1. Charging and financial assessment
Care Act 2014
This overview forms part of the suite of learning materials that have been developed to support the implementation of part one of the Care Act These materials summarise and explain the ‘Care and Support Statutory Guidance’ (October 2014) [“the guidance”] and are designed to help those involved in care and support services to understand and implement the Act.
This presentation is an overview of charging and financial assessment. It is intended for anyone who would like to know more about chapter 8 of the statutory guidance.
There is an accompanying open learning workbook as well as a full presentation on this topic area.

2. Introduction
The local authority may charge people for care and support services, and for arranging them, but some services must be free of charge
The local authority must carry out a financial assessment if it is going to charge for services, but a ‘light touch’ financial assessment may be appropriate in some circumstances
Charges are subject to limits, which depend on whether someone is receiving care in a care home, their own home, or another setting
Top-up fees can be charged if a person chooses a more expensive residential care option
Debts may continue to be recovered under the new legal framework
The Act provides a new, single legal framework for charging for care and support. This means that from April 2015 the guidance provided by Charging for Residential Accommodation Guidance (CRAG) 2014 and Fairer Charging Policies for Home Care and other non-residential Social Services (2013) will cease to apply.
The Act enables a local authority to decide whether or not to charge a person when it is arranging to meet a person’s care and support needs or a carer’s support needs, except in some instances where the local authority is required to arrange care and support for free e.g. intermediate care for up to 6 weeks.
Where an authority decides to charge, it must follow the regulations and have regard to the principles outlined in the statutory guidance. How much a person will be charged will depend on the outcome of a financial assessment and is means tested. In some circumstances a ‘light touch financial assessment’ will be appropriate – more of that in a moment.
Regulations determine the maximum amount a local authority can charge a person and the detail of how to charge is different depending on whether someone is receiving care in a care home, or another setting. There is a greater variety of charging approaches allowed when a person is not in a care home. Therefore, local authorities should develop and maintain a policy setting out how they will charge people in settings other than care homes.
People can choose to pay a top up fee if they want a more expensive residential care option – more on this later.
A key change in the Act is to local authorities’ powers to recover money they are owed for arranging care and support for a person – more on this later too.

3. Financial assessment
In a financial assessment, both capital and income must be assessed, which will be either disregarded, partially disregarded or included
Some capital and income must be disregarded and local authorities have discretion to disregard assets in some other circumstances. For example:
the value of a person’s main or only home must be disregarded where they are receiving care in a setting that is not a care home
to help encourage people to remain in or take up employment earnings from current employment must be disregarded
If a local authority has chosen to charge a person for a service it is arranging it must undertake a financial assessment – sometimes referred to as a means test – to establish how much a person should contribute towards the cost of providing services to meet their assessed needs.
When undertaking a financial assessment, a local authority must assess the income and capital of the person. In a financial assessment income and capital will be either:
disregarded (ignored)
partly disregarded, or
included in the calculation.
Two key disregards are given here as an example: property and earnings.
Property must be disregarded in certain circumstances. For example the value of a person’s main or only home must be disregarded where the person is receiving care in a setting that is not a care home. A local authority may also use its discretion to apply the property disregard in other circumstances, for example where the property is the sole residence of the elderly companion of the person who is now in a care home.
To help encourage people to remain in or take up employment, with the benefits this has for a person’s wellbeing, earnings from current employment must be disregarded when working out how much they can pay.

4. ‘Light-touch’ financial assessments
A local authority may choose a ‘light touch financial assessment’ for instance where:
The person has significant financial resources, and does not wish to undergo a full financial assessment for personal reasons
There is a small or nominal charge for a particular service, and carrying out a financial assessment would be disproportionate
An individual is in receipt of certain benefits
If the authority chooses to do so the person must be informed that they have the right to request a full financial assessment should they so wish
In some circumstances, a local authority may choose to treat a person as if a financial assessment had been carried out, but without doing one; this is called a light touch financial assessment.
The main circumstances in which a local authority may consider carrying out a light-touch financial assessment are:
Where a person has significant financial resources, and does not want to undergo a full financial assessment for personal reasons, but wishes nonetheless to access local authority support in arranging their care. In these situations the local authority may accept other evidence in lieu of carrying out the financial assessment and consider the person to have financial resources above the upper limit.
Where the local authority charges a small or nominal amount for a particular service (e.g. for subsidised services) which a person is clearly able to meet and carrying out a financial assessment would be disproportionate such as for support for a carer
When an individual is in receipt of benefits which demonstrate that they would not be able to contribute towards their care and support costs. This would include jobseekers allowance.
If the local authority decides to do this it must inform the person that a light-touch assessment has taken place and make it clear that the person has the right to request a full financial assessment should they so wish e.g. if there is a dispute about the charges.

5. Information and advice
Accessible information and advice, including:
Independent financial information and advice
Top-ups
Deferred payment agreements
Complaints
The person must be given a written record of the financial assessment which includes an explanation of how it has been carried out and what the charge will be (if any)
The local authority must establish whether the person has the capacity to take part in the care plan and the information disclosure involved in financial assessment
There is a clear link when conducting a financial assessment to the information and advice requirements of the Care Act. Authorities have a duty to provide information and advice about people’s care and support that is accessible such as an easy read version if needed. This applies to financial information and advice and means that the person concerned (or their representative) must be able to understand any financial contributions they are asked to make.
The authority must provide written information to help people to understand care charges (and how to make a complaint about them). In particular, if relevant, the local authority must tell them about the deferred payment scheme, and how it works.
The local authority should facilitate people’s access to independent financial advice when considering ways to pay care and support costs.
If a top-up is to be agreed or is being considered, the local authority should ensure that the person understands the full implications of this choice by providing information to help them understand the terms and conditions of the agreement.
Crucially, if a person lacks mental capacity to take part in a financial assessment, the local authority must establish whether there is someone with legal powers to act on their behalf, and provide information to them.

6. What charges can be made?
How much a person can be charged will depend on whether a person is in a care home or receiving care and support in another setting
Local authorities may charge a carer for support, but they must not charge for ‘replacement’ care and support provided directly to the person the carer supports
Charges should be reasonable and not leave people with less than a specified amount of income
A person can choose a more expensive residential care setting, through a ‘top-up’ from a third party or the resident
A local authority must not charge more than the cost that it incurs in meeting the assessed needs of the person
How much a person receiving care can be charged will depend on whether a person is in residential care or receiving care and support in their own home.
Local authorities are not required to charge a carer for support, but they may do so. (except for care and support provided directly to the person the carer supports). However, before charging carers, local authorities would want to carefully consider the impact that charging might have on the carer e.g. would it reduce the amount they care by and what impact would it have on the carer’s wellbeing?
In all cases, any charges must be reasonable and a person’s ability to meet their charges must be regularly reassessed, to ensure that arrangements are affordable and sustainable.
When a person’s needs are best met in a care home, the local authority must provide for the person’s preferred choice of accommodation by giving them at least one option to choose from that they could afford within their personal budget. This also extends to shared lives, supported living and extra care housing settings. However, a person might choose an alternative, more expensive care home and agree to pay an additional cost, usually known as a top-up. This should only be done if there is genuine choice and not because of a failure of commissioning in the local area. The local authority must ensure that the person paying the ‘top-up’ is willing and able to meet the additional cost, and enters into a written agreement with the local authority, agreeing to meet that cost
When choosing to charge, a local authority must not charge more than the cost that it incurs in meeting the assessed needs of the person. It can only charge an administration fee - relating to arranging care and support – when arranging care for self-funders who have asked the local authority to do so on their behalf.

7. Recovery of debts
The existing powers under S22 of HASSASSA 1983 will no longer apply from 1 April 2015
From then on local authorities must use the provisions under S69 of the Care Act:
Must offer a DPA whenever possible
Ultimately an authority has powers to recover money through the county court
Principles of the approach to debt recovery:
Court action should be the last resort
The local authority should act reasonably
Affordable repayments
Debts and repayments discussed with the person
There are changes to local authorities’ powers to recover money they are owed for arranging care and support for a person. Section 22 of the Health and Social Services and Social Security Act 1983 (HASSASSA) is revoked from April 2015 and no new debts can be recovered under that provision. The Act enables local authorities to institute County Court proceedings to recover debts. However, they should only do so after other reasonable alternatives for recovering the debt have been tried such first.
As a first port of call, a local authority must offer a person the option of a deferred payment agreement (DPA) in order to recover the debt wherever the person could be offered a DPA, and can only make an application to the court should the person refuse. Local authorities are encouraged to use their discretion to offer DPAs to people who do not meet the mandatory acceptance criteria for DPAs. There is a module on deferred payment agreements for more information on this.
In most cases, especially those where the failure to pay the correct charges was inadvertent, there will be other simpler routes to follow, such as agreeing a repayment plan which allows for recovery over time in a way that is affordable and manageable for the person and their family. Even if there is a debt, the local authority will need to consider whether it is appropriate to recover it.
In deciding how to recover a debt, the local authority should consider the circumstances of the case before deciding a course of action e.g. whether it was a deliberate avoidance of payment or due to circumstances beyond the person’s control.