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Fairer Charging Policies
for Home Care and other non-residentialPage 2
VII. Savings and Capital
42. Councils may take account of a user's savings or other capital in assessing
their resources, but are not obliged to do so.
43. Savings may be taken into account to calculate a tariff income on the same
basis as set out in the Charges for Residential Accommodation Guidance (CRAG)
in LAC(99)9. Users with savings of more than the upper limit be asked to pay
a full charge for the service. These savings levels will be updated automatically
in line with any uplifts in CRAG. Councils may wish to set higher savings limits,
but should not set lower limits.
44. The value of any property
occupied by the user should not be taken into account for charges for non-residential
social services, but other forms of capital may be taken into account, as set
out in CRAG.
45. Consistent with the guidance in CRAG,
ex gratia payments made to former Far Eastern prisoners of war and payments made
under the Vaccine Damage Payment scheme should be disregarded entirely.
46.
Provision should be made for charges to be reviewed, where savings are being used
up by charges.
VIII. Partners' income and savings
47. Section 17 of the HASSASSA Act 1983 envisages that councils will have regard
to a user's means in assessing ability to pay a charge. A user's means may,
in particular circumstances, include resources not held in that person's name,
where the user has sufficiently reliable access to them. The most likely instances
of this kind will arise in relation to married or unmarried couples.
48.
Issues of practicality and fairness arise in respect of the treatment of some
benefits, which are calculated for the needs of a couple, and for jointly held
savings. Where there are joint resources such as this, it may often be the case
that the user has reliable access to them.
49. In cases
where only the user's means are assessed, no assumption should be made that the
whole of that person's disposable income is necessarily available for charging.
For example, Income Support paid at the rate for a couple should not be taken
into account without also taking account of the expenditure needs of both partners.
50. Where a partner's savings are taken into account, savings
for the user and partner together may be taken into account to calculate a tariff
income as described in paragraph 43. The minimum savings levels to be applied
should be those set out in the Charges for Residential Accommodation Guidance
(CRAG) in LAC(99)9. Where users and partners together have savings at the upper
limit in CRAG, the user may be asked to pay a full charge for the service. Jointly
held savings should be treated as divided equally between the owners.
IX. Work incentives
51. The Government's policy is to encourage and enable those who wish to take
up employment, including disabled people, to do so. Charging policies should
avoid creating disincentives to work. Work incentives should be explicitly addressed
in councils' charging policies.
52. Disincentives may be either disincentives
to take work at all, or disincentives to work longer or earn more - neither is
acceptable. Disincentives may arise because many social security benefits are
income-related and so are withdrawn as earnings rise. For example, both Housing
Benefit and Council Tax Benefit are withdrawn steeply as earnings rise. Both these
effects will be taken into account if councils follow the guidance at paragraph
63.vii below that housing costs and Council Tax should be assessed net of any
Housing Benefit and Council Tax Benefit payable. If either benefit is withdrawn
as earnings rise, increased net housing costs and Council Tax will be reflected
in the assessment of expenditure.
53. Some benefits
such as Income Support are withdrawn when there is more than a limited weekly
amount of employment. The requirements that charges should not reduce users' incomes
below basic levels of Income Support, and to take specific account of users' expenditure,
including disability-related expenditure, should help to minimise any disincentives
to work arising, particularly for low earners.
54.
Beyond these provisions, the guiding principle of charging policies should be
that those in work should retain the majority of any benefit from entering work
or from increased earnings.
55. In all cases, no more than a maximum
of 55% of net earnings should be included within any calculation of total income,
to be offset against expenditure.
Independent Living Funds
56. Current Independent Living Fund (ILF) policy is to disregard earnings up
to £30 weekly, to take account of 55% of earnings between £30 and
£200, and to take account of all earnings above £200.
57. Where a package
of care is jointly funded by the ILF and social services, earnings should not
be taken into account in any assessment of charges for non-residential social
services.
58. ILF charges should be taken into account
as expenditure in any assessment of ability to pay charges for non-residential
social services. In practice, this.14 will usually mean that no charges are payable
for non-residential social services where there is a package of care jointly funded
with the ILF.
X. Setting the Level of Charges
59. This guidance is concerned mainly with setting boundaries of fairness for
the assessment of users' ability to pay charges. The requirement for charges
to be reasonable concerns also what may reasonably be charged, having regard
to the costs of the service provided to the user.
60. Councils
should take account of the full cost of providing the service, excluding costs
associated with the purchasing function and the costs of operating the charging
system. There is no presumption that the full cost of a service must be charged
to users able to pay. It is a matter for councils to decide whether to levy a
contribution to costs or to seek to recover full costs, where possible. Councils
will need to consider inter alia whether to use the levels of charge to target
subsidy at priority users or services and whether charging full costs for some
users will create perverse financial incentives for them to enter residential
care.
61. Charges which reflect the costs of services
provided to users and are based on hours of service provided are generally preferable
to charges based on broad 'usage' bands, which can create perverse incentives
and spread subsidy unfairly.
62. Where the costs of
services vary within the council's area, eg, because providers' costs vary, it
is for the council to decide whether charges should reflect the cost differences
or whether to have a notional average charge for all users with the same means.
XI. Summary of Issues in Design of Charging Policies
63. In summary, councils need to consider the following issues in designing
a charging policy:
i. As discussed
at paragraph 13, flat rate charges or charges which do not vary with the level
of service may be acceptable in limited circumstances (but are more generally
acceptable for meals at home or in day care, where these charges substitute for
ordinary expenditure). The level of charge will need to be set low in order to
avoid reducing users' incomes below basic levels of Income Support. Councils will
need to establish what is a reasonable level of charge through consultation. In
no case, however, (other than for meals at home) should charges be levied on users
whose sole income is Income Support/JSA-IB or those with similar levels of income..15
ii. For most councils' charging policies, which are expected
to be more sophisticated, councils should consider how to ensure that users' net
incomes are not reduced below basic levels of Income Support (whether they are
receiving Income Support or not). For users who have income other than Income
Support/JSA-IB or in addition to Income Support/JSA-IB, councils should consider
means tests, which have regard to the effects of any charge on users' net incomes.
iii. Means tests should take detailed account of any disability-related
expenditure, particularly where disability-related benefits are taken into account
as income. Councils will need to consider how far this should happen where disability-related
benefits are not part of a user's income.
iv. A buffer
should be set of not less than 25% above Income Support personal allowances and
premiums. This provides an additional safeguard to ensure that users' incomes
are not reduced below basic levels of Income Support. This is particularly important,
if an overriding maximum charge is not set. There may be some risk, otherwise,
that users with high intensity needs and consequently high charges would find
their incomes reduced to unacceptably low levels.
v.
In any event, councils should consider whether to set an overriding maximum charge.
In some councils, this is set at a proportion of typical local residential care
charges, to ensure that no perverse financial incentive is created for users to
leave their own homes. vi. Councils will want to have regard to any implications
for administrative costs and staffing in deciding on a charging policy. Charging
models, which involve detailed assessment of users' expenditure, may have initial
costs, including those of staff recruitment and training. Councils running such
policies (as described in the Annex to the consultation paper) have found that
employment of specialist finance staff for assessment may produce more accurate
assessments quickly and free care managers for work directly related to their
expertise. Specialist staff should also be able to offer Welfare Rights advice
at the same time as carrying out assessments. In some cases, this may help users
to claim previously unclaimed benefits.
vii. Income
should be assessed net of any Income Tax and National Insurance contributions
payable. Housing costs and Council Tax should be assessed net of any Housing Benefit
or Council Tax Benefit payable. This should help to minimise any "poverty trap".16
effects or work disincentives arising from withdrawal of Housing Benefit or Council
Tax Benefit when a user's income increases.
viii. Councils will need
to consider how to treat savings and capital and partners' income and savings,
as discussed in sections VII and VIII.
ix. A maximum of 55% of net earnings
should be included within any calculation of total income, to be offset against
expenditure. Section IX discusses other steps needed to avoid creating disincentives
to work.
x. Councils will need to consider how to set the levels of
charges in relation to the costs of the services provided to users.
xi.
The Government expects all councils to explain how these issues will be addressed
as part of consultation with users and carers on their charging policies.
XII. Charging Carers
64. Users may be charged only for services provided to them and carers only
for services provided to them. Councils may not decide that a carer is the service
recipient, and therefore subject to a charge, purely on the grounds that a user
is exempt from charges or has an assessable income less than that of the carer.
65. Where users and carers are
spouses or partners and both are receiving services, the guidance in Section VIII
should be followed. All other parts of this guidance apply to charges for services
provided to carers.
XIII. Direct Payments
66. In considering whether, and if so how, to ask an individual to make a financial
contribution to the cost of their care package, councils should treat people
receiving direct payments as they would have treated them under the council's
charging policy, if those people were receiving the equivalent services. Charges
should be assessed and made in all respects in accordance with this guidance.
67. Councils should refer to the Community Care (Direct
Payments) Policy and Practice Guidance for specific guidance on direct payments
including making direct payments net or gross of any financial contribution.
XIV. Use of Powers to transfer funds.
68. Councils are allowed to charge for services up to the level that the services
cost. Local councils and health authorities may jointly commission social care
services under section 28A of the NHS Act 1977. The details of any charges should
be devised with advice from the local council's own lawyers. The council may
recover from users up to the full cost of the social care service, even though
the NHS may have met some or all of the cost of the social care service. Local
councils must, however, bear in mind that section 17 of the HASSASSA Act 1983
is not a provision designed to enable them to raise general revenue. If a council
purchases social care and a health authority purchases health care services
from the same provider, then charges to uses may only be made for the social
care element.
XV. Health Act 1999 Partnerships
69.
The Health Act 1999 did not alter the local authority powers to charge in the
event of a partnership arrangement. In agreeing partnership arrangements, agencies
will have to consider how best to manage charging (where local councils charge
for services) and how to clarify the difference between charged-for and non-charged
for services. There is no intention to increase or expand charging arrangements
through the Partnership Arrangements. In entering into an arrangement, the partners
will need to agree on the approach to be taken on charging. Liberal Democrat
70. Partners will need to bear in mind that, where charging
is retained, the arrangements will need to be carefully explained to users of
services, to avoid any misunderstanding that NHS services are being charged for,
especially when an NHS Trust is providing a service, part of which is being charged
for. It will be critical that charging arrangements are properly explained at
the outset of the assessment process. See section XVII below. The existing charging
review or appeals mechanisms should be made clear to the user.
71. The NHS Plan makes clear (in the Government's response to the Royal Commission
on Long Term Care) that community equipment services should be integrated across
health and social services by 2004, using the partnership flexibilities in the
Health Act, 1999. Local councils will retain the right to charge for providing
disability equipment, but will need to consider the cost-effectiveness of doing
so within the new integrated community equipment services.
XVI. Intermediate Care
72. Separate guidance is being issued about charging arrangements for intermediate
care. Councils should have regard to that guidance where a time-limited package
of intermediate care includes the provision of non-residential social services.
XVII. Management of charges and charging policies
73. This section summarises some issues in the management of charges and charging
policies. The advice on these issues is not comprehensive, but draws on advice
in the Audit Commission study Charging with Care (May 2000) and advice issued
by the former Association of County Councils and Association of Metropolitan
Authorities (Discretionary Charges, a good practice handbook) (July 1996).
74. It is important for councils
to get the key processes right if development of policies is to be well informed
and local users are to understand and accept charging policies. A good practice
'checklist' from Charging with Care, covering both the design of policies and
their management is reproduced at Annex C.
Information about charges
75. Clear information about charges and how they are assessed should be readily
available for users and carers. Local Better Care, Higher Standards charters
should include this information. Information should be made available at the
time a person's needs for care are assessed.
76. Once a person's care
needs have been assessed and a decision has been made about the care to be provided,
an assessment of ability to pay charges should be carried out promptly, and information
about any charges assessed as payable, and how they have been calculated, should
be communicated promptly. This should normally be done before sending a first
bill. Charges should not be made for any period before an assessment of charges
has been communicated to the user. A first bill for a charge for a lengthy past
period can cause needless anxiety. Any increase in charges should also be notified
and no increased charge made for a period before the notification.
Access to care and assessment of ability to pay charges
77. Assessment of a person's need for care should not be confused with financial
assessment of a person's ability to pay a charge. Once someone has been assessed
as needing a service, that service should not be withdrawn because the user
refuses to pay the charge. The council should continue to provide the service,
while pursuing the debt, if necessary.
Consultation
78. Consultation with users and carers about charging policies and increases
or changes in charges should follow good practice advice, for example, the National
Consumer Council's Involving Users: Improving the Delivery of Local Public Services.
Consultation is one of the main principles, which should guide councils' Best
Value reviews of local services.
Reviews and Complaints
79. Section 17(3) of the HASSASSA Act 1983 gives a user the right to ask the
council for a review of the charge which has been assessed, if the user considers
that he/she cannot afford to pay it. Under the legislation, the council must
be satisfied that the user's means are insufficient to pay the amount they would
otherwise be charged, before deciding to reduce or waive a charge.
80. It is important that any request to review a charge is carefully considered.
The fairness of the charge should be considered in the light of the individual's
financial circumstances and in relation to the position of other users and charge
payers. The review may need to go beyond considering whether the assessed charge
accords with the terms of the council's policy, since it is unlikely that policies
will be able to make provision for all conceivable personal circumstances.
81.
Information for charge payers should make clear that they may either seek a review
of their assessed charge, or they may make a formal complaint if they are dissatisfied
with any aspect of the assessment. Councils will need to consider how best to
make the facility for a review accessible to users and how to ensure consistency
in decisions. Useful advice is included in Discretionary Charges, a good practice
handbook, published by the former Association of County Councils and Association
of Metropolitan Authorities.
82. As part of strategic
management of charging policies, councils need to have regard to the costs of
administering charges. This issue should be a consideration in the initial design
of charging policies. Councils should collect information on the costs of administration
and should monitor this. Comparison of administration costs should form part of
Best Value reviews considering charging policies.
83.
Procedures for verification of claims and for countering fraud should be considered
in the design of charging policies and should be built into the assessment and
administration of charges..
Strategic Management of Charging Policies
84. Charging with Care stresses the need for good strategic management of charging
policies. Charging policies should be consistent with the council's service
policies. They should not operate against the Government's policy agendas for
social care, to promote independent living and social inclusion. It is important
that consideration of charging policies is not purely budget based, but takes
account of service needs. The design of charging policies needs to be sensitive
to the variety of users' circumstances and needs. The ways in which charging
policies are developed also need to be sensitive and to involve users and carers.
85. The need for strategic
management of charging policies implies a need for monitoring, for example, of
any users refusing services or part services because of charges, and of users
falling into arrears. Service managers need to have access to this information.
86. Charging with Care identifies five categories of performance information
needed to help councils to manage the service and charges, to ensure they are
responsive to users' needs. These are: - client numbers and service levels -
clients refusing/cutting down on services as a result of charging, or asking
for charges to be reviewed - levels and reasons for arrears - levels of client
incomes, in particular the take-up of different benefits - cost of collection
as a percentage of income
87. In reviewing charging policies, councils should take account of the further
advice included in the good practice 'checklist' at Annex C..21 ANNEX A Section
17 of the Health and Social Services and Social Security Adjudications Act 1983
Charges for local authority services in England and Wales 17.
(1)
Subject to subsection (3) below, an authority providing a service to which this
section applies may recover such charge (if any) for it as they consider reasonable.
(2) This section applies to services provided under the following enactments-(
a) section 29 of the National Assistance Act 1948 (welfare arrangements for
blind, deaf, dumb and crippled persons etc.); (b) section 45(1) of the Health
Services and Public Health Act 1968 (welfare of old people); (c) Schedule 8
to the National Health Service Act 1977 (care of mothers and young children,
prevention of illness and care and after-care and home help and laundry facilities);
(d) section 8 of the Residential Homes Act 1980 (meals and recreation for old
people); and (e) paragraph 1 of Part II of Schedule 9 to this Act [other than
the provision of services for which payment may be required under section 22
or 26 of the National Assistance Act 1948].
(3)
If a person-( a) avails himself of a service to which this section applies, and
(b) satisfies the authority providing the service that his means are insufficient
for it to be reasonably practicable for him to pay for the service the amount
which he would otherwise be obliged to pay for it, the authority shall not require
him to pay more for it than it appears to them that it is reasonably practicable
for him to pay.
(4) Any charge under this section may,
without prejudice to any other method of recovery, be recovered summarily as a
civil debt..
DLA acts as a passport to the severe and
enhanced disability premiums. Thus, severe disability premium (SDP) is paid only
if the claimant also receives the middle or highest rate care components of DLA.
Enhanced disability premium (EDP) is only due if the claimant is receiving the
highest rate care component of DLA. SDP also has other conditions; the claimant
must not be cared for by someone who is receiving ICA for caring for him/her and
the claimant must be living alone (though there is a list of people who don't
count for the living alone condition, such children under 18). When a person turns
60, the disability and enhanced disability premiums are replaced by the highest
rate of pensioner premium (from April 2001, the only rate of pensioner premium).
SDP and DLA will continue in payment so long as conditions of entitlement still
exist. The Income Support carer premium is paid if the carer or partner are in
receipt of Invalid Care Allowance (ICA), or claimed ICA after 1 October 1990 but
could not be paid it because the person who claimed it was already receiving a
higher benefit. If both partners satisfy one of these conditions both can get
the carer premium..
ANNEX C 'A Best Value charge?':
a checklist for councillors and managers [based on Charging with Care, Audit Commission,
May 2000, Table 2] A number of questions will help councils to review how their
approach to charging for home care compares with best practice.
Meet
the needs of users Open communication and consultation · Does meaningful
consultation take place over the design and management of charges? Do managers
know users' key concerns? · Do users know that they can ask for charges to
be reviewed or waived? Are such systems accessible to all? Is how to find out
more or seek advice? · Are forms, letters and leaflets well designed (easy
to follow, adequate print size, community languages)? · Are users told why
information is required and given assurances over confidentiality? Ensuring users
are able to pay: · Is the council effectively promoting benefits take-up
by new and existing users? Is expert advice available to help users maximise their
income? · Are users given a record of the assessment that explains how their
charge has been calculated? Do users understand how/if their charge would change
if their needs or means changed? · Is it clear how costs of disability have
been taken into account? Will users know when they should ask for a review of
their charges? · What happens when users cut down or withdraw from services?
Are the reasons identified? What help is offered? · Does the council pro-actively
monitor arrears to identify if users may be having difficulties paying, and initiate
action to help tackle problems?.
Manage performance effectively. Is key performance information gathered and
acted upon? Are targets set and published? · Are financial assessments
carried out efficiently? Are they accurate and are users made aware of the results
as soon as possible? · Are users billed promptly and accurately? ·
Do managers monitor the impact of charges on users (users cutting down on services
or building up arrears)? Are charges managed efficiently and effectively? ·
Are managers aware of the costs of charging? · Have the costs of charging
been minimised by careful review of assessment processes, and methods of billing
and payment? · Could links be improved between finance and care management
systems? Do different staff (social services, finance, welfare rights, care
providers) work together effectively? · Are variations in services processed
promptly and accurately? · Are staff adequately trained, so that users
are treated consistently and sensitively?
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