The Care Bill, Financial Information and Advice and Dementia

Chris Horlick, Chairman

PayingForCare Ltd

Awareness: expectations & understanding

34% of consumers believe that ‘Care is free like the NHS’ 1

Only 21% of self funders approach their Local Authority

33%+ of over 75s have not even discussed how they will pay for their long term Care 2

95% believe the social care system is difficult to navigate 3

Source: 1 ABI Q4 2011 2 Mintel Feb 2013 3 Counsel and Care survey 2010

Awareness: expectations & understanding

76% have never heard of any care funding products 4

43% of all residents of care homes are self funders 5

800,000 people in the UK with Dementia 6

80% of people in care homes have dementia or memory loss 6

Source: 4 GfK NOP survey March 2010 5 Laing & Buisson 6 Alzheimer's Society

People with Dementia and self-funders in context

800,000 people with Dementia in the UK and 43% of all people self fund their care i

Therefore 344,000 people with Dementia will self fund their care

Fewer than 10% of all people in care get qualified financial advice ii

25% of self funders will entirely deplete their wealth to care costs iii

Source: i Laing & Buisson – Care of Elderly People UK Market Survey 2012/13 ii Oliver Wyman survey 2009/10 iii LGiU Independent Ageing Council Support for Self Funders March 2011

People with Dementia and self-funders in context

Greater longevity in care

More in residential care

Higher costs

Greater need for financial advice

Potentially less capacity to grasp the detail

Powers of attorney

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1

What does the Bill do?

Clause Commentary

Embedding the principle of wellbeing

1 Embeds the promotion of individual wellbeing as the driving force behind care and support

Reflecting broader local responsibilities

2-7 Provisions which focus on more universal, population-level activities, including general duties on councils to:•Provide information and advice•Promote the diversity and quality of local services •Cooperate with the other local organisations, and work to integrate services to promote wellbeing•Provide services to prevent , delay or reduce people’s need for care and support.

Starting the care journey: assessments and eligibility

8-16 Sets out the process of assessments for both those who need care, and carers. The clauses set out the eligibility framework, with regulations on what constitutes eligible need, and how decisions on support are made. They also leave open the option to establish national eligibility in the future.

Clause 16 allows for regulations requiting councils to offer deferred payment on a universal basis.

Clear entitlements to care and support

17-22 These clauses seek to create a single route through which consistent entitlements to care and support can be established.

The clauses also clarify the circumstances in which care and support may not meet needs – such as when the responsibility rests with another organisation.

What does the Bill do?

Clause Commentary

Care planning and personal budgets

23-30 These clauses set out what must happen after an assessment has been conducted, including the care and support planning process for agreeing how eligible needs will be met. As part of this process, the requirement of personal budgets to help people understand the cost of meeting their needs, and what public funding is available to them, will be part of the legislation.

Moving between areas 31-33 These clauses deal with “portability” arrangements to ensure an individual's care and support is not interrupted by virtue of moving from one part of the country to another.

A new framework for adult safeguarding

34-38 Included in the draft bill is the first ever statutory framework for adult safeguarding, which sets out councils' responsibilities and those of the organisations they work with.

Transition from children to adult services

39-44 These clauses give councils the powers to assess children, young carers, and the carers of children, under the adult statute.

Other provisions 45-53 A number of other important provisions are covered in these clauses including:•An update of council powers to recover debts•Restating and rationalising the provisions which focus councils and the NHS on reducing delayed discharges•Allowing the Secretary of State to issue guidance to councils in relation to their functions in this bill•Giving councils new powers to delegate some of their care and support functions to other organisations.

The Care Bill

Cash

Investment

Insurance

Mortgage / property

The State

“we don’t need to worry now because we will only have to find £72k - and the state will pick up the rest of the cost…..”

Clarity or Complexity: the £72k ‘Cap’  Weekl

y CostYear 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

TOTAL £700

Excess above Local

Authority Rate

£200

                   

Local Authority Rate less

Living Costs

£269

                

   

Living Costs £231

                   

Assumes £700 per week cost of care

Assumes £500 per week local authority rate

Key    Self-funded for life  Contribution limit, i.e. Dilnot Cap to

£72K  State Funding support

Immediate needs annuity

Care Funding Plans

Value of investment year 1£189,000 £108,831£176,190 £115,361£161,404 £122,282£144,463 £129,619£125,175 £137,396£103,332 £145,640£78,709 £154,379

234567

1: Invest £200k1: Invest £200k

Property revenue

Fees to pay = £23k esc 5% pa

2: Partnership2: Partnership

Purchase Care Plan £97,329

How do you pay for Care?

For illustration purposes only. The growth rates used  assume the FSA mid rate of 6% net of any charges. It is assumed that the cost of care is  paid for via withdrawals from investment and escalate at  5% pa verses purchasing an INA and investing the balance of £200,000. This forecast is not a reliable indicator of future performance and investments may grow at a higher or lower rate than that assumed. Higher returns than that assumed would mean that capital would erode more slowly. However, low investment returns would mean a quicker erosion of capital.

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……“my advice is you should get some advice”

Tools

PayingForCare enquiries “air-gap”

Advisers

Advisers

Charities and 3rd sector

Residential care providers

Local Authorities

Care associations

Domiciliary care providers

Advisers

Advisers

Advisers

Advisers

Care/Health information services

Enquiries in to PayingForCare from service users of:

Enquiries out to qualified, experienced and regulated

specialist care fees financial advisers

General AdviceGeneral Advice Regulated AdviceRegulated Advice

Care advocacy services

Hospital discharge services

On-going quality and outcome measurement

PayingForCare Partners include:

Local

Thank you