnot Commission research has thrown up some interesting public perspectives, including support for compulsory planning for individual contributions which contradicts the Dilnot preference for voluntary measures. It also reveals a strong desire for fairness, but ambivalence about people s willingness to make a financial contribution. The task of the Commission remains complex and unenviable. Understanding the views of the public is a vital element in determining the future funding system, particularly from the political perspective of implementing changes. The research also throws light on peoples views which could be used from a local perspective for those making substantial changes to social care. As ever the greatest issue appears to be the low level of understanding of social care, how it operates and how it is funded. This is time consuming and expensive in terms of implementing consultation, but is also a key lesson for undertaking consultation that is thorough and robust. The legal challenge to Birmingham Council was brought to court on the basis of its consultation, but the judgement went well beyond criticising process. Rather it judged on the lack of any attempt to look at the practical detail of what the move to critical only would entail. While this briefing cannot provide a discussion of implications from a legal perspective, in terms of consultation it would seem to

7 involve much greater emphasis on the impact of the changes for individuals rather than their views on the change. Around 120 councils, 80%, have set their threshold at substantial/critical. It is likely that other councils will face legal challenge to raising eligibility criteria, significantly reducing the ability to make budgetary savings in a short time-span. The ruling throws up a further issue about the relationship between disability discrimination legislation and adult social care legislation and guidance. The Fair Access to Care Guidance revised in light of Putting People First in 2010 specifically refers to a previous legal challenge to applying the critical level of FACS on the basis of section 49a of the DDA. Again, from a non-legal perspective, it appears that the challenge will come to removing the types of care and support that go beyond what is crucial to keep people safe and healthy, to interventions to address involvement in social roles/work/education. Birmingham council had originally considered, then rejected, further limiting the critical band to the need for social care. The government is to respond to the Law Commission s report on reform to adult social care law at the same time as it considers the Dilnot Commission s report. The interface between the DDA and the role of eligibility criteria clearly needs to be addressed. For more information about this, or any other LGiU member briefing, please contact Janet Sillett, Briefings Manager, on janet.sillett@lgiu.org.uk