Financial assessments and chargesCare and Support Statutory GuidanceCare and Support Statutory GuidanceCare and Support Statutory GuidanceCare and Support Statutory GuidanceCare and Support Statutory GuidanceCare and Support Statutory GuidanceCare and Support Statutory GuidanceCare and Support Statutory GuidanceCare and Support Statutory GuidanceCare and Support Statutory GuidanceCare and Support Statutory GuidanceCare and Support Statutory GuidanceCare and Support Statutory GuidanceCare and Support Statutory Guidance
Statutory machinery
11.1Unlike most NHS care, social care is not in general a free service. Prior to the Care Act 2014 there was different machinery for care home charges (section 22 of the National Assistance Act 1948) and home care charges (under section 17 of the Health and Social Services and Social Security Adjudications Act 1983). That is reflected in the division of cases below, into care home and home care charging cases. Part 1 of the Care Act 2014 unifies these two charging regimes for adults into a single statutory code, while preserving the main differences between the two previous schemes. The main provisions are:
•sections 14, 17, 26, 30, 34–36 and 69–70 of the Care Act 2014;
•the Care and Support (Charging and Assessment of Resources) Regulations 2014;
1SI No 2672. •the Care and Support and After-care (Choice of Accommodation) Regulations 2014;
2SI No 2670. •the Care and Support (Deferred Payment) Regulations 2014;
3SI No 2671. •Chapters 8 and 9, and Annexes A to F, of the Care and Support Statutory Guidance.
Charging policies
11.2Within the parameters of the statutory scheme, local authorities continue to have a discretion whether to charge for care services and how to frame local charges, in particular in relation to non-residential services. Therefore, it will be necessary for local authorities to continue to review their charging policies (subject to consultation, discharge of the public sector equality duty (PSED) and publication – see paragraph 8.45 of the Care and Support Statutory Guidance).
11.3In setting their charging policy, local authorities must have regard to the advice contained in the Guidance, in particular, that:
•care home residents are expected to contribute most of their income, excluding earnings (paragraph 8.35);
•in relation to non-residential charges, local authorities should not simply adopt the minimum income threshold but consider setting a maximum percentage of disposable income available for meeting charges and/or a maximum charge, based on a percentage of care home charges in the local area (paragraphs 8.46–8.55);
•charging for support to carers may be a false economy and it may be inefficient systematically to charge carers (paragraphs 8.50–8.55);
•local authorities should be alive to special circumstances in which a mechanical application of minimum income thresholds may have unreasonable effects in individual cases (paragraphs 8.45–8.64).
11.4As the Care and Support Statutory Guidance explains, at paragraph 8.2, ‘The overarching principle is that people should only be required to pay what they can afford’.
What charges may cover
11.5By virtue of section 14(1), (2) and (4) a local authority may charge for the cost of meeting needs under sections 18–20 of the Care Act 2014, but not for the cost of putting in place arrangements for meeting those needs, except in the special cases considered below.
Charging the cost of meeting needs
11.6This applies where a local authority:
•meets the eligible needs of adults who are ordinarily resident, or of no settled residence;
•meets the eligible needs of adults who are ordinarily resident elsewhere;
•meets an adult’s non-eligible needs;
•meets the eligible needs of carers who are ordinarily resident, or of no settled residence;
•meets the non-eligible needs of carers or the eligible needs of carers who are ordinarily resident elsewhere.
Charging the cost of meeting needs and making arrangements
11.7In special cases, by virtue of sections 14(1) and (2), and regulation 5 of the Care and Support (Charging and Assessment of Resources) Regulations 2014, a local authority may charge for the cost of meeting needs under sections 18–20 and, also, for the cost of putting in place arrangements for meeting those needs. This applies where:
•an adult’s resources are above the ‘financial limit’ (see paras
11.10–
11.15 below) but they ask the local authority nonetheless to meet their needs;
•a carer’s resources are above the ‘financial limit’, but they ask the local authority nonetheless to meet their needs; or
•the local authority is to meet the carer’s needs by providing care and support to the adult, and the adult’s resources are above the ‘financial limit’, but they ask the local authority nonetheless to meet their needs.
Services for which no charge may be made
11.8Local authorities may not charge for the services referred to at paragraph 8.14 of the Guidance:
•assessments;
•community equipment and minor adaptations, intermediate care, re-ablement for up to six weeks and care for CJD sufferers (exempted by regulations 3 and 4 of the Care and Support (Charging and Assessment of Resources) Regulations 2014);
•services provided under other legislation, such as after-care services under section 117 of the Mental Health Act 1983 (see para
19.111).
11.9In addition, local authorities may not charge carers for support provided under section 20, by way of providing care and support for the adult (section 14(3)).
Financial assessments
11.10In essence, where a local authority’s policy is to levy a charge for a particular service, it has to undertake means-testing (a ‘financial assessment’) to ensure that no one is required to pay more than they can afford: as the Care and Support Statutory Guidance explains, at paragraph 8.2, ‘The overarching principle is that people should only be required to pay what they can afford’.
11.11Where a local authority has determined that an adult or carer has needs for support that it would charge for, if it met them, then it must complete a financial assessment in accordance with the Care and Support (Charging and Assessment of Resources) Regulations 2014 and provide the adult/carer with a copy (section 17). A financial assessment is an assessment of the adult’s/carer’s financial resources and their ability to pay charges (section 17).
11.12The detailed machinery of financial assessments is set out in the Care and Support (Charging and Assessment of Resources) Regulations 2014 and Annexes A to F of the Care and Support Statutory Guidance.
The ‘financial limits’ and their effect
11.13The three critical concepts are:
•the ‘financial limit’ (also known as the ‘upper capital limit’), which is the amount of capital a person may have, beyond which they will not be entitled to local authority provision of home care ‘at cost’, or local authority care home provision at all;
•the ‘lower capital limit’, which is the level below which a person’s capital is disregarded for these purposes;
•the amount of income that all persons must be left with, after means-testing and charging.
11.14The ‘financial limit’ is currently £23,250.00 (regulation 12 of the Care and Support (Charging and Assessment of Resources) Regulations 2014) whereas the ‘lower capital limit’ is currently £14,250.00 (Guidance, paragraph 8.12):
•a person whose resources fall below the ‘financial limit’ is entitled to means-tested services ‘at cost’;
•means-testing must disregard a person’s capital below the ‘lower capital limit’.
11.15Where a person’s capital exceeds the ‘financial limit’:
•the local authority has a power, but is not under a duty, to make care home arrangements, if requested to do so (see regulation 12(1) of the Care and Support (Charging and Assessment of Resources) Regulations 2014 and the Guidance, at paragraph 8.56);
•otherwise, they are entitled to require the local authority to make arrangements to meet their needs, although the local authority may charge for both the cost of meeting the needs and the cost of making the arrangements and the person will not be entitled to any financial assistance (sections 14(1) and (2) of the Care Act 2014 and regulation 6 of the Care and Support (Charging and Assessment of Resources) Regulations 2014).
Protected income
11.16As far as concerns income, a local authority may not charge insofar as the effect of charging would be to reduce the applicant’s income below:
•£24.40 per week (for care home residents); or
•income support plus 25 per cent, plus various premiums (other cases)
(section 14(7) of the Care Act 2014 and regulations 6 and 7 of the Care and Support (Charging and Assessment of Resources) Regulations 2014).
‘Deemed’ and ‘light touch’ financial assessments
11.17In addition to full financial assessments, provisions is made, at regulation 10 of The Care and Support (Charging and Assessment of Resources) Regulations 2014, for ‘deemed’ financial assessments:
•where the applicant refuses to co-operate;
•where the case is ‘open and shut’ and with the applicant’s consent the local authority decides not to charge;
•where the case is ‘open and shut’ and with the applicant’s consent the local authority decides to make a charge.
The last two types of care are referred to in the Guidance as ‘light touch’ financial assessments.
Personal injury awards
11.18The starting point is that such awards fall to be disregarded for the purpose of means testing. Further information is provided below in chapter 13 on ‘Local authorities and tortfeasors’.
Deprivations of capital
11.19In some cases, persons try to avoid paying for care and support by depriving themselves of assets. In such cases, the local authority may (i) charge the person concerned as if they still possessed such assets; (ii) seek to recover the lost income from the person to whom such assets were transferred; and/or (iii) use its powers to recover lost income from the person concerned. What the local authority cannot do, is cease to provide a service to meet ‘eligible needs’.
11.20Regulations 17 and 22 of the Care and Support (Charging and Assessment of Resources) Regulations 2014 require local authorities to take into account income and capital of which a person has ‘deprived themselves for the purpose of decreasing the amount they may be liable to pay towards the cost of meeting their needs for care and support, or their needs for support’.
11.21The Guidance advises about deprivation of assets at paragraphs 8.27–8.30 and Annex E.
11.22Paragraph 5 of Annex E reminds local authorities that ‘the overall principle should be that when a person has tried to deprive themselves of assets, this should not affect the amount of local authority support they receive’.
11.23Paragraphs 11 and 23 of Annex E then summarise the case-law relevant to the deprivation of capital as follows:
11. There may be many reasons for a person depriving themselves of an asset. A local authority should therefore consider the following before deciding whether deprivation for the purpose of avoiding care and support charges has occurred:
(a)Whether avoiding the care and support charge was a significant motivation;
(b)The timing of the disposal of the asset. At the point the capital was disposed of could the person have a reasonable expectation of the need for care and support?; and
(c)Did the person have a reasonable expectation of needing to contribute to the cost of their eligible care needs?
12. For example, it would be unreasonable to decide that a person had disposed of an asset in order to reduce the level of charges for their care and support needs if at the time the disposal took place they were fit and healthy and could not have foreseen the need for care and support.
11.24Paragraphs 18–23 of Annex E explain how to charge a service user who has deprived themselves of capital or income, and who is to be treated as continuing notionally to possess that capital or income, and how to recover charges from third parties.
11.25Annex E advises local authorities more widely on the various methods of recovering debts from service users.
Financial assessments and personal budgets
11.26Sections 25(1)(a) and 26 of the Care Act 2014 require a care and support plan for an adult to include a personal budget (see paras
9.36–
9.44 above, on personal budgets). After the financial assessment concludes, the adult is given a personal budget showing the local authority’s cost of meeting their needs and (separately) their eligible needs, the payments required from the adult and the payments to be made by the local authority.