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APPENDIX 1: CASE STUDIES
CASE STUDY 1:
DEFERRED PAYMENT AGREEMENT
This case study outlines the experience of a relative who successfully set up a DPA in relation to his mother's care home fees.
Mr. A's mother had lived in her own home without much support from either formal or informal carers. However, after a severe fall and a spell in hospital, it became clear that she was not fit enough to return to her own home, and the local authority assessed her as in need of a care home place.
Prior to Mr. A's mother falling and being hospitalised, the family had not given any thought to financing a care home place. The first time they really addressed the issue was when Mr. A's mother was in hospital. At that time, they were not entirely sure if their mother would have to contribute to her care home fees, and were not sure how she would contribute as she had no liquid assets. Mr. A and his brother discussed financing her care home place through a loan.
Mr. A said that he and his brother did not want to sell their mother's home. She had always been very independent, and they did not like the idea of having to tell her that she would have to sell her home. As well as this, Mr. A's father had told his sons before he died "don't let them put her out of her home". Although Mr. A knew that his mother would never return to her home once she was in the care home, it was important for the family to retain it for her.
Once Mr. A's mother was assessed as needing a care home place, he was sent a letter by the local authority, which outlined the options that were available to them, which included the option of a DPA. Mr. A felt that the options were laid out in a clear and concise manner, and that he had no problem understanding the information that he had been given. He did not seek any independent advice about the available options. Mr. A was delighted to find out from the local authority that the DPA option would allow his mother to keep her home, and that he and his brother would not have to finance the care home place themselves to allow their mother to retain her home.
Although Mr. A had looked after his mother's affairs on an informal basis, he did not have legal powers of attorney, and, before applying for a DPA for his mother, he had to set this up with the family solicitor. Once power of attorney was in place, Mr. A engaged the lawyer further to negotiate the agreement on his behalf, and the solicitor entered into a dialogue with the legal department of the local authority in order to set up the agreement.
Mr. A said that there was a lot of paperwork involved in setting up the DPA and that a lot of information had to be supplied as part of the process.
Mr. A remarked that he thought that some families would simply not cope with the paperwork involved. Indeed, Mr. A said that, had the decision about whether the family should continue to apply for the DPA been left to his brother, they would not have continued with the process when they discovered the effort involved from their side. However, as Mr. A had a professional background, and was used to form filling and application forms, he persevered with the process and continued in his efforts to set up the DPA for his mother.
Mr. A. also said that some families might find the task of gathering all the financial information required onerous. However, because he had been helping his mother with her finances, he had much of this information to hand.
Throughout the process, Mr. A found the local authority to be very helpful, and any information requests he made to the local authority were dealt with in a timely manner and with clarity.
As well as engaging a solicitor, Mr. A also had to engage a professional surveyor to provide an up to date market valuation for his mother's property. In all, Mr. A had fees totalling £1,000 in order to set up the DPA. Mr. A said that the agreement took around 4 months to complete.
Despite the fact that the process of setting up the DPA was quite lengthy, and had up-front costs attaching to it, Mr. A said that the DPA arrangement is a fantastic arrangement for families. Since setting up the DPA for his mother's care home fees, the family have rented out their mother's home and have a private tenant living in the house. Mr A. has received one update from the local authority about the level of on-going fees that have been accrued since the agreement has been set up, and his expectation was that he would continue to receive statements on an annual basis, until the end of the agreement.
The arrangement has allowed the family to retain their mother's home, and has allowed her to enter the care home without having had to experience her home being sold to fund the care home place.
When asked about the whole process of applying for a DPA, and what changes could be made to the process to encourage others to enter into a DPA, Mr. A said that he felt that the real deterrent would be the fact that the process is fairly protracted, and all the while, one does not know for sure whether efforts will lead to a successful agreement.
Mr. A noted that, whilst there was a lot of paper work involved, he was unclear as to how the agreement could be set up with less paperwork, and he understood why the local authority were requesting it.
Mr. A also suggested that families may be wary of approaching a solicitor to act on their behalf, when the solicitor themselves may have little or no awareness of DPAs. He thought that families might find it useful if there was an approved list of solicitors whom they could approach who were guaranteed to be knowledgeable and experienced as far as setting up DPAs was concerned
Mr. A also said that he thought it was important that more front-line health and social care staff should be aware of DPAs, as often older people are assessed as needing a care home place after a spell in hospital, or when an intensive home care package no longer meets the requirement of the individual. Mr. A. said that the more front-line staff who were aware of DPAs as an option, the more likely it was that older people and their families would become aware of the DPA initiative.
CASE STUDY 2:
ATTEMPTED DEFERRED PAYMENT AGREEMENT
This case study presents the experience of Ms. B who attempted, unsuccessfully, to set up a DPA on behalf of her mother. The case resulted in a Charging Order being placed on the property, although Ms. B was unaware of this until she started the process of selling her mother's home.
Prior to moving into a care home, Ms. B's mother had lived on her own. Her mother's health had deteriorated rapidly in the space of 2 years and, although Ms. B, as well as the family GP, thought that she required home care, she was reluctant to have any help. Even when her mother was eventually assigned a home care worker, she frequently refused to allow them to help with any tasks. Ms. B said that this was due to the dementia that her mother was suffering.
Ms. B found this period very distressing as she knew her mother was not taking care of herself, and she was not receiving sufficient support. This was exacerbated by the fact that Ms. B lived and worked in a different part of the country from where her mother lived.
After several episodes of her mother wandering in the middle of night, social work services assessed Ms. B's mother as needing respite care. At this time Ms. B requested a meeting with social work services. Ms. B and her sister had heard of the possibility of deferring care home payments, and they were particularly keen to explore this option with social work services. Ms. B and her sister had just recently had to clear and sell their aunt's house prior to her moving into care, and did not feel they were able to go through the same process so soon with their own mother. The ability to defer selling their mother's home was therefore appealing to them. Ms. B had made some enquiries within the Scottish Executive, prior to her meeting with social work services, and had found out that there was a scheme in place which allowed residents to defer paying for their care home place, and that the Executive allocated money to each local authority to allow them to offer this option to individual care home residents.
At the meeting with social work services, Ms. B found the council staff very unhelpful, and not forthcoming about the options that were available to her mother. Ms. B said that, when she asked specifically about deferring care home fees so that she did not have to sell her mother's house, she was put off pursuing this option because of what she learned about the option from the council staff.
The council officers told her that they only knew of one person who had pursued a DPA in the whole of Scotland, and that there would be a lengthy process involved. They informed Ms. B that she would have to enter into a legal agreement with the council, and that she would have to engage a lawyer to do this, which would incur
up-front legal costs. The council representative also told Ms. B that she would be responsible for insuring and maintaining her mother's property until such times as it was sold, and that interest would be added to the fees that were accrued over the period of deferral. Ms. B said that the council officers were unable to tell her the amount of interest that would be added.
When Ms. B left the meeting, and reflected on the information given to her by the council officers, she was sufficiently put-off and decided not to pursue the option of a DPA, despite the fact that she had been keen to defer selling her mother's home. At the meeting, no other option was discussed with Ms. B that led her to believe that there was another way of deferring payments for her mother's care home place, and deferring the sale of her mother's home, and she was not given any literature by the council officers. Ms. B said she did not know what she was going to do and believed that she had no other option but to sell the home.
When Ms. B's mother was in respite care, she was assessed as needing a care home place, and stayed in the care home in which she was receiving respite care. Ms. B knew that capital from her mother's house would be disregarded for the first 12 weeks she was in the care home, but that after that it would be taken into account in terms of calculating how much her mother should be contributing to her fees each week.
After the 12 week disregard period had ended, Ms. B and her sister had still not sold their mother's property. However, when they enquired with the care home, they were informed that the council were continuing to pay for all of her mother's fees. Ms. B said that she could not understand why this was happening, and concluded that this must have been an error on the council's part.
Ms. B said that this discovery made her want to sell her mother's house as quickly as possible. She feared that as soon as the council realised the error, they would then apply interest to the fees that were accruing, so she immediately put her mother's house up for sale. Whilst her mother's house was up for sale, the solicitor dealing with the sale informed Ms. B that the local council had a debt registered against the property. Ms. B assumed that this related to the care home fees, but, not knowing that the council had placed a Charging Order on the property, was unaware how the council could have known that her mother's property was for sale.
Ms. B was disillusioned with the whole process. Having wanted to avoid the situation where she had to clear and sell a house soon after going through this whole process with her aunt, she ended up having to do just that, because of the information she had been given from the council. What she learned about the DPA process was sufficiently off-putting to make her not want to pursue this, and as far as she was concerned, she had not been offered any alternative route that would have allowed her to defer the process of selling her mother's home.
Ms. B felt that there were many improvements that could be made to the whole process. She reiterated the fact that the whole process of finding a care home place, and dealing with the deterioration in health, which necessitated the care home place, were stressful enough. However, for her, this stress was compounded by the fact that she was offered little by way of information about the different options available in terms of paying for care home fees, and the lack of communication by the council's social work services about the arrangement that they had put in place.
Had Ms. B known that a Charging Order had been put in place, and that this in effect was a form of deferred payment arrangement where she would not be charged any interest, she could have taken her time selling her mother's house and given herself some time before having to clear and get her mother's property ready for sale, rather than having to go through this process so soon after having done this for her aunt.
Ms. B said that readily available and clear information about options open to care home residents and their families, as well as better communication between social work services and families was urgently required.
CASE STUDY 3:
' DPA' / CHARGING ORDER
The following case study involves a care home relative, Ms. C, who applied successfully to defer payment. Information available to the research project indicated that the arrangement put in place involved a Charging Order on the property, although Ms. C was unaware of this aspect of the arrangement until it was brought to her attention by the research team.
Prior to her mother requiring care in a care home, Ms. C had not given any thought as to how her mother would fund a care home place, nor how much this was likely to be. After a period of hospitalisation, it was clear that Ms. C's mother was not going to be able to return to her home, but would require full time care.
Ms. C's family was particularly eager not to sell her mother's house, as her brother was living in the house. He had been living there for over 6 years, since his marriage break-up. In order to enable him to continue to live in the house, they wanted to retain the property. However, at the same time, they were unsure how they, as a family, could pay for their mother's care without realising the capital from the property.
Ms. C decided to contact social work services in order to explore with them the options that were available to the family. Ms. C found the contact within social work services extremely helpful. Ms. C said that the council officer informed her that they did not have to sell her mother's home and discussed with her the routes that were available. Ms. C said that she understood that she could either enter into an interim payment agreement, which she understood to be a relatively short-term option available to those who wanted to sell their property immediately, or they could enter into a deferred payment agreement, which would allow them to defer paying care home fees, and defer the need to sell their mother's home until after she had died.
As well as outlining these options in a discussion with Ms. C, the council officer also sent her a leaflet that outlined these options, and gave Ms. C the contact number for a colleague in the finance section, in case she had any more queries about DPAs or interim funding.
Ms. C and her family very quickly decided that they wished to pursue the option of a DPA. Ms. C said that the council official suggested that she seek independent advice about the various options open to them. However, they decided as a family, without further consultations with a third party, that a DPA was the best option for them, as this would allow her brother to continue to live in the family home.
Ms. C said that the process of setting up the DPA was very straightforward and involved little paperwork. Ms. C said the application form, which was sent by the council to apply for a DPA, was very straightforward. All that was required was for Ms. C to tick a box to say that she wanted to apply for a DPA, and to sign the agreement.
Ms. C said that she did not have to enter into a legal agreement with the council nor did she have to engage a lawyer to act on her behalf to negotiate with the council. Very quickly after returning this form to the council, Ms. C was sent out a letter that outlined the agreement, and the exact weekly amount that was being deferred. Ms. C was informed that for the first 12 weeks, her mother's property would be disregarded and the council would pay the entire fees of £471. The letter also stated that, after this period, Ms. C's mother would receive the nursing element of free personal care, and that the amount being deferred was the difference between the total fees and free personal care.
Ms. C said that since this initial letter informing her of the amount being deferred, she has not received any subsequent updates about levels of accrued debt. She thought that this was the one aspect of the process the council could improve on, although she was not too worried about it as she had her original paperwork and would be able to work out herself how much was owing to the council.
Ms. C said that there was no delay from the point of applying to defer payment to the point of receiving a letter from the council to inform her that the application had been accepted.
Ms. C and her family are delighted with the arrangement that they have in place, as it has allowed her brother to be able to remain in the family home. Ms. C also said that, psychologically, it has been good for her mother as well. Although the family know their mother will never return to her home, she said that it has been important for her mother to know that the house is still there. Ms. C said that her mother often talks about the house and it is a comfort to her knowing that her son still lives there.
Ms. C said that she could not understand why more people did not take up the option of a deferred payment arrangement (referred to be Ms. C as a DPA, but which was, in her case, in fact an arrangement based on a Charging Order). From her point of view, the process was very smooth and easy to go through. She had received easy to understand information about the process from the local authority, and the actual setting up of the agreement was quick and straightforward, with no up-front costs to the family. Most importantly, the outcome achieved through setting up the arrangement was most satisfactory, as far as the family were concerned.
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