CIRCULAR NO: SWSG7/97 Desk Officer: 5455

SWSG Guidance Package Index Ref: F2

4 April 1997

Primary Users:

Chief Executives, Unitary Councils and Islands

Copy to: Directors of Social Work

Chief Social Work Officers

Directors of Finance

Holders of the SWSG/SWSI Circulars and

Guidance Package (Circular only)

Dear Colleague

CHARGING FOR RESIDENTIAL SECTOR ACCOMMODATION

I. NATIONAL ASSISTANCE (ASSESSMENT OF RESOURCES) (AMENDMENT) REGULATIONS 1997

II. NATIONAL ASSISTANCE (SUMS FOR PERSONAL REQUIREMENTS) REGULATIONS 1997

III. NEW THERAPEUTIC EARNINGS LIMIT

SUMMARY

This Circular is issued under section 5(1) of the Social Work (Scotland) Act 1968 and:

I. (a) encloses a copy of the amendment regulations (Statutory Instrument 1997 No. 485) to the National Assistance (Assessment of Resources) Regulations 1992 which local authorities are required to apply from 7 April to the financial assessment of adults placed in residential and nursing home accommodation. It also provides consequential amendments to the Scottish Office guidance on the Regulations (Annex 1).

(b) amends page 3 of Circular SWSG13/1995 which covered guidance on the National Assistance (Assessment of Resources) Regulations 1995. A full copy of the Circular is enclosed (Annex 2).

(c) amends the Scottish Office guidance on Section 21 to 24 of the Health and Social Services and Social Services and Social Security Adjudications Act 1983 (HASSASSA) under cover of Circular SWSG15/1993. A full copy of the guidance is enclosed (Annex 3).

II. encloses a copy (Statutory Instrument 1997 No. 486) of the revised Personal Expenses Allowances which applies from 7 April 1997.

III provides details of the New Therapeutic Earnings Limit.

I. CHARGES FOR RESIDENTIAL ACCOMMODATION - GUIDANCE AMENDMENT

Action

1. Local authorities should (a) substitute the Guidance pages at Annex 1 for the pages already in the Charging Guidance (SWSG 8/96) at F2 of the SWSG Guidance Pack, and (b) initial and date the Records of Amendments sheet at the back of the Charging Guidance to indicate that this has been done. Local authorities should also add the National Assistance (Assessment of Resources) (Amendment) Regulations 1997 (attached to this circular) at F2 of the Guidance Pack. Authorities should also substitute Circular SWSG13/1995 and the revised guidance on HASSASSA for the current guidance.

Background to the changes

Disregard of 50% of Personal and Retirement Annuity Contracts

2. From 7 April 1997, local authorities will be required to disregard 50% of any personal pension or payment from a retirement annuity contract where a resident has a spouse who is not living in the same residential care or nursing home. The requirement to ignore 50% of the personal pension and retirement annuity contract will apply where the resident is passing at least 50% of that pension to his or her spouse for the spouse’s maintenance. This is an extension of the 50% disregard that applies to occupational pensions.

3. This requirement applies to personal pensions, payments from a retirement annuity contract and occupational pensions only. It does not apply to unmarried couples or divorcees. If a resident ceases to make at least 50% of the occupational pension, personal pension, or payment from a retirement annuity contract available the disregard no longer applies. Further guidance is contained at paragraph 8.024A of the Guidance.

Guidance to residents

4. Local authorities at the first point of contact, or at the initial financial assessment, should give advice to the resident and spouse about the 50% disregard that applies to married couples. It should be pointed out to the resident that they have a choice in passing 50% of their occupational pension, personal pension or retirement annuity contract payment on to their spouse. Advice should also be offered as to whether the spouse would be better off, taking account of the effect of these payments on Social Security benefits (particularly means tested benefits).

Income Support arrangements and Occupational Pensions

5. The 50% disregard on occupational pensions only applies to Income Support for residents with "preserved rights". Where a post-April 1993 resident passes 50% of his or her occupational pension to the spouse living in the community the resident’s Income Support will be calculated taking into account the full occupational pension payable to the resident. No allowance will be made in the Income Support assessment for the amount being passed over.

6. Where the spouse in the community still needs to claim Income Support, or other means tested benefits, any part of the resident’s occupational pension which is being received by the spouse will be taken into account in the spouse’s benefit calculation. Where no offer has been made by the resident to the spouse to pass over part of the occupational pension, there should be no question of the Benefits Agency treating the spouse at home as having notional income. Notional income should only effect the Income Support entitlement where the resident has offered to pass part of his or her occupational pension to the spouse and the spouse has refused it.

Residents with a beneficial interest in a property

7. There may be cases where it is unclear as to who may have a beneficial interest in a property. The name on the deeds must be established to show who owns the property. This should then establish who has an interest in the property.

8. However, if the local authority is unsure about the resident’s share, or if their valuation is disputed by the resident, a professional valuation should be obtained. If ownership is disputed and a resident’s interest is alleged to be less than seems apparent from the initial information, the local authority will need written evidence on any beneficial interest the resident, or other parties, possess. Such evidence may include the person’s understanding of events, including why and how the property came to be in the resident’s name or possession. Where it is contended that the interest in the property is held for someone else, the local authority should require evidence of the arrangement, the origin of the arrangement and the intentions for its future use. (See new paragraph 7.014A of the charging guidance).

Health and Social Services and Social Security and Adjudications Act 1983 (HASSASSA)

Clarification on the deliberate deprivation of assets (section 21 of HASSASSA)

9. Section 21 of Hassassa provides that (a) where a resident has transferred an asset to a third party with the intention of reducing his liability for charges, the third party shall be liable for the difference between the amount assessed as due to be paid by the resident and the amount which the LA receive from him for his accommodation and (b) that the transfer must have taken place no more than 6 months before admission to residential or nursing home care.

10. The 6 month rule can therefore only be applied from the date when a local authority has assessed a person as needing residential sector care and has arranged a placement in a local authority home or independent sector home. The 6 month rule does not apply where a resident is self funding in an independent sector home, has not been assessed, nor had their placement arranged by a local authority.

II. NATIONAL ASSISTANCE (SUMS FOR PERSONAL REQUIREMENTS) REGULATIONS 1997

Legal basis

11. The amounts that local authorities allow in their charging assessments for personal expenses for people placed in residential sector accommodation are prescribed in regulations under section 22(4) and (4A) of the National Assistance Act 1948. These amounts are usually increased each April at the same time Social Security benefits are uprated. The amount allowed for personal expenses in the local authority charging assessment is the same as the amount awarded in the Income Support assessment for residents in residential sector accommodation who have preserved rights.

12. The standard amount of personal expenses allowance (PEA) is specified each year in the National Assistance (Sums for Personal Requirements) Regulations and is the same for each resident whether they are placed in a local authority or independent sector home. A copy of the National Assistance (Sums for Personal Requirements) Regulations 1997 is enclosed with this circular.

New PEA Amount from 7 April 1997

13. The new PEA prescribed amount of £14.10 comes into force on 7 April 1997. It applies to everyone in residential care or nursing homes receiving help from local authorities to meet the costs.

14. People who entered residential care or nursing homes before 1 April 1993 and who therefore have preserved rights to the higher levels of Income Support (instead of receiving local authority support) will receive the same amount of personal expenses from the Benefits Agency.

PEA and temporary absences from residential accommodation by local authorities

15. Local authorities are reminded that where a resident is temporarily absent they have the discretion to vary the PEA upwards to enable the resident to have more money while staying with family and friends.

III NEW THERAPEUTIC EARNINGS LIMIT

16. Regulations have been made under the Social Security Act 1975 to increase to £46.50 from 7 April 1997 the amount of the net earnings from permitted work which can be received without loss of benefit by people in receipt of Incapacity Benefit or Severe Disablement Allowance. This applies where work is undertaken under medical supervision as part of the person’s treatment while in hospital or elsewhere on the advice of a doctor.

Contact Point

17. Enquiries about this circular may be addressed to Mr Trevor Hall, Social Work Services Group, Room 44, James Craig Walk, Edinburgh EH1 3BA. (Telephone 0131-244-5455).

Note

18. Copies of the enclosures to this Circular are available to other interested parties by contacting Carol-Ann Gray (Tel: 0131-244-5409) at the above address.

Yours Faithfully

GAVIN ANDERSON