Category Archives: Care Fee Debate

Care Fees Cap

Care Fees Cap – Labours View:

Our view‎

Cameron’s elderly care costs con

  • Pensioners face paying £150,000 for their residential care before they hit the so-called ‘cap’ on care costs new analysis published by Labour today shows.

    The average figure to be funded by pensioners is more than double the £72,000 which ministers have claimed.

    Labour’s analysis also reveals that six out of seven elderly people will have died before they reach the ‘cap’.

    Liz Kendall MP

    Liz Kendall MP

    The Government’s proposals were branded a ‘con’ by Labour’s Shadow Minister for Care and Older People, Liz Kendall. “Families deserve to be told the facts”, she added.

    The ‘cap’ will be based on the standard rate local authorities pay for a bed in a care home in their area, not the actual amount self-funders are charged – which is much higher than the council rate.

    In 2016/17- when the ‘cap’ is due to start- the average council rate for residential care is estimated to be £522 a week, but the average price of a care home bed will be £610 a week, and hundreds of pounds more in many areas. The difference between the council rate and what pensioners actually pay won’t count towards the ‘cap’.

    Pensioners in care homes will also have to pay £230 a week for their ‘hotel and accommodation’ costs, which are counted separately from care costs, and which won’t count towards the ‘cap’.

    When both these factors are taken into account, it will take almost 5 years for elderly people to hit the so-called cap- during which time they will have clocked up more than £150,000 for their actual residential care home bill.

    Liz Kendall MP, Labour’s Shadow Minister for Care and Older People, said:

    “David Cameron has repeatedly claimed that no-one will have to pay more than £72,000 to pay for their care, but this simply isn’t the case.

    “On average, pensioners will have to pay more than twice this amount, and the vast majority will have died before they hit the so-called ‘cap’.

    “David Cameron should be straight with elderly people about what they will really have to pay for their care. Families deserve to be told the facts, rather than being conned, so they can properly plan for the future, and not have the Government attempt to pull the wool over their eyes.”

     

Care Bill 2013 Charging

Care Bill – It’s a Rip Off.

Recent articles on the new Care Charge Cap:

http://www.bbc.co.uk/news/health-24923879

Elderly ‘conned’ into paying £150k for care before new government .. Express

6 out of 7 pensioners will die before reaching care cap, says Labour  Inside Housing

The Care Bill is designed as a cynical PR smoke and mirrors exercise to make more people lose pretty much everything to pay care fees.   But they promise not to sell your house until you are dead, by which time the interest charged by the Local Authority will probably have wiped out any chance of your family inheriting anything but the brass farthing down the back of the sofa.   The rich can avoid Inheritance Tax, but the rest of us stand a 50/50 chance of being disinherited by Community Care Tax.   And the Care Bill will make that far worse…..

But here is the official version:

What is the charging process?

Care and support is not a free service like the NHS. People have always had to pay something towards the cost of their care and support.

Whilst some types of care and support are provided free (for instance, information and advice), many types will be subject to a charge.

People will only be asked to pay what they can afford. Sometimes the person will pay the full cost, or sometimes the cost will be shared between the person and their local authority.

To decide what a person can afford to pay, a local authority will carry out a financial assessment. The local authority will consider the person’s income, and any assets they own, like investments or a house. The local authority will then calculate how much the person can afford to pay towards their care and support costs.

Sometimes a home-owner may want to consider a deferred payment agreement with the local authority. This is an arrangement whereby the person does not have to sell their home, during their lifetime, to afford the costs of their care. Instead, the local authority pays a larger share of the costs at first. The money that the person owes for their care is then collected from the sale of their property at a later date.

Why does the Government need to change the law?

The rules on charging for care and support have developed piecemeal since 1948. As a result, the current law is hard to follow.

There are currently different systems for charging depending upon what type of care and support is received. For example, the charging arrangements are different for care in a care home, to care that is given to people in their own home. This makes the system confusing, and potentially unfair as it treats people differently, based only on the type of care they receive.

What does the Bill do?

The new law for adult care and support will set out a clearer approach to charging. It will help people to understand what they have to contribute towards their care and support costs.

First, a local authority will assess someone and decide whether the adult has “eligible” needs.

The local authority will then think about what type of care and support that person needs.

Local authorities will not be able to charge people for some types of services, which will be set out in rules called regulations. The Bill allows local authorities to charge a person for any other type of care and support.

If the local authority thinks that the person needs a type of care and support for which there is a charge, it must decide whether or not they can afford to pay. After the financial assessment, the local authority will tell the person whether they need to pay for all, some or none of their care costs. The financial assessment rules will be set out in regulations, so that everyone will have their finances assessed in the same way. When an adult does not pay the full amount, but contributes towards their care and support costs, the regulations will say how much money they must be left with after the local authority has charged them.

The Care Bill 2013

The Care Bill 2013

Government’s Care Bill to give people peace of mind in hospital, care homes and their own homes

Swift action following Francis report and epic changes to care laws.

People will be treated more compassionately in hospital, see their care better joined up and be reassured that they will not have to pay astronomical care costs if they need to go into a care home in their old age, thanks to measures set out in the Care Bill, published today in Parliament.The Care Bill will help drive up quality of care following the findings of the Francis Inquiry into events at Mid-Staffordshire NHS Foundation Trust. It will also include improvements to the care system following an extensive consultation with people and organisations right across the health and care system – from users of services to providers of care. The Bill will create a single modern law that replaces more than a dozen pieces of legislation dating back to the post-war period.

Through the Care Bill, the Government is introducing laws that will:

  • Help people get compassionate care in hospital, in a care home or in the community, by introducing Ofsted-style ratings for hospitals and care homes, making quality as important as finance and strengthening training for staff.
  • Join up care by enshrining in law that everyone should have a personal care plan, access to a personal budget and that carers, for the first time, will have a right to get support themselves if they are found to have eligible needs. There will also be a national minimum eligibility threshold across the country.
  • Reform the funding of care so no one will have to sell their home in their lifetime, or lose everything they’ve worked for, to pay for the costs of living in a care home. And a cap on care costs and financial support for more people will protect people from catastrophic costs and provide important peace of mind.

Health Secretary Jeremy Hunt said:
“We have swiftly brought in measures to address the findings of Robert Francis’ report that will improve care and mean that patients will be treated with more compassion and respect. I strongly believe that Ofsted-style ratings, improved training for staff and making quality as important as finance will improve NHS care.”

“These changes go hand in hand with our epic changes to care legislation that will mean, for the first time, people will not have to fear losing their homes in their lifetime to pay care home fees and everyone with a care plan will be able to have a personal budget to choose how they are cared for.”

“Importantly, if someone receives care in the south but wants to move to the north to be closer to their family, they will be able to do so without fear of losing their care.”

Care Services Minister Norman Lamb said:
“For the first time in a generation we are addressing the pressing need to support people when they reach crisis point and need help most. People will finally be able to plan for their later years and not have to fear being saddled with catastrophic costs to pay for care.”

“This, coupled with the new national eligibility criteria, security that our care is not lost if we move to a different part of the country and giving everyone who is eligible access to a personal budget, will greatly improve the outlook for later life.”

Elements of the Bill that respond to the Government’s Caring for our future White Paper last year include:

  • A new legal right for everyone with a care and support plan (or support plan) to have a personal budget, which they can receive as a direct payment if they wish to. This gives people more control and the ability to tailor the services they receive to their requirements and preferences.
  • No-one’s care and support is interrupted if they move to a different local authority area, for example, if they want to live closer to family or change jobs.
  • For the first time, carers will have a right to receive support themselves if they are found to have eligible needs.
  • The person will be involved in the assessment process that determines what care and support needs they have, and this process will focus on the needs of the individual and on the outcomes they wish to achieve.
  • National eligibility criteria will mean a fairer and clearer system, and help people understand whether they might be eligible for access to ongoing care and support.
  • A new focus on people’s wellbeing will see more done to keep people well. This will include a more all-encompassing assessment process that considers a person’s capabilities and what they can achieve themselves, as well as considering what other support might be available from family, friends or in the community. This will help to delay or prevent people from developing serious care and support needs, rather than the current system which often only intervenes in a crisis, and will mean than people’s specific needs at different times in their life will be better supported.
  • No-one will have to sell their home in their lifetime, or lose everything they’ve worked for, to pay for the costs of living in a care home later in life. A cap on reasonable care costs and financial support for more people with their costs will protect people from catastrophic costs and provide important peace of mind. As our population ages this is more important.

Elements of the Bill that respond to Robert Francis QC’s report include measures that:

  • Underpin the new ratings regime for hospitals. Francis highlighted the need for a single, shared version of the truth about quality. This Bill will give CQC the legal powers it needs to set up, design and get on with the new ratings system, without any political interference.
  • Ensure quality is as important as finances. The Bill will give Monitor clear authority to intervene where the Chief Inspector exposes problems with the quality of care. The Care Quality Commission will also be given a power to require Monitor to put a Foundation Trust into administration if it becomes clinically unsustainable (currently Monitor can only do this on financial grounds).
  • Give the CQC stronger powers to expose poor care. At the moment, the CQC can only take action where a hospital is failing to comply with one of its set standards. This can be bureaucratic. The Bill will give the Care Quality Commission broader powers to act if it spots poor care that requires significant improvement.
  • Introduce a new criminal offence on providers who supply false or misleading information. The Bill will make it a criminal offence for care providers to give false or misleading information. We will limit the offence to providers of NHS secondary care (NHS Trusts, FTs and independent providers of NHS secondary care) and to certain types of information such as mortality rates.

The Bill will also:

  • Strengthen training and education. The Bill will set up Health Education England legally as the first ever non-departmental public body responsible for training and education for NHS staff, giving the NHS workforce unprecedented focus and support.
  • Strengthen research regulation. The Bill will set up the Health Research Authority legally as a non-departmental public body, so it can act independently to regulate the research sector and protect people who take part in research or are thinking about taking part. This will help build a vibrant research sector that is safe and ethical.

Notes

1.The Care Bill can be found here .

2.Proposals to grant social workers new rights to enter homes where abuse is suspected will not proceed after a Government consultation resulted in mixed opinions over the case for such a power. The responses did not show a compelling enough case to legislate for a new power of entry. It is a sensitive and complex issue, which is why the Government consulted extensively on it. However Councils and the police already have significant powers of intervention in safeguarding cases.

Care Bill

The government has today published the long awaited Care Bill aimed at bringing together more than a dozen separate pieces of legislation into one single law and addressing the issues of those having to sell their homes to pay for care, to better integrate care services, and drive up standards.

Tim Pethick, Managing Director of Saga Magazine said “Needing care is simply something that many people in the UK don’t make plans for, but when someone’s health deteriorates it’s often a crisis decision to try and get help and find a way to pay for it.  The measures outlined in today’s care bill do, at least, give some reassurance to those that have worked hard throughout their lives to save and purchase their own properties that they won’t be punished for the austerity by having their assets eroded to pay for care.

“We also welcome the fact that any increases to the cap will be linked to average earnings, as opposed to the higher measure of inflation, so whilst the finish line (the cap) will move further away, the gap will continually be narrowing.

“In addition, the Care bill will be welcomed by many family carers that, at last, feel they have had their invaluable roles supported by government by giving them further rights to seek help and support.”

However, whilst many measures in the new Care bill will be welcomed, it comes at a cost, and one that many local authorities are struggling to support.

Tim Pethick continues “With an aging population, getting this right is a must for any party, but how we pay for it will always be a political hot potato.  Publishing this bill will bring welcome relief to many, but until it’s clarified in the summer’s spending review how these increased measures will be implemented, many will fear that the eligibility levels will just be increased to ‘rob Peter to pay Paul’!”

Care Costs Advice

Care Costs Advice – where to go?

Financial advisers and the Internet are the fastest growing avenues for those seeking advice about the costs of elderly care says a recent report.

Stephen Pett, of Legacy Trusts says “It is frightening to note from this report that almost nine in ten people seek care costs advice from people who are very restricted in the advice they can give.   Make no mistake, holistic financial planning advice taken very early is key to successful care fee planning and leaving something behind for future generations – or not.”

The finding comes from leading care annuity provider Partnership, whose second annual care index compares attitudes towards the cost of long term care across the UK year on year.

The 2012 care index suggested that only 7% per cent of people would seek advice from an IFA and 3% would turn to the Internet as their primary source of information. However, the 2013 survey has shown an increase, with 15% of respondents now claiming they would seek advice from an IFA and 22% would use the Internet.

If you needed to go into residential long-term care, where would you go for advice on how to fund the cost of it?

The findings also suggest that local authorities are now the most likely place for people to turn to for advice on funding their long term care which could be a big opportunity for financial advisers. The Government’s recent proposals to reform the social care system in England include a duty on local authorities to provide information and advice to everyone, including self-funders.

As part of this duty, Partnership has been campaigning for local authorities to refer self-funders to regulated financial advice to ensure that they are aware of all available options to fund their care needs and minimise the risk of depleting their assets.

Chris Horlick, Managing Director of Care, at Partnership, said; “57% of people in the Care system are funding some or all of their care costs, yet this research shows that only 15% would consider contacting an Independent Financial Adviser.”

“While it is encouraging that over the last year there has been an 8% growth in awareness about IFAs being best placed to offer advice on long-term care funding, people are still seeking advice from other arguably less holistic sources”

“This lack of awareness among consumers about where they can go to get appropriately qualified financial advice is worrying as it means that they might purchase the wrong financial product to fund their care fees or none at all. With an estimated 25% of all self-funders running out of money and falling back on the state, this has significant implications for both consumers and the Government.”

Care costs advice

UK children below the poverty line

Most UK children below the poverty line by 2015

Grandparents can take steps now to protect their grandchildren and great grandchildren from joining the majority of UK children below the poverty line.  Not a quick fix, but reviewing the information on the Home Protection Plan could make all the difference for future generations.

Here is the TUCs Press Release on the subject of UK children below the poverty line:

Government welfare and tax changes, together with lower than forecast wage growth, will leave the majority of children in the UK living in families below the poverty line by 2015, according to new TUC research published ahead of its A Future For Families rally in central London later today.

Tax and welfare reforms alone – both existing and future changes – will be responsible for nearly half a million more children living below the breadline, says the TUC.

A Bleak Future For Families – a TUC report based on analysis by Howard Reed of Landman Economics – examines the current and future impact of various benefit and welfare changes, including Universal Credit, direct and indirect tax changes and real wage growth since 2010 on the incomes of different households and family types.

The research finds that the cumulative impact of government policies and slower than forecast wage growth over the course of this parliament will mean that 690,000 more children will be living below the minimum income standard – the level of income needed to achieve a minimum acceptable standard of living in the UK – by 2015.

Minimum income standards (MIS), widely accepted and established by the Joseph Rowntree Foundation in 2008, vary by family type. For example, the current MIS for a single pensioner is £12,623, rising to £23,992 for a single parent with two children and £24,643 for a couple with one child.

Tax and welfare changes, including tax credit cuts, the VAT rise and the increase in the personal allowance, will have the biggest net impact in terms of increasing the number of children whose families are struggling to make ends meet – pushing 460,000 more children below the breadline by 2015.

Slower than initially forecast wage growth over the course of this parliament pushes another 170,000 below the minimum income standard, while the pay freeze and cap for public sector workers will see 80,000 more children falling into hardship.

When all these changes are taken into account, Universal Credit – the government’s flagship welfare scheme designed to tackle poverty and make work pay – will only lift 20,000 children above the MIS, says the research.

The research shows that an extra one million families will be living below the minimum income standard by 2015, compared to where they would have been under the policies and forecasts the government inherited in 2010. The majority (54.4 per cent) of children will be living below the MIS in two years time, says the TUC.

A Bleak Future For Families shows that nine in ten families will be worse off by 2015, with only the poorest ten per cent of households better off – and then only by a measly 57p a week. A middle income household will be nearly £1,200 a year worse off by 2015 – a 6.6 per cent cut in their income – with the biggest single loss as a result of tax credit cuts (-£505).

The research shows that while all bar the top ten per cent of households are net gainers as a result of changes to the personal allowance and the primary threshold for national insurance, all these gains are wiped out by the VAT rise in 2011. The poorest ten per cent of households gain just a penny a week from direct tax cuts but lose £3.38 by the VAT rise.

While the government has justified welfare cuts by saying that they target those out of work, working families are also hit hard by government austerity policies, says the research. Working lone parents are set to lose the equivalent of 8.2 per cent of their total income – far more than the median household loss of 6.6 per cent – mainly as result of tax credit cuts.

Households in Wales (-7.2 per cent) and Yorkshire and the Humber (-6.9 per cent) will suffer the sharpest loss in incomes. This is partly due to the higher than average concentration of public sector workers in these regions, who are facing the biggest real terms cut in their wage packets.

The research comes ahead of a TUC-organised rally in central London this evening, in which various union leaders and campaigners will urge the Chancellor to deliver a Budget next week that prioritises jobs, growth and families.

Speakers at the rally – which takes place at the Emmanuel Centre in Westminster between 6-8pm this evening – include TUC General Secretary Frances O’Grady, Shelter Chief Executive Campbell Robb, Child Poverty Action Group Chief Executive Alison Garnham and Deputy Leader of the Labour Party Harriet Harman MP.

TUC General Secretary Frances O’Grady said: ‘Families are suffering the tightest squeeze in their living standards in nearly a century. On top of wages that do not keep up with prices, government policies are making life even more miserable for millions of low to middle-income families through tax increases and cuts in benefits and tax credits.

‘By the 2015 election, the majority of children in Britain will be living below the breadline. For any civilised society, that should be shaming.

‘But while the Prime Minister says there is no alternative, the truth is that support is growing for a new approach. The Budget should start from recognising that what Britain faces is a growth, jobs and living standards crisis. Rather than targeting tax cuts at millionaires, cutting VAT would benefit everyone, and would help poorer households far more than raising the personal allowance.’

Interest-Only Mortgage of Over-65s “Average £43,000”

Our comment: “Thoughtful parents can avoid their children staying in this position by taking out a Home Protection Plan which can lend cash to pay off the mortgage without increasing Inheritance Tax Bills.”

 But on with the More 2 Life Press Release:

– More 2 Life urges FSA to make lenders issue warning letters to interest-only borrowers

– Interest Choice Plan customers can choose to pay interest and withdraw funds                                                            

Over-65s are paying off average interest-only mortgages of £43,000 outlining the scale of the interest-only time-bomb and the need for solutions, analysis of customer data by innovative equity release lender More 2 Life shows.

 

The lender is urging the Financial Services Authority – which is due to publish comprehensive research on the interest-only issue at the end of March – to force lenders to issue warning letters to customers.

 

It believes a system of Red, Amber and Green letters – modeled on the similar scheme for endowments – would help customers who do not have repayment plans to take action.

 

More 2 Life is making the call after customer analysis since launch found that more than four out of five customers taking out its Interest Choice Plan are using the money released to clear mortgage balances ahead of the fixed repayment date and switch to a lifetime mortgage without a fixed repayment date.

 

It found customers are taking out loan-to-value plans at an average of 22% despite being entitled to take a maximum average of 32%. The average amount released is £43,570.

 

Equity release lifetime mortgages enable customers to clear the capital owed ahead and to continue paying interest if they wish without having to sell their home or in extreme cases be repossessed.

 

Jon King, Managing Director of More 2 Life, said: “The interest-only time bomb is purely and simply about the looming repayment dates for mortgages. Customers can pay the interest but they need to find substantial sums to clear the capital borrowed.

 

“The concern is that people hope for the best which is why regular warning letters from lenders will help concentrate customers’ minds. Lenders themselves already acknowledge it is a major issue and many are concerned.

 

“The FSA’s report in March may provide more data on how many customers do not have repayment plans but currently nobody has a clear picture of the issue. Red, amber and green letters would help provide that clarity and help customers.”

 

More 2 Life’s own analysis shows up to 103,000 over-65 households are paying mortgages with around 81,000 households in the 65-74 age group and 22,000 in over-75 age groups. In total they spend around £1.36 billion a year.

 

Its Interest Choice Plan, which was designed in response to demand from equity release customers who are still working or need to clear interest-only mortgages enables customers to choose the level of interest they pay on loans and the term.

 

They can also fix their interest rate and have access to a lifetime drawdown facility.

Customers can choose to pay all or part of the monthly interest on their loan and choose how much to withdraw. Those who do not take the whole loan-to-value can make further withdrawals.

The interest rate of 6.08% monthly is fixed for life and interest payments are subject to a £25 minimum. Clients do not have to choose a term to pay the interest and can stop free of charge at any time. On further withdrawals rates are fixed on the rate applicable then.