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Circular No: SWSG2J99 SWSG Guidance Package Index Ref: F2

Dear Colleague

I COMMUNITY CARE (RESIDENTIAL ACCOMMODATION) ACT 1998
II AMENDMENTS TO NATIONAL ASSISTANCE (ASSESSMENT OF RESOURCES) REGULATIONS 1992
III CAPITAL LIMITS AND ASSESSMENT OF NEED
IV VALUATION OF PROPERTY
V NATIONAL ASSISTANCE (SUMS FOR PERSONAL REQUIREMENTS) REGULATIONS 1999
VI NEW THERAPEUTIC EARNINGS LIMIT

SUMMARY

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

I. informs authorities formally about the Community Care (Residential Accommodation) Act 1998 which came into force on 11 August 1998. It also provides further advice on the provision of residential sector care.

II. outlines amendments effective from 11 August to the National Assistance (Assessment of Resources) Regulations 1992 that local authorities apply to adults placed in residential care and nursing homes. It also covers amendments to the SWSG guidance on the charging regulations. Details are set out at the attached Annex.

III. provides good practice guidance on (a) the capital limits that apply under the charging regulations and (b) the assessment of community care needs. The issues addressed at I to III were subject to consultation with local authorities in October.

IV. provides guidance about the valuation of property.

V sets out the revised personal expenses allowance effective from 12 April for people provided with residential sector accommodation under the Social Work (Scotland) Act 1968 and Section 7 of the Mental Health (Scotland) Act 1984.

VI provides details of the new Therapeutic Earnings Limit.

ACTION

1. Primary users should place the guidance and Regulations at F2 of the SWSG Guidance Pack.

1. THE COMMUNITY CARE (RESIDENTIAL ACCOMMODATION) ACT 1998

2. The 1998 Act amends Section 12 of the Social Work (Scotland) Act 1968. It clarifies the law concerning the amount of capital that a local authority must disregard when determining whether to provide a person with residential accommodation.

3. The 1998 Act requires local authorities to disregard a person's capital up to the limit prescribed in the charging regulations made under section 22 of the National Assistance Act 1948 when considering whether to make accommodation arrangements for a person under section 12 of the 1968 Act or section 7 of the Mental Health (Scotland) Act 1984. The prescribed limit is currently £16,000. The 1998 Act is also relevant to those who are self-funding in a residential care or nursing home (see paragraphs 8 to 13).

4. When assessing ability to pay for accommodation arranged under the 1968 Act or 1984 Act, the National Assistance (Assessment of Resources) Regulations 1992 require (a) that capital of £10,000 or less is fully disregarded and (b) that capital over £10,000 and up to £16,000 is taken into account in full for the purposes of calculating tariff income.

II. NATIONAL ASSISTANCE (ASSESSMENT OF RESOURCES) (AMENDMENT NO 2) REGULATIONS 1998

5. The National Assistance (Assessment of Resources) Regulations 1992 have been amended to align with the new provisions of the 1998 Act. A copy of the amendment regulations is enclosed with this Circular for primary users. The regulations have been amended so that the definition of "resident" includes a person for whom it is proposed to provide accommodation under Part III of the National Assistance Act 1948, as well as a person for whom accommodation is provided. (Section 87(3) of the Social Work (Scotland) Act 1968 requires that accommodation provided under the 1968 Act, and section 7 of the Mental Health (Scotland) Act 1984, shall be regarded as provided under Part III of the 1948 Act for charging purposes.) There are also consequential amendments to the current regulations.

6. The amendment regulations therefore enable authorities to apply the charging regulations in respect of a person who is a "prospective resident" so that, where an authority is determining whether to make accommodation arrangements, any capital or other resources belonging to a person can be taken into account before the placement is actually made.

III. CAPITAL LIMITS AND ASSESSMENT OF NEED

7. During the second reading of the Community Care (Residential Accommodation) Bill in the House of Lords, concerns were raised about a number of issues involving the provision of residential accommodation, the capital limits and assessment of need.

8. Local authorities have a legal duty under section 12A of the Social Work (Scotland) Act 1968 to assess the care needs of anyone who, in the authority's view, may be in need of community care services. It is the Department's view that the law does not allow authorities to refuse to undertake an assessment of care needs for anyone on the grounds of the person's financial circumstances, for example, because they have capital in excess of the capital limit for residential accommodation. Even if someone may be able to pay the full cost of any services or make their own arrangements independently (but see paras 8 and 9), they should be informed about the type of care they require and about what services are available.

9. Where an authority has completed a financial assessment of a resident's resources and the person's capital (including the value of any property) is above £16,000, the resident has to pay the full charge. The person may be in a position to make his own residential or nursing home care arrangements. However, the social work department has a duty to offer to make arrangements for those people who are unable to make care arrangements for themselves and who have no-one to make arrangements for them.

10. Once an authority has established that a resident has capital above the upper limit, it should therefore satisfy itself that the individual is able to make their own care arrangements, or has others who are willing and able to make arrangements for them. Where there is a suitable advocate or representative (in most cases a close relative), local authorities should make available guidance and advice on the availability and appropriate level of services to meet the individual's needs. Where there is no suitable advocate or representative to act on the individual's behalf, it is the responsibility of the authority to make the arrangements and to contract for the person's care.

11. Once an authority has carried out a care needs assessment and determined that an individual requires residential sector care, they should make the necessary arrangements without undue delay. Where it is foreseen that there will be a delay, the authority should ensure that suitable arrangements are in place to meet the needs of the individual and of his or her carer if appropriate. Similarly, where a self-funding resident has capital that has reduced to the £16,000 upper capital limit, as soon as reasonably practicable, the local authority should undertake a community care assessment and, if necessary, take over arrangements to ensure that the resident does not use capital below £16,000.

12. It is recognised that local authorities cannot be aware of the financial circumstances of every self-funding resident. However, information produced by local authorities on the charging arrangements should refer to the upper limit prescribed in the charging regulations and the rights of self-funding residents to financial assistance from the authority when their capital falls to the upper limit of £16,000.

13. Concern was also expressed during the passage of the Bill about the position of people placed by local authorities but who subsequently became self-funding, for example, through the sale of property. If an authority is to end a contract and make the person 'self-funding', they should satisfy themselves that the person is able to manage his or her own affairs or, if not, has someone who can take over the arrangements. Where the person is unable to manage his own affairs and has no one to act for them, it would be for the authority to continue to manage the contract for the resident. The contract should remain a local authority placement. If the person is capable, or has someone to act for them, and the authority decides to terminate its involvement on financial grounds, it must inform the resident or his representative in writing to explain why.. A person placed in a residential home directly managed by a local authority cannot enter into a private contract with the care home manager as a self-funder, as in an independent sector home. They are liable to pay the full cost to the authority of providing the accommodation.

IV VALUATION OF PROPERTY

The valuation of property and expenses of sale 10% disregard

14. Where the LA has placed a charge on a resident's property they should:

(i) carry out, or arrange, a valuation of the property to establish its current market value;

(ii) calculate the resident's remaining interest in the property by deducting 10% for expenses of sale and the amount of any outstanding charge secured on the property from the current market value of the property;

(iii) once the property has been sold, the amount of capital that should be taken into account from the sale of the property is the actual amount of money from the sale minus the actual expenses involved in selling and any debts secured on the property such as a mortgage. The 10% rule is only for the purposes of calculating the value of a property and should not be applied once the property has been sold.

This guidance is contained at paragraph 6.OlOa and 6.0 14 of the SWSG guidance.

V NATTONAL ASSTSTANCE (SUMS FOR PERSONAL REQUIREMENTS) REGULATIONS 1999

Legal basis

15. The amounts that local authorities allow in their charging assessments for personal expenses for people placed in residential 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 accommodation who have preserved rights.

16. 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 1999 is enclosed with this circular.

New PEA Amount From 12 April 1999

17. The new PEA prescribed amount of £14.75 comes into force on 12 April 1999. It applies to everyone in residential care or nursing homes receiving help from local authorities to meet the costs.

18. 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.

VI NEW THERAPEUTIC EARNINGS LIMITS

19. Regulations have been made under the Social Security Act 1975 to increase to £58.00 per week from 12 April 1999 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

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

NOTE
21. Copies of the enclosure to this circular are available to other interested parties by contacting Carol Ann Gray (Telephone 0131 244 5409) at the above address.

Yours faithfully
MRS E LEWIS

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