1. NAFAO Conference 18 October 2012 David Hayward – Department of Health Universal Deferred Payments: Designing the new scheme

2. DH template2 Cost of average length stay in a care home Few people can afford residential care without selling their home 60% have less than £25k in savings (around 1 year in care) 80% have less than £75k (around 3 years in care – the average stay) 40,000 homes are sold each year to pay for care Percentile of over 65s (England) Amount of savings (liquid assets) Total amount of Liquid assets (i.e. savings) English Longitudinal Survey of Ageing, Wave 4, 2010

3. DH template3 Selling the home is a major step at a difficult time People may want to defer for practical, financial or emotional reasons. Practical Selling a home is difficult at short notice Home may need doing up, possessions moved etc. People may lack capacity Financial It can take time to obtain a reasonable sale price Family members may want to own / occupy the home Home could be rented out to help pay for care Emotional People are attached to their homes Last tie to family, community and independence A sale can be distressing “Although the family know their mother will never return to her home, she said that it has been important for her mother to know that the house is still there. Ms. C said that her mother often talks about the house and it is a comfort to her knowing that her son still lives there.” (from a 2010 focus group on DPAs)

4. DH template4 Since 2001, support has been available for people who face selling their homes to pay for care 12 week property disregard Availability Universal – all local authorities Anyone with <£23,250 in savings What it does Provides 12 weeks pause to give time to transition, arrange affairs and start selling the home. Deferred Payment Agreements Availability Discretionary – some authorities Voluntary Agreement with resident How it works Authority allows person to defer paying contribution from assets Legal Charge placed on the property to secure repayment at later time. What it does Allows person to defer sale of home Used by some as “breathing space” e.g. for 1-2 years Used by others to defer for longer, e.g. repaying after death How it works Person pays care fees from income Authority pays excess so person does not have to use savings or housing wealth for first 12 weeks.

5. DH template5 Provision of Deferred Payments is Patchy Authorities have discretion whether and when to offer deferred payments Government does not fund deferred payments and authorities cannot charge interest 2007/8 FOI and more recent surveys suggest provision is patchy Some authorities have hundreds of deferred payments Some offer them less frequently, or as an exception Some may not offer deferred payments at all Based on FOI and Surveys (DH does not collect its own data) Some authorities also use HASSASSA to help people defer care fees Around £80m (total) is currently loaned out to individuals Around 4,000 deferrals are made each year (DPA or HASSASSA)

6. DH template6 Government has committed to Universal Deferred Payments Availability of DPAs is ‘patchy’ Government should extend the deferred payments scheme to be a full, universal offer across the country. Anyone unable to afford care without selling their home should be able to choose a DPA Allow Councils to charge interest to recover costs We agree with this recommendation Deferred Payments will operate in LAs from April 2015. No-one will have to sell their home in their lifetime People can defer ‘reasonable’ care fees Interest and charges should apply Govt will fund authorities to offer the deferred payments The draft Care and Support Bill contains the legal powers to introduce deferred payments in all authorities Dilnot Commission (July 2011)Caring for our Future (July 2012)

7. DH template7 July 2012Easter 20132014April 2015Autumn 2012 Timeline for the next three years White Paper Care and Support Bill Engagement All Councils offer DPAs Announced Universal DPAs Work with Care Sector to design the scheme New legal framework Implement new systems, information etc Enabled by Govt funding and new legal duties Preparation

8. DH template8 Deferred Payments – The Future Built on the current system Operated by local authorities (all authorities) One legal mechanism for deferral agreements Clear and consistent legal rules – we will work with the sector on what these will be Funding from Government to help authorities finance the loans

9. DH template9 Major Design Questions Eligibility Lending Interest Demand Which residents should be eligible for a DPA? Are any restrictions necessary to manage risk? What are ‘reasonable’ care fees? (in the market context) What contribution should people make from income? Setting an interest rate or admin fee that is fair to individuals but helps authorities cover their costs How many people will take up a deferred payment? How long will people want a loan for? These issues all affect the overall cost of the scheme to authorities and the funding Government would provide

10. DH template10 DH / NAFAO / ADASS survey We are surveying authorities on deferred payments and use of HASSASSA charges Survey will launch in late October Your responses will help us design the scheme Key issues we want to understand –Council policies on allowing people to defer care fees –Costs to Councils –How quickly are loans repaid –Practicalities Confidential (we will keep your responses private) Please take part

11. DH template11 We would like your views on four questions… FOR GROUP DISCUSSION AND FEEDBACK Demand: What do you think the demand will be for deferred payments? What proportion of people will want short-term “breathing space” and what proportion will want a longer / lifetime loan? Implementation: Could we improve the process for setting up a deferred payment? What works well now and what does not? What are the biggest challenges to local implementation of universal deferred payments?

12. DH template12 Thank You