Introduction In July 2010, the Coalition Government set up the Commission on the Funding of Care and Support to investigate the problems of the current system of adult social care in England and to develop ideas for reform. The Commission, chaired by Andrew Dilnot published its recommendations on Monday 4th July 2011. The proposals aim to change the way that social care funding is raised and spent, extending entitlement to public funding for social care in a way that is sustainable for taxpayer.

The Government welcomed the report and the Health Secretary, Andrew Lansley, has announced that there will be a period of consultation on the specifics of the proposals in autumn 2011 after which a White Paper will be published in spring 2012. Age UK welcomes the Dilnot Commission recommendations, many of which meet the tests set out by Age UK before the publication of the report. We believe the recommendations set out clear plans for long term and sustainable reform of social care. We also welcome the Commission’s analysis of the historic underfunding of social care. It is now essential that the Government take urgent action to reform our care system, including adequate resourcing of the current system which is an essential platform on which to build wider reform. Age UK is calling for the Government to publish a White Paper by Easter 2012 at the latest, including details of how the new system will be funded, and to commit to include legislation on the issue in the subsequent Queen’s Speech.

Age UK’s response to the Dilnot Commission’s report on the Funding of Care and Support

Key recommendations:

• Individuals' lifetime contributions towards their social care costs - which are currently potentially unlimited - should be capped. After the cap is reached, individuals would be eligible for full state support. This cap should be between £25,000 and £50,000. We consider that £35,000 is the most appropriate and fair figure;

• 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 should be introduced to ensure greater consistency; and

• All those who enter adulthood with a care and support need should be eligible for free state support immediately rather than being subjected to a means test.

• The Commission estimates that its proposals - based on a cap of £35,000 - would cost the State around £1.7billion

Background The current system of care and support is in crisis. In recent years, the aspiration of reform has been commendable, with initiatives to support carers, improve early intervention, personalise services and end age discrimination. But the system is massively under-resourced and unable to deliver on this promise. Out of 2 million older people in England with care-related needs, 800,000 receive no formal support from public or private sector agencies. Since 2004, net spending on older people’s social care has risen by just 0.1 per cent per year in real terms, a total of £43 million, while real spending on the NHS has risen by £25 billion. With spending cuts under way the situation is rapidly deteriorating. Data from the Department of Health and Department of Communities and Local Government indicates that spending on older people’s care fell in April by more than 6% in real terms. In addition, changing care needs, changing wealth and assets, and changing expectations of services, necessitate reform of the current system so that it can adequately meet the needs and aspirations of everyone who relies on care and support. Andrew Dilnot’s recommendations are therefore timely. It is now vital that urgent action is taken to take the proposals forward into legislation. The Dilnot Commission’s recommendations Increased support needed for current system The current system of social care is underfunded; greater and better targeted resources need to be made available The Commission has highlighted the current problems in the social care system, arguing that the social care system has been underfunded in the past. While it recognises that funding was made available for social care in the spending review, it acknowledges that these resources have not found their way to social care budgets in some areas. The Dilnot report states that the spending review has caused “extreme strain” in the current care and support system, resulting in increases to eligibility criteria and reduced care packages, as well as putting greater demands on the NHS. The Commission has said that any further resources for social care must be targeted more effectively so that they are spent on social care at a local level. As a result of this underfunding, the Commission has said clearly that the Government needs to find greater resources for the current social care system as well as additional funding for any reform package. It has not put a figure on the short term investment required. Age UK welcomes the Commission’s analysis of the failings of the current system, especially on the historic underfunding of social care. Its recognition of the problems caused by underfunding adds significant weight to arguments for increased resources in the short term. However, it is regrettable that the Commission has not detailed how much additional funding is needed for the current system and its comments on funding are not prominent in the report. It is vital that the Commission’s views on current funding continue to be raised with the Government as they take forward plans for future reform. Adequate resourcing of the current system is an essential platform on which to build wider reform. It would ensure that packages of care are sufficient and meet people’s needs, and that eligibility for services can be more generous. Given that reform may be years away, it is even more important to invest in the current system so that it is fit for purpose in the short and medium term.

Lifetime care costs cap There should be a lifetime cap of on the costs individuals pay for their care. The Commission has recommended that there should be a lifetime cap on the costs individuals pay for their care. They suggests this should be between £25,000 and £50,000 with a principal recommendation of £35,000. After someone has spent this money their care costs will be picked up in full by the state. This proposal is designed to protect people from catastrophic care costs by limiting their overall liability. Whilst only a quarter of those receiving care are expected to reach the level of the cap, its existence will remove the possibility that personal care spending could spiral and therefore removes the worry and uncertainty of extremely high costs. In addition, because there is a maximum fixed amount of personal liability, the development of insurance products will be more straightforward. The Commission anticipates the private sector will respond and create products which enable people to insure themselves up to the capped liability. Age UK supports this recommendation. A key failing of the current system is the impossibility of forward planning due to a general lack of knowledge about care and how it is arranged, but also as a result of uncertainty about what to expect if and when care is required. This proposal will help people plan ahead, manage their finances and remove the fear created by lack of predictability in care. We would welcome the development of an increased range of financial products that support consumer choice. Age UK and other consumer organisations would like to be involved in their development. Age UK is seeking reassurance that local council allocations for people who have reached the liability cap will be realistic and set at a level where good quality care can be purchased without the need for a top up. We also welcome the Commission’s additional recommendation to extend the current offer of local authority deferred payments for care so that it becomes a full, universal offer across the country. Currently, it remains the discretion of a local council whether such an arrangement is offered. Reformed means test The means tested threshold for care homes should be raised from the current rate of £23,250 to £100,000. The Commission has recommended that the means tested threshold for people living in care homes should be raised from the current rate of £23,250 to £100,000. Everyone who has more than this is in assets (including the value of their property) will pay in full for their care. Those with under £100,000 will pay a proportion of the cost of their care. The remainder will be contributed by the state. The means test threshold for domiciliary care will remain as it is, at £23,250. Any contributions made towards home care costs will count towards the individual limit of £35,000. Age UK supports the introduction of the higher means test threshold. Older people tell us that the current threshold of £23,250 feels unfair, especially for those households which have saved and feel they are penalised by using such a large proportion of their assets for care. The new threshold means everyone will retain the majority of their housing assets under the new system. This element of the proposals will make the package particularly beneficial for low income home owners. National eligibility threshold There should be a single threshold for care operated across all local councils

The Commission has recommended that there should be a single threshold for entitlement to care across all local councils. Entitlement is currently variable as individual councils decide their eligibility threshold. On implementation of the reforms, Dilnot suggests that the threshold be set at ‘substantial’ which means care would be provided to the top two categories of need. He does, however, flag this as an issue to be reconsidered once reforms have been started, as ideally care should be provided for lower levels of need. The Commission also proposes that the current eligibility system, Fair Access to Care Services,1 is replaced with a more objective eligibility framework with a simplified and clearer process. The new framework should include aspects of health and emotional well-being, recreation, the contribution made to society and securing rights and entitlements. It is suggested that the new framework could link with the assessment scales used by the financial services sector for their insurance products, which would simplify the system further. We believe the proposal for single threshold will greatly improve local variability in services, which older people tell us is frustrating and a source of worry. It will also be more clear what support people are entitled to. Altering the assessment system will improve this further, as it is currently unclear what level of need qualifies for ‘substantial’ under the FACS system. Age UK will be looking carefully at the links between the Dilnot Commission’s recommendations on assessment and those contained in the Law Commission review to achieve a firm legislative basis for an outcomes-based assessment framework. There will be some issues to consider in the transition phase: setting the cap at substantial will mean the six English councils that currently provide care at the top level of ‘critical’ will be required to increase their level of service, and could potentially mean that the 26 councils that provide care for people assessed with ‘moderate’ needs could reduce their care provision. In the short term the numbers receiving means-tested support could actually decline. The Commission’s intention is that care should ultimately be provided more widely. Age UK hopes to see social care provided at a more generous level to cover a wider range of needs. By providing care for lower needs there is more opportunity to prevent high needs developing, because support is in place. Additionally, unless eligibility is extended, under the new system people who purchase support privately to meet lower levels of need would not see their financial contributions build towards their £35,000 limit until their needs were assessed as ‘substantial’. Disability benefits The continuation of disability benefits like Disability Living Allowance and Attendance Allowance The Commission has expressed its support for continuation of disability benefits, like Attendance Allowance. This is in recognition of their preventative benefits, supporting people to meet lower levels of need and arrange informal care. However, it has also been noted that Attendance Allowance in particular should be rebranded to make its purpose clearer and increase take up. It has been proposed that Attendance Allowance is not awarded to those who reach the cap of £35,000 and whose care costs are picked up by the state, as is already the case for care home residents receiving means-tested support.

1 Although the 2003 guidance on eligibility Fair Access to Care Services was replaced by Prioritising Need in the

Context of Putting People First in 2010.

Age UK is pleased to see that the value of disability benefits has been recognised. We have argued that their role is wider than financing care and that they should be retained in order to help people with the additional costs of disability, like increased laundry, special diets and transport. Any changes to Attendance Allowance that result in increased take-up would also be supported by Age UK. Contribution to care home living costs Those living in care homes should be responsible for paying their general living costs The Commission argues that those living in care homes should be responsible for paying their general living costs, just as they would be if they continued to live in their own home. This is so that the system is neutral between care delivered in different settings so there is no particular financial incentive to move to residential care. In order to contain the charges that care homes make for general living costs, the Commission has suggested that a cap is put in place, at around £7,000 to £10,000 a year. This would mean that for people funded by the state, after reaching the £35,000 cap, care homes could not charge them more than this. The cap has been set at this level because the Commission argues it is affordable (a pensioner’s minimum income would be £7,412 if they receive Pension Guarantee Credit) and because it is representative of general living costs. Age UK believe that capping living costs for those being supported by the state is in principle a positive move, as it protects the resident from costs they would not have incurred if living in their own home. A fixed cap eliminates the possibility that care homes would charge inflated general living costs in order to compensate for a fixed income from the council for the remaining element of someone’s care home costs. However, further work on the detail is needed. It is not clear whether someone whose income is around £7,000 would be treated. They would, under the current system, be able to keep £1,175 for their personal expenses so in practice would only be able to contribute around £5,800 towards living costs. If they held wealth would they be required to use their capital to fund the remaining living costs, or would a complex new tier of means-testing be required? A cap on general living costs will only work if local authorities pay reasonable fees for the remaining costs of a care home. This is necessary to support care homes to provide good quality services and ensure that they remain financially viable. Age UK would oppose additional top-ups to care fees, usually paid by family members, except for luxurious accommodation. Improved services for carers A better assessment for carers with new legal rights to services The Commission has recommended that services for carers need to be improved as their support complements the formal care system and enables it to operate successfully. The first proposal is that a better assessment system for carers is introduced. The Commission has also endorsed the Law Commission’s proposal that carers should have new legal rights to services. Carers’ assessments will also be portable across local councils. The intention is that the sum of the other proposals in the report will make the care system clearer and more predictable, which will itself benefit carers as planning ahead will be more straightforward than it is currently. Age UK strongly supports the proposals for carers and agrees with the Commission’s view that the new package as a whole will benefit carers, who often bear the responsibility for arranging care. In particular, we welcome the proposal that carers will have statutory rights to services. In future years the level of support offered to carers should be kept under review.

Information and advice The establishment of a national source of advice The Commission has recognised the current system is confusing and difficult to navigate. It has recommended a national source of advice is established. This should cover information on both financial and access issues to ensure that people are able to make fully informed decisions. The Commission expressed support for the Law Commission recommendation of a legal duty on local councils to provide information, advice and assistance services in their areas. Advice should be co-produced with the third sector and other interested parties, such as the Financial Services Authority. The Commission also recommends that better advice should be complemented with a national awareness campaign on the cost of care and a new funding system. Age UK agrees that better information and advice is critical for the success of a new funding system. The tougher requirements for local authorities will also help those seeking support, even where they are not state funded. Age UK will continue to provide high quality local and national information through our website, advice line and local face-to-face advice services Changes for younger adults Assessment and provision of services will be available using the same system as for older people but with the funding cap working differently The report sets out proposals which will affect the way that care is funded and provided for people between 18 and 65. Assessment and provision of services will be available using the same system as for older people but the funding cap will work differently, as a reflection that younger people have not generally had the same opportunities to accumulate capital. Anyone under 40 with eligible care needs will receive state-funded care. After the age of 40, the cap on personal contributions will rise up to retirement age, where the full cap of £35,000 will apply. The Commission anticipates that this could work so that a 40 year old would have a £10,000 cap; a 50 year old a £20,000 cap; a 60 year old a £30,000 cap and a 65 year old a £35,000 cap. This is a positive recommendation and we particularly welcome that there will be one system for people of all ages. Age UK strongly believes there is no justification for a two-tier system based on age. What will the changes cost? The Commission has estimated the cost of the changes at between £1.3bn and £2.2bn per year if implemented today. This would result in an increase of 11.7 per cent to the existing budget for the current means tested social care system. In 2025-26 it would represent an increase in the budget of 15.8 per cent. The report is also clear that the current system needs additional investment in addition to funding for the new capped cost offer, although a figure is not put on this. Age UK believes it is vital that the cost of adequately resourcing the existing social care system is accounted for in Government budget planning. We will seek a Government commitment to investing urgently in the current system, as well as financing longer term reform.

If you have any questions regarding this briefing, please contact Camilla Williamson, Public Affairs Adviser (camilla.williamson@ageuk.org.uk; 020 303 31494).