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EXECUTIVE SUMMARY
Deferred Payment Agreements were introduced in July 2002 under the Community Care and Health (Scotland) Act 2002. They were intended to extend the choice available to care home residents about how to fund their care. Deferred Payment Agreements ( DPAs) extend choice by offering residents the option to avoid selling their homes up-front to meet their care home fees by entering into a legal agreement to have part of their fees paid by their local authority and the balance settled from their estate.
Some local authorities, however, allow care home residents to defer care home fees, and avoid selling their home up-front, via the use of Charging Orders under section 23 of HASSASSA 1983 1. This Act enabled local authorities to apply for a Charging Order on a resident's property. Primarily intended as a debt recovery process, some local authorities have used Charging Orders as a proactive process for deferring care home fees.
Since 2002, the Scottish Executive (now the Scottish Government) has monitored the use of DPAs through statistical returns in 2003, and 2 separate follow-up surveys in 2004 and 2006. The surveys revealed varying practices across Scotland with respect to giving care home residents the option to defer payment of fees, low use of DPAs, and continued use of Charging Orders by local authorities. The Scottish Executive surveys carried out in 2004 and 2006 indicated that 108 DPAs had been set up across Scotland between 2002 and 2006, although subsequent investigation as part of the research confirmed the number of DPAs established up to 2006-7 to be 10, concentrated in 4 local authorities.
Against this background, RP&M Associates were commissioned by the Scottish Executive to undertake a piece of research that would augment the information already collected through the 2 surveys. The primary aim of the research was to explore with care home residents and their relatives, their knowledge of, attitudes towards, and experiences of DPAs; to identify barriers and deterrents to applying for DPAs; and to identify potential for increasing uptake of DPAs. The research was based on 14 local authorities, and used qualitative methods to gather information from residents and their relatives, older people in the community and local authority officials.
Findings
Provision of information
Only a few of the local authorities included within the research have provided information on DPAs in any meaningful way. Several had no written material to offer residents, and relied on front-line staff, with varying levels of knowledge about the process, verbally communicating options to residents and/or their relatives.
Interviews with relatives of care home residents revealed that the period around the organisation of a care home placement is typically very stressful, and that the provision of readily available, detailed, easy to understand information about the options available to them would be of great assistance at this time.
Several of the relatives of residents who took part in the research had not, as far as they were aware, been informed about any options to defer payments for care home fees from the council with whom they liaised.
Understanding of DPAs
The research found that the majority of local authority representatives interviewed had a clear understanding of DPAs. A degree of misunderstanding was evident in a small number of local authorities where arrangements based on Charging Orders were referred to, and recorded, as DPAs. Levels of understanding amongst front-line staff, though, were found to be poor. The research found that front-line staff advising families often had little understanding of the DPA process.
The representatives of residents interviewed had little knowledge or understanding of DPAs, with misconceptions about DPAs being commonplace. However, it was apparent that this confusion was not limited to DPAs, but was evident with regard to other aspects pertaining to the financing of a care home place.
Uniformly, the older people who took part in community-based focus groups had no knowledge of DPAs, or any other mechanism (i.e. Charging Orders) that would allow them to defer paying for a care home place, should they require one in the future.
Attitudes towards the principle of DPAs
The research found support for deferring payment of care home fees across all groups included in the research.
Whilst most of the local authority representatives were supportive of the principle of allowing care home residents to defer paying for their care home place, concerns were noted about the resource implications of this for local authorities by some of the representatives that took part in the research.
Many of the local authority representatives thought that the most appropriate vehicle to allow care home residents to defer payments was a Charging Order, and many, but not all, local authorities have been offering this option to residents for several years.
Families were supportive of the principle of deferring payments, as were the community-based older people's groups. The research identified various reasons why it may be in the best interest of a resident and their family to retain their home and defer paying for the care home place.
Experience of the application process
Those local authorities that had established DPAs reported the process to be lengthy (up to 2 years in one case). This was largely attributed to low levels of knowledge amongst clients' legal representatives. However, councils acknowledged that they themselves had also encountered "teething problems" in establishing their first DPAs. Despite these difficulties, interviewees believed that the process should be relatively straightforward and able to be executed in 3 to 4 weeks.
In addition to commenting on the setting up process, some interviewees also raised some concerns about the guidance governing agreements once in place.
The research found local authorities to be charging care home residents (up to £500) for setting up DPAs.
Those authorities offering deferred payments based on Charging Orders reported the process involved to be straightforward, quick and low cost (costs of up to £100 were noted, although practices varied as to whether these costs were passed on to residents).
The few residents who took part in the research who had actually set up a DPA were very satisfied with the outcome, although there were some issues in terms of the process of setting up the DPA. Most satisfied with their experience, however, were residents who had set up a deferred arrangement through a Charging Order. Despite general satisfaction, there were some concerns raised about the Charging Order process, particularly in relation to the level of communication provided in establishing and maintaining the arrangement. In addition, the research found a lack of awareness amongst relatives of residents about the detail of arrangements established on behalf of their relatives (e.g. interviewees being unaware that any arrangement had been established, or believing, based on local authority documentation, that they had a DPA in place).
Barriers and deterrents
The research identified 4 main barriers to the use of DPAs. It also reported "transfer of ownership" as a factor perceived as contributing to the low uptake of DPAs.
Mixed implementation of policy by local authorities
The research has found varying practices across local authorities in terms of offering and promoting DPAs and this is likely to have acted as a barrier to uptake. Further, some local authorities are clearly not offering residents any vehicle by which to defer care home fee payments.
Information and communication
One of the main barriers that exists with respect to individuals applying for a DPA is lack of information being passed by local authorities to residents about the ability to enter into such an arrangement with the local authority in the first place.
Up-front costs associated with DPAs
One of the other main factors deterring care home residents and their families from entering a DPA is the up-front cost associated with setting up a DPA. These include the costs of engaging a solicitor, the cost of arranging a valuation of the property, and can also include any fees charged by the local authority for their legal input in establishing the agreement.
The DPAs process
Both relatives who took part in the research who had actually set up a DPA thought that the level of bureaucracy surrounding the DPA process was quite off-putting. The need for care home residents to have capacity to enter into a DPA - or have power of attorney arrangements in place for some one to do this on their behalf - was noted as an issue by local authority staff.
Transfer of ownership
All of the local authority representatives who participated in the research stated that, in their view, a noteworthy factor contributing to the low uptake of DPAs was the practice amongst families of "transfer of ownership". This is the practice whereby the property belonging to the prospective care home resident is transferred to another, usually younger, member of the family. This can have the effect of removing the property from the financial assessment process and reducing the need for deferred payment of care home fees.
Conclusions
To date, guidance provided to local authorities by the Scottish Executive has strongly recommended that local authorities do not use Charging Orders as a substitute for DPAs, but use them solely for the purposes of debt recovery. However, the research suggests that Charging Orders appear to be a good option for providing choice to residents in this area, primarily because they are low cost and straightforward to establish. The research also reported a perceived resource issue for some local authorities that deters them from offering deferred payments. This issue may need further investigation.
To ensure that an adequate level of choice is afforded to all care home residents across Scotland, it is important that the issues that have been identified in this research are addressed. In particular, the need for good quality information and advice to care home residents and their families is paramount, as is good communication from the local authority to the care home resident and their family to supplement this information, to enable care home residents to access the choices available to them.
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