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CHAPTER 4 UNDERSTANDING OF DEFERRED PAYMENT AGREEMENTS
Introduction
4.1 The research sought to establish the extent to which the relevant parties had a sound understanding of DPAs. The following section provides an account of the levels of understanding found amongst local authority representatives, residents and their families as well as the community-based older people who took part in the research.
Views of local authority representatives
4.2 Most of the social work finance staff interviewed as part of the research had a good understanding of DPAs, and could identify clearly the responsibilities of a resident or their power of attorney in terms of setting up the DPA, and their subsequent responsibilities regarding the up-keep of the property.
4.3 It was clear, though, that there was a degree of misunderstanding within 2 of the local authorities. Both had indicated in the 2006 Scottish Executive survey that they had set up several DPAs since 2002. However, interviews with the representatives from these councils revealed that, when they receive an application form for a DPA, the local authority's legal services department applies a Charging Order to the resident's property. Local authority representatives were aware that this was how applications were dealt with, but understood this arrangement to be a DPA. The relatives who were interviewed as part of the research in these local authority areas also understood the arrangement they had in place with their local authority to be a DPA. Indeed, the application form and accompanying paperwork that the interviewees received from the councils stated that they were applying for a 'Deferred Payment Agreement'. Whilst this allows the resident to defer payments, in the same way that a DPA does, it is not the same process as no legal agreement has been reached between the resident and the local authority.
4.4 It is evident that other local authorities not included in the research also experienced this confusion. This was indicated by a number of anomalies in the responses to the Scottish Executive surveys, including the case of Dumfries and Galloway in particular, where the research found that the DPAs reported in the surveys (75 in total across 5 years) were in fact all Charging Orders.
4.5 As reported previously, 10 out of the 11 DPAs recorded by Falkirk Council were in fact Charging Orders. In this case, the classification of these 10 as Charging Orders was not due to misunderstanding of the processes involved. The Council revealed that in all 10 cases families did not have the power of attorney required to establish a DPA. However, in the spirit of allowing clients to defer payments, Falkirk Council used the Charging Order regime to facilitate this, but continued to classify the arrangements as DPAs in their Scottish Executive survey returns.
4.6 Although finance staff were generally knowledgeable about DPAs, it should be pointed out the same did not appear to be true of front-line social work staff. The 2 front-line staff interviewed for the research had little understanding of the details or processes in establishing a DPA. Clearly, this is an issue, as such front-line staff will be the initial contact with residents and/or their representatives. Edinburgh City Council have recognised this problem and are advising front-line staff to refer residents and their representatives directly to the finance section of Social Work Services. This practice is already established in Highland, Borders and Falkirk Council.
Views of care home residents and their families
4.7 In terms of the understanding of DPAs amongst the representatives of residents who were interviewed, it was apparent that not all understood what a DPA was; in fact one participant had never heard the phrase until the actual interview itself. Such variation in the level of understanding is perhaps unsurprising, given the lack of information about DPAs provided by local authorities, as highlighted in the previous section.
4.8 The confusion that undoubtedly exists amongst relatives of care home residents is not confined to the issue of DPAs. It was clear that many of the residents interviewed found various aspects of the funding arrangements and the process of placing a relative in a care home to be complex. One respondent said that she had not been aware that her father's property would be part of the equation when the local authority assessed his contribution to the care home cost; another thought that the introduction of free personal care had meant that her sister would not have to pay anything towards the cost at all.
4.9 The lack of prior knowledge amongst the majority of interviewees about DPAs meant that their understanding of them was based solely on the information (written or verbal) that was provided by the local authority. Inaccurate information or no information has led to no knowledge and/or imprecise perceptions amongst relatives of prospective care home residents. One interviewee stated that she did not pursue a DPA because she was informed by the local authority of the high interest she would be charged if she opted for this route. She had no awareness that the DPA would be interest free until 56 days after her mother died. Others were not aware that the property could be rented out whilst a DPA was in place.
4.10 Many of the interviewees were also unaware of their ability to defer care home payments via Charging Orders. However, 2 of the participants appeared to be extremely well informed and were able to distinguish between the option to defer payments in the short-term via interim funding arrangements based on a Charging Order and on a longer-term basis via a DPA, and were aware that there were different processes involved with the 2 arrangements.
Views of older people in the community
4.11 Within the 2 focus groups with community-based older people, none were aware of DPAs, nor were they aware of anyone who had entered care who had such an arrangement in place. On the whole, most of the older people had not given any thought to the funding of a care home place, should they need or want one in the future. They reported that they had no knowledge of capital limits or the funding options available to them. They believed that if they could not fund their care home place from income, they would have to sell their home and realise this asset, prior to moving.
4.12 There was a perception amongst many of the participants that it was unfair that some people who had never worked received large state contributions to their care home costs, whilst those who had worked and had savings and assets as a result of this, did not. Many of the focus group participants thought that these costs should be paid by the state for all older people who need to go into a care home. A few said older people cared for in a hospital setting would be cared for free of charge, irrespective of savings and assets, and they therefore could not understand why the same was not true of long-term care based in a care home, rather than a hospital setting.
Summary
4.13 The research found that the majority of local authority representatives (social work finance staff) interviewed had a clear understanding of the following: what a DPA is; the steps involved in setting up a DPA; and the responsibilities of a resident who has set up a DPA. As noted above, some degree of confusion was evident amongst a small number of local authorities who operated a Charging Order regime but recorded these as DPAs. However, the same level of understanding was not found amongst the front-line staff who were interviewed. Interviews with front-line staff and residents' representatives revealed that many of the front-line staff advising families had little understanding of the DPA process.
4.14 Understanding of DPAs amongst the representatives of residents was limited, with misconceptions about DPAs being commonplace amongst families. 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.
4.15 Uniformly, the older people who attended the community-based focus groups had no knowledge of DPAs, or any other mechanism (ie, Charging Orders) that would allow them to defer paying for a care home place, should they require one in the future.
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