Presentation on theme: "NAFAO Conference 18 th October 2012 Clare Hensman, Social Care Funding Reform Department of Health Social Care Funding Reform: Current state of play."— Presentation transcript:
NAFAO Conference 18 th October 2012 Clare Hensman, Social Care Funding Reform Department of Health Social Care Funding Reform: Current state of play
2 The reform timeframe Social Care Vision _______ Nov 2010 Law Commission Report __________ May 2011 Dilnot Commission Report ___________ July 2011 Caring for our future - engagement _________ Sept - Dec 2011 Care and Support White Paper Progress report on funding Draft Care and Support Bill __________ July 2012 Engagement and pre- legislative scrutiny on draft Bill Legislation Working with partners on funding reform Spending Review
3 The Dilnot Commission identified that people face the prospect of very high care costs with no easy way to protect themselves Expected lifetime costs for people currently aged 65 (2009/10 prices) Source: Dilnot Commission 1 in 4 will have costs exceeding £50k over their lifetime 1 in 10 will have costs exceeding £100k over their lifetime 1 in 4 will have no social care costs
4 The problem most affects people with modest wealth Indicative proportion of assets depleted under the current system for someone with very high residential care costs, by initial level of assets on going into care Source: Dilnot Commission People can end up using over 80% of their assets paying for care Worst affected are people in the middle of the wealth distribution
5 The capped cost model would give people certainty and redefine the responsibility of the individual and the state Expected lifetime costs for people going into care in 2010/11, by percentile Source: Dilnot Commission Lifetime care costs capped at between £25K and £50K Care costs covered by the State, with a cap
6 The capped cost model would cover reasonable care costs People in residential care pay a contribution towards their living costs, if they are able to. This is between £7,000 and £10,000. Care costs up to the local authority rate are counted towards the cap. In addition to this, some people will get means- tested support. Once people reach the cap, the state pays their care costs up to the local authority rate. People who spend more than the local authority rate will have to top up before and after the cap. £ Time
7 The Government has agreed the principles for funding reform Agrees that the principles of the Dilnot Commission recommendations – financial protection through capped costs and an extended means-test – would be the right basis for any new funding model. Intends to base a new funding model on the recommendations if a way to pay can be found - but not in a position to make a commitment now. Final view to be taken at the next Spending Review. Engage with stakeholders on design issues in the interim. Commitment to introduce Universal Deferred Payments from April 2015 – a loan to cover the costs of residential care.
8 Indicative proportion of assets depleted under the current system and different levels of cap in 2010/11 prices for someone with very high residential care costs, by initial level of assets on going into care Source: Progress Report Everyone will benefit from giving certainty over what they and the state will pay. Those with assets between £50k and £200k will benefit most
9 A higher cap (or an option where people opt- in and pay for a cap) could provide a more affordable way to implement the reforms Depending on the level of the cap (set at £100K - £35K), it could cost between £1.6bn and £3.7bn by 2025/26 in 2012/13 prices. Costs are lower in the first few years before people reach the cap and receive state support and the costs increase as the population ages. Costs include the cap, extended means test, contribution to living costs, reform for working age adults and administration costs for LAs The cost of the reform for different variants of the Commission’s proposals in 2010/11 prices with no retrospective counting of the costs of care and parameters uprated in line with the state pension. Costs of the reform shown in constant 2012/13 prices. Source: Progress Report £50k cap, £10k living cost £75k cap, £10k living cost £100k cap, £10k living cost £35k cap, £10k living cost
10 We are currently looking into different aspects of reform, including implementation considerations for LAs. There are a number of areas highlighted in the progress report that require additional thought. These included: –How to implement and transition to a new system –The potential for a voluntary, or opt-in approach –The best approach for working age adults We are working with a range of stakeholders to look into these challenges and to identify solutions.
11 Local authorities will play a key role in delivering the capped cost scheme, and it is important the design is right. The capped cost scheme will build on the existing social care system, in which LAs play a central role: Needs assessment to determine eligible needs and so how much people have counting towards their cap. Financial assessments where appropriate, and provide support to those who cannot afford to pay for all of their own care. Provide support to those who reach the cap, in a similar fashion to support provided to those who cannot afford their care. Administering people’s contribution to general living cost. Recording people’s progress towards the cap, including uprating users progress to the cap as the cap increases with inflation Sharing records between local authorities for portability
12 We would like your views on three key questions: 1.What impact the introduction of a capped cost model will have on LA systems, immediately after introduction and once the system is running? 2.What impact the introduction of a capped cost model will have on the way that “self funders” are treated within the LA system? 3.What is required to ensure portability of people’s progress towards the cap? What difficulties might people moving between LAs cause? What is the biggest challenge of implementing a capped cost system? What could be done to mitigate it, and who should do it?