« Previous | Contents | Next »
Listen
PART THREE: SUSTAINING THE POLICY
9. ATTENDANCE ALLOWANCE
"The Review Group considers that the Care Development Group was right to view Attendance Allowance in care homes as a UK contribution towards personal care costs."
9. ATTENDANCE ALLOWANCE
The Review Group considers that the Care Development Group was right to view Attendance Allowance in care homes as a UK contribution towards personal care costs and recommends that the Scottish Government should:
- In the short-term seek the reinstatement of the £30 million in Attendance Allowance withdrawn to those in care homes at the time of introduction of the FPNC policy in Scotland and for those arrangements to stand until the wider assessment of funding streams for long-term care at a UK level (described in Chapter 10 below) can be made.
Introduction
101. The third strand of our remit was to look at the implications of the decision by the UK Government to cease making payments of Attendance Allowance ( AA) for residents in care homes in receipt of Free Personal and Nursing Care ( FPNC) in Scotland; and the impact on the financial balance between the Scottish Government and UK Government. The value of AA payments that would previously have been made to residents in care homes was around £23 million a year when the policy was first introduced in 2002 and has risen to around £30 million in the current year. The Scottish Executive and now Scottish Government have ensured that residents have not lost out financially directly from the withdrawal of AA.
102. Evidence we received emphasised the inequity in the different arrangements that apply in terms of eligibility for AA between older people in their own homes, older people in care homes in other parts of the UK in receipt of free nursing care; and older people in care homes in Scotland receiving FPNC. It is clearly contrary to equity that entitlement to AA has stopped for those in care homes in Scotland, while it continues for those residing in care homes elsewhere in the UK.
103. While the DWP may have acted to apply the letter of the law in terms of the legal position and interpretation of "accommodation" set out below and the Scottish Executive acted to avoid any direct impact on individuals by making good the level of free personal care payments to those in residential care, there is clearly still inequity and the Scottish budget is bearing the brunt of that in terms of £30 million a year in lost state benefits.
Payment of Attendance Allowance to those in Receipt of Free Personal Care in Scotland
104. With the introduction of the FPNC policy in Scotland in July 2002 AA was withdrawn from individuals in residential care who had all their disability-related needs met by that care. AA is a tax-free social security benefit paid to people over the age of 65 who need help with personal care or who need a lot of looking after. It is intended as a contribution towards the extra costs faced as a result of being physically or mentally disabled.
105. As a state benefit, responsibility for AA is reserved to the UK Government and is administered by the Department for Work and Pensions ( DWP). There are currently 2 rates of allowance: a Higher rate of £67.00 a week and a Lower rate of £44.85 a week; the amount received by an individual depends on how much they are affected by their disability. Eligibility is governed by the need for supervision, but claimants do not actually need to be in receipt of such support, as the allowance is a compensation for disability or for personal care needs rather than a payment to cover the direct costs of services.
106. Prior to the introduction of free personal care the Scottish Executive explored the issue of future payments of AA to self funders in care homes in Scotland with DWP. However, attempts to resolve the issue of withdrawal with UK Ministers were unsuccessful and as a result savings of around £23 million were accrued to the DWP budget. DWP took the position that wherever some or all of the costs of a person's residential care are met from public funds by a local authority, the payment of AA would, under the Regulations, amount to duplicate provision from public funds and therefore be ultra vires. Therefore, it has acted since to withdraw payments of AA from people who receive financial help with the cost of their place in a care home from their local authority 4 weeks after admission.
107. As a result of the DWP stance in 2001, the Scottish Executive set free personal care payments for those in care homes at a level which allowed for the withdrawal of AA in those cases. There was no loss to those individuals in real terms as the Executive decided to make good the loss via the personal care flat rate payments. Accordingly, it set the personal care flat rate payment at £145 per week from 1 July 2002, representing the £90 recommended by the Care Development Group and £55 to allow for the withdrawal of AA. In 2002-03 there were around 7,600 self-funding care home residents in receipt of free personal care. At current levels of client numbers (approximately 9,300) and of AA rates, the Scottish Government estimates that it is having to continue to make good a gap in funding which amounts to at least £30 million a year.
Legal Position
108. The Social Security (Attendance Allowance) Regulations 1991 provide that an individual is not entitled to AA if they are in accommodation paid for partly by public funds under an enactment relating to persons under a disability. Free personal care payments are made under the Community Care & Health (Scotland) Act 2002, which has been held to be an enactment relating to persons under a disability.
109. The Tribunals and Deputy Commissioner have held that "accommodation" means accommodation and personal care provided there. Therefore, if an individual is in accommodation which provides personal care (e.g. a care home) then any free personal care payments (other than the nursing care element which is specifically excluded under the 1991 Regulations) are treated as payments towards "accommodation" and the person stops being entitled to AA. Where an individual receives care in their own home, then the FPC payments are not payments towards "accommodation" but towards personal care only and therefore the 1991 Regulations do not exclude the person from payments of the allowance. Accordingly, those receiving personal care at home can and do still receive AA.
Inequity and Poorly Targeted Support
110. This distinction has led to the apparent inequity described in much of the evidence we heard. Whilst older people in their own homes receiving support for their personal care needs and older people in care homes in England receiving support for their nursing care (at a single fixed rate of £101 per week) may be eligible to receive AA, older people in care homes in Scotland receiving FPC are not. The benefits system is, of course, a reserved matter and it is for the UK Government to consider whether these different arrangements are consistent with ensuring equitable arrangements for older people with long-term care needs.
111. The evidence we received also questioned whether current expenditure on benefits for older people with long-term care needs is well targeted. This was also an issue identified in the Kings Fund Report on long-term care. 9 In December 2007 there were just under 200,000 people aged 65+ in Scotland in receipt of one or other of the 2 main universal state benefits for those with personal care needs - AA or Disability Living Allowance ( DLA) care component. Just under 140,000 receiving AA and about 60,000 DLA; although the age profiles of recipients were very different, with a large number of younger people receiving DLA. Of the 140,000 receiving AA, around 41,000 were adults aged 65+ receiving local authority personal care at home. AA is not means tested or taxable and recipients are free to spend the allowance on whatever they wish. There is little evidence or research about exactly how AA is spent or indeed if claimants use it to purchase social care services at all.
112. AA is awarded indefinitely on passing a disability test. Its award can also increase the amount of other benefits or credits an individual is entitled to. But it is thought that as many as 80% of those applying for the Allowance and satisfying the disability test would not satisfy local authority assessment for free personal care.
113. Two key differences in qualifying for free personal care and AA are: the assessment process, people do not apply for free personal care in the way they would apply for a state benefit like AA, rather they are referred (or can refer themselves) for assessment by local authority specialist staff; 10 and the demand-led nature of the latter, which was clearly a universal provision (whereas demand for FPC services is currently being "managed" in many instances, with eligibility criteria and waiting lists common place and individuals receiving different levels of service depending on where in Scotland they live).
114. The Review Group concluded that as things currently stood, the funding streams for state support and FPC, did not sit well together and the 2 separate assessment processes added to individuals' confusion over the support available. AA was poorly targeted and it was not clear how the money was used by clients and FPC was inequitable as long as variations in eligibility continued across the country.
115. It also noted that neither system of assessment as currently operating sits well with the Scottish Government's personalisation or direct payments/self-directed support agendas which sought to promote equity and freedom of choice in their care services. Although, it was noted that assessment for AA can form part of the element of the assessment and care planning process for FPC which seeks to ensure that older people are claiming all the benefits to which they are eligible. 11 Take-up of self-directed support has been slow in Scotland but an extension of that system (similar in some ways to the use of vouchers as in Germany) might offer an alternative which sat much more comfortably with personalisation and ensure that resources were better targeted on need.
Re-prioritising the Total Cost of Social Care Provision and Support for Older People in the UK
116. The UK Government is expected to consult on possible reform options for the care and support of older people in a public consultation paper this spring, ahead of a formal Green Paper. Although the potential implications of these reforms for AA are not yet clear it is one of the 2 main state benefits through which UK Government support for long-term care needs is channelled and in any re-prioritisation of spending within overall spending on social care in the UK; the other being DLA (Care Component).
117. The Review Group examined the latest demographic projections up to 2031 and is of the view that although other health and social factors will continue to influence the demand for FPNC and therefore the movement of costs over time, the greatest single determinant will be profound demographic change. The scale of change is such (accepting the uncertainties described in detail in Chapter 12 of our report) that a major re-prioritisation of public funding, which brings other key strands of funding for social care, such as AA and DLA (Care Component) into the equation is necessary. It concluded that the targeting of these funding streams should be examined as part of a wider re-examination of all public funding for long-term care of older people.
118. It questioned whether, in view of the implications of the degree of demographic change, those resources might be better directed to support the costs of individuals in greatest need.
119. A detailed analysis of the total costs of care is set out in detail in Chapter 12 below but essentially the Review Group concluded that the growing demand for care was such that it would be essential in the longer-term to re-align social care funding towards those in greatest need, i.e. those in need of personal care. That will entail fundamentally reviewing how DWP state benefits and other funding streams are directed.
120. The Review Group concluded that in the short term, the Scottish Government should address the imbalance in government funding streams by seeking the reinstatement to the Scottish budget of the £30 million a year in benefits lost to the DWP, which it is currently making good to avoid any impact on the 9,300 older people in residential care in Scotland who currently receive free personal care.
121. Furthermore, in the light of the growing demand for long-term care and sharply increasing cost pressures the Scottish Government needs to engage fully with the UK Government on the question of whether the £500 million per annum used to support long-term care in Scotland might be better targeted and prioritised to ensure that all individuals assessed as in need of care services, including personal care, can have their needs met.
« Previous | Contents | Next »