The Report on the Commission of Funding Care and Support
Otherwise known as…………The Dilnot Commission
Andrew Dilnot (pictured right), the eminent Oxford economist was charged over a year ago to look into the way the elderly fund their care and on 4th July 2011 the Commission he chaired delivered their Report – A fairer funding system for adult social care.
“The day after the report came out I had the opportunity to listen to and question Andrew Dilnot. It was clear that the report is only the first stage and are just recommendations. We now enter a consultation period and this period of engagement will last until Autumn 2011. It is hoped that a White Paper will be forthcoming in the Spring of 2012. Mr Dilnot said at this meeting in Westminster – “the current system is nuts” and regarding the means test by Local Authorities to funding care is the “most ghastly of all the means tests in our current social security system”.
I can only agree with him on these last two points but do have my concerns whether a White Paper will be forthcoming in the Spring of 2012. Firstly we have already had some drift on the original white paper date, originally set for the end of 2011. Secondly, this may well be used as a reason for those to whom the legislation currently affects will take no action. To delay will only cost money for those who need care now. Finally, if and when the legislation does get onto the statute books there is no guarantee that those in care now will benefit. We will have to wait and see.
I welcome the report and very much hope that it will be taken seriously by the current Government as there have been three other significant reports into our Adult Social Care system in the last 14 years; none of which have made very much difference. Our former Prime Minister, Tony Blair, said at the Labour Party Conference in 1997 that he did not want “children growing up in a country where the elderly had to sell their homes in order to fund their long term care”. Well, nothing has changed and it is about time it did.
Among the key recommendations in the report are:
- Should they need care an individuals’ lifetime contributions towards their social care costs – which are currently potentially unlimited – should be capped at £35,000. After the cap i reached, individuals would be eligible for full state support.
- The £35,000 limit of lifetime personal liability is irrespective of where care is received and does not include accommodation costs. People should contribute a national standard amount to cover their general living costs, like food and accommodation, in residential care. This should be set between £7,000 and £10,000 per annum.
- The means-tested threshold, above which people are liable for their full care costs, should be increased from £23,250 to £100,000.
- National eligibility criteria and portable assessments (with an objective assessment scale whereby everyone above a ‘substantial’ care need threshold is supported) should be introduced to ensure greater consistency.
- A new social care statute should place duties on local authorities to provide information, advice and assistance services in their area, and to stimulate and shape the market for services.
- The Government should work in collaboration with the Financial Services Authority and other partners to develop greater support for those seeking information on financial planning for older age.
Paying particular attention to the recommendations in the report, there are three points which have been commonly misunderstood:
- The care costs should be capped at £35,000. The Commission recommended a cap of between £25,000 and £50,000 but the £35,000 is the suggested figure. But this is the figure for care and does not include the residential (or sometimes known as the hotel) costs. Exactly what the care costs are for a resident of a care home charging £800 per week is currently difficult to establish. This, if implemented, will create a sea of change. If the care costs are deemed at £300 pw, then the proposed new cap applies to 116 weeks of care, ie 2 years and 3 months. This is interesting to compare with the figure of the average length of stay in a care home for those who have purchased an Immediate Care Plan of 4 years*.
- The accommodation costs should be set at a maximum of £10,000 per year. This I believe will be very difficult to administer as there is a huge difference in price with the varying quality of homes. There will not be enough room for all at the premium establishments and as a result those who wish to receive this service will no doubt need to pay for it themselves.
- It is very much welcomed that the new Local Authority threshold could go up to £100,000. However, the Local Authority will still have their maximum they will fund on a weekly basis, and if a care home is chosen which is in excess of this then the resident will still be expected to pay.
Moving forward over the next few months, those who are immediately in need of care and are going to have to pay for their own care costs, are going to have to carefully consider the following:
The changes are probably not going to be effective until the end of this Parliament (May 2015)
Most care home costs will mean that individuals will still have to make some contribution
Not to delay in seeking financial advice in this specific area
One part of the Report which I strongly advocate is the recognition of ‘wide access to high quality information and advice which people can trust’. At The Wealth Care Partnership (TWCP) our Care Fees Specialists are Independent and are Society of Later Life Adviser (SOLLA) accredited, or are currently working towards their accreditation. Our Specialists understand the issues facing the elderly and have been providing crucial advice to these people or to their Attorneys for many years. TWCP advisers offer comprehensive advice in a clear and concise manner when addressing long term care funding, pension, investment and inheritance tax planning issues.”
* Source – Partnership
The views expressed here are those of Tim Anstee and do not necessarily reflect those of The Wealth Care Partnership.