Clause 17 - Assessment of financial resources

Care Bill [Lords] – in a Public Bill Committee am 11:34 am ar 16 Ionawr 2014.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Liz Kendall Liz Kendall Shadow Minister (Health) (Care and Older People) 11:34, 16 Ionawr 2014

I beg to move amendment 95, in clause 17, page 17, line 15, at end add—

‘(14) The regulations in subsection (7) are subject to the affirmative resolution procedure.’.

I do not know whether I am allowed to do this, Mr Rosindell, but I want to welcome the non-Members who are here today. I would love to know who they all are and where they are from. It is nice to see people listening to this important discussion.

I know that hon. Members may have wished to go to the funeral of Paul Goggins, which is taking place today. We are not there because we are fulfilling our duties on the Care Bill. Many hon. Members will know what a decent and good man he was. He began his career as a social worker in children’s services, and was a passionate campaigner and a good, honest and true man. I wanted to pay tribute to him on the record.

Photo of Norman Lamb Norman Lamb The Minister of State, Department of Health

I join the hon. Lady in what she said about Paul Goggins. He was a lovely man, and really nice to deal with. He was completely non-tribal and had clear principles that he was prepared to fight for. I had a meeting with him on an important issue, which was not of great public excitement and involved the care of people in prisons, but he was passionate about it. I had a high regard for him, and I agree with what the shadow Minister said.

Photo of Liz Kendall Liz Kendall Shadow Minister (Health) (Care and Older People)

I am grateful to the Minister for his comments and I am glad that they are on the record.

Hon. Members will know that clause 17 is about how someone’s income, savings and assets are assessed to determine whether they qualify for financial support from their council to pay for their care. It is about the means test in social care. It enables the Government to make regulations on how and at what level that means test is set. Amendment 95 would ensure that the affirmative resolution procedure of both Houses of Parliament would be required for the regulations to become law, just as we proposed on Tuesday for the regulations on the cap on care costs. I want to talk about why the amendment is necessary and to make a few general comments about the means test.

How the means test works is critical in determining whether pensioners with a modest income and assets will benefit from the Government’s proposed changes to social care funding. Let us be clear: care for the poorest pensioners, if they are assessed as being eligible, is free. Better-off pensioners, particularly those with more expensive homes, will benefit most from the cap. The means test is the key issue for everyone in between—the squeezed middle, or older people who have worked hard, saved all their lives, bought a modest home and perhaps have a small second pension on top of their basic state pension.

Hon. Members may be aware that there are two means-test thresholds for residential care: a lower limit and an upper limit. The means test works in between those limits. At present, older people with income or assets, including their savings and home, worth less than the lower limit, which is currently £14,250, have their care paid for. Those with income or assets worth more than the upper threshold of £23,250 must pay for their care in full. Alongside introducing the cap on care costs, the Government are raising the upper means-test threshold to the equivalent of £118,000, as Andrew Dilnot recommended, but the lower level will remain roughly the same, although by 2016-17 it will be equivalent to around £17,000.

That move is welcome. Opposition Members have said that any cap on care costs is a step forward, and we recognise and welcome any move that ensures that more pensioners have help to pay for their care.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Health), Shadow DUP Spokesperson (Transport), Shadow DUP Spokesperson (Human Rights)

I want to go back a couple of steps to the hon. Lady’s comments about the fact that pensioners may be asset-rich and money-poor. Houses may have been in families for generations so people may have built up their assets, and that will restrict the benefits they receive. Is that the point the hon. Lady is trying to make?

Photo of Liz Kendall Liz Kendall Shadow Minister (Health) (Care and Older People)

Yes, and I will explain why people who do not have much of an income but have a big asset and those on average incomes, perhaps with a basic state pension and a small second pension, will not receive any help from the rise in the upper threshold of the means test because of the way it works. I hope that the hon. Member for Strangford will bear with me because I want to put the matter on the record, complicated as it is.

On 11 February 2013, the Secretary of State for Health told the House of Commons that raising the upper threshold would

“for the first time, provide financial protection for those with modest wealth”.—[Official Report, 11 February 2013; Vol. 558, c. 593.]

The reality, because of the way in which the means test works, is very different. In the other place, Lord Lipsey, as so often, hit the nail on the head. He said that the reason it is a problem for people with modest incomes and modest assets is because of what is in fact

“a very nasty means test.”—[Official Report, House of Lords, 16 July 2013; Vol. 747, c. GC728.]

I hope the Committee will bear with me while I explain. Let us say that an elderly person with an average income—a basic state pension and the average amount of a small second pension—has assets or savings of about £100,000. I will use that figure partly for the  sake of simplicity, but also to demonstrate that claiming that everyone with income or assets of up to £118,000 would get help simply is not the case. So, when they hit that £100,000, they might have spent down some of the costs of their care, but they have £100,000 left in their home. As they do now, councils will assess them under the means test. They take into account the pensioner’s actual income from their basic state pension and any second pension, and what is referred to as a notional income from their home.

The council assumes that for every £250 a pensioner has in their home, they have £1 of notional income, which, of course, they do not, but that is how the means test works. When we add together the average income of a single pensioner, which the DWP estimates at £256 a week, plus the notional income between the lower and upper level of the means test, the pensioner on an average income with assets or a home of £100,000 would be assessed as having a total income of £588 a week. Since the total income of £588 a week is far above the standard rate that a council would pay for a week’s stay in a care home in their area, which we know is £477 a week, the pensioner is deemed to have too much money to qualify for help to pay for their care.

I am not proposing at this stage that we change the means test. I am trying to explain that the means test is crucial for pensioners on modest means, but the way in which it works, even with raising the upper threshold, means that many will not qualify for any extra help. The Health Secretary should not be claiming that for the first time pensioners on modest incomes will be protected by raising the upper threshold, because that is not the case. Did the Minister look at trying to change the way in which the means test works so that it helps pensioners on average incomes with modest assets, or pensioners who might be asset-rich but income-poor?

I want to raise a couple of points—some of which I have mentioned before, because the issues are critical to the means test—about pensioners who do qualify for some help. I am sorry to ask the Minister again about attendance allowance, about which I am increasingly worried. Lord Lipsey said in the other place he had discovered that if a pensioner applied for help through the means test, they would lose their attendance allowance after the first four weeks. I think he was alerted to the issue by the older persons charity FirstStop, which said some people might be better off not asking for help under the means test, because they could lose £79 a week in the higher rate of attendance allowance. Will the Minister tell us whether that is the case? Would a pensioner lose their attendance allowance if they applied under the means test for support under the Government’s new proposals?

The tricky issue of top-ups was raised by Lord Lipsey in the other place. I want to pay tribute to him because he really knows his stuff. He has been very helpful in scrutinising the Bill. At the moment, if a council assesses that an older person’s needs can be met by paying, say, £400 a week for a care home, they and their family can choose for them to go to a more expensive care home that costs, say, £500 a week and pay the extra £100 from their own pocket. However, the older person would be legally prevented from paying the top-up. A family member could pay, but the older person could not. In reality, some councils apply that rule strictly and others do not, so it can be confusing. What happens if the  older person wants to pay a bit more but his or her family do not have the money? If they give their family the extra £100 to pay the top-up, are they breaking the law?

As the care Minister will know, Lord Lipsey tabled an amendment in the other place to clarify the situation with top-ups. There are loads of top-ups going on, although everybody denies it. I raise this issue because more and more people will be assessed under the means test because the threshold is increasing. Older people who want to top up their help from the council so they can go into a slightly better home are not able to do so, and if they give the money to their family they may be acting illegally.

I believe that we should help people to contribute towards the cost of their care, if that is what they want. The top-up situation has always been confusing. I have not tabled again Lord Lipsey’s amendment, but it is important that the Minister addresses this issue. More and more people will be assessed under the means test, it is currently illegal for older people to pay a top-up and there is confusion in the system. What will the Government do about it?

These issues, as I have probably explained inadequately, are complicated. The means test relates to how the cap works and whether pensioners want to take out loans. Those details will be set out in regulations, which we are being asked to pass without proper scrutiny. We have asked for the regulations to be subject to the affirmative resolution procedure because Members should be allowed to scrutinise them properly. As the Minister knows, the means test is critical because it is about people with modest incomes and assets, and I genuinely think that it is key to making the Bill fair. It is about helping not only the poorest or the very rich, but everybody in between—the squeezed middle.

Photo of Norman Lamb Norman Lamb The Minister of State, Department of Health 11:45, 16 Ionawr 2014

Let me start by agreeing with the shadow Minister. This is a complicated issue, and it takes a while to get one’s head around it. The bottom line is that the extension of the means test is, as the shadow Minister said, in accordance with Andrew Dilnot’s recommendations. It will mean that about 35,000 more people get social care support from their local authority.

The hon. Lady is right that people who have assets of less than £118,000 will not get additional support because of the combination of their income and assets. I have said all the way through that it is incredibly important that we are clear about what the measure will and will not do, but its great value is that a whole load more people on modest means will get more help. The value of extending the means test is that self-evidently it will help. The 35,000 extra people who will get social care support are those who need it most. I am sure the shadow Minister agrees with that. She was generous in indicating that she supports the move, but the fact that the coalition Government are providing extra help with care costs for a load more people on modest means is incredibly positive, and is widely welcomed.

She asked about the consideration given to changing the formula. The problem is that there would be a cost attached to that. I think Lord Lipsey put forward a proposition that involved changing the formula for  converting capital into income. I will correct this if I am wrong, but I think that would cost around £100 million. The Government have to find that money; indeed, the Opposition have to find that money if they are to propose it. We think that the step we are taking is sustainable, affordable and helps the people who most need help but get none at the moment.

There is a sense at the moment—and has been for a long time—that if someone has over £23,000 they are on their own and lose everything and get no support at all. I am proud that this Government are finally addressing that great injustice. I think it will make a real difference to people.

On the specific point about attendance allowance, the way in which social care payments work can affect eligibility for certain state benefits, including attendance allowance. In designing the detail of the reforms, the Government are considering the interaction with the benefits system—the shadow Minister is right that it is complicated—to ensure that no one will be made worse off by these reforms. I repeat that many more people will be made better off by getting some support with their care costs, and that help will be targeted at those who need it most.

Photo of Liz Kendall Liz Kendall Shadow Minister (Health) (Care and Older People)

How would the Minister guarantee that? If someone at the moment claims social care means-tested support, they lose their attendance allowance. How will he guarantee that if someone decides to do that, they will not lose their attendance allowance?

Photo of Norman Lamb Norman Lamb The Minister of State, Department of Health

The best answer I can give is that we are clear about what we want to ensure: that no one will be worse off. The design of how that works is still work in progress, but we will clarify the position as soon as we are able, both to the shadow Minister and to other hon. Members.

The shadow Minister also mentioned top-ups and whether an individual can top up. At the moment they cannot top up, although they can if somebody else can fund it. There is a legitimate concern of ensuring that someone who wants to top up is able to sustain that. Everyone would want to avoid someone taking on a financial commitment that they were not able to sustain, perhaps leading to a situation where they could not afford the particular care home they had chosen to go to. Those are really tricky issues and we want to ensure that we give that extra flexibility. We are looking at relaxing the rule, but we must ensure that there are still some protections for the vulnerable people I refer to.

Photo of Liz Kendall Liz Kendall Shadow Minister (Health) (Care and Older People)

It is excellent that the Government are looking at relaxing the rule. That is something new. We are obviously right to be concerned about whether elderly people who start topping up will continue to have enough money to do so, and that they do not have to leave their care home. However, the same could be said for families. Families are topping up; that is legal, but what if they lost their job? What if their kids go off to university and they have to pay fees? That argument is not very good. Families are just as prone to terrible things happening if they are paying the top-up as older people. If the Minister is looking at relaxing the rule on top-ups, how will he do that? So that I can keep my eye out for regulations or consultations—it is quite hard to keep up—where will he do that?

Photo of Meg Munn Meg Munn Llafur, Sheffield, Heeley

That is where divine intervention comes from.

Photo of Norman Lamb Norman Lamb The Minister of State, Department of Health

I have noted that comment and I am ignoring it.

Photo of Liz Kendall Liz Kendall Shadow Minister (Health) (Care and Older People)

I think the Minister meant to say that he will let me know in a letter. Is that right?

Photo of Norman Lamb Norman Lamb The Minister of State, Department of Health

The shadow Minister helps me out. I will let her know in a letter.

The Bill has been widely praised for the manner in which it has been drafted. It is a model of co-production, as I have said before, consultation and positive joint working between the Government and stakeholders. It has been described as the most consultative process perhaps ever undertaken for legislation. This is a testament to our commitment to open working, and not something that will cease with the completion of primary legislation. That approach will continue through secondary legislation under the Bill. We will carry forward the approach in the regulations and statutory guidance that will underpin the Bill.

We have already committed that all new regulations made under part 1 will be subject to public consultation in advance of being laid before Parliament. That is in addition to the open and collaborative manner in which we are drafting those regulations and statutory guidance, even before consulting publicly. It means that stakeholders, members of the public, hon. Members, and anyone else will have the opportunity to comment on and influence all regulations and guidance. The amendment would require regulations made under clause 17(7), which are in relation to the carrying out of financial assessments, to be subject to affirmative resolution. We do not think that that is necessary.

The provisions in clause 17 will establish a single legal framework for financial assessments, underpinned by regulations and statutory guidance. This would build on and enable us to improve the current system. Our aim is to promote greater transparency and fairness by setting rules that prescribe a consistent approach to charging in similar circumstances, where appropriate, as well as allow scope for flexibility to respond to different local circumstances where necessary. For example, models of residential care and the implications for approaches to charging are relatively similar across the country. In particular, residential care will include accommodation, food, and utility costs, as well as personal care. We would therefore expect regulations to prescribe rules that require a consistent approach to determining charges by different local authorities, as they do now.

Key to delivering this approach will be that regulations are flexible enough to be kept updated. There are already regulations setting out how local authorities should financially assess people in residential care. Those regulations are a long-standing feature of the care and support system, and parts of them are revised, updated and laid annually. Reflecting this practice of regular revision, they are subject to negative resolution, something to which the hon. Member for Leicester West, although not then a Member of Parliament but a special adviser in the Department of Health, did not appear to object to any great extent.

Photo of Liz Kendall Liz Kendall Shadow Minister (Health) (Care and Older People)

All I would say is come off it. Just for the record, advisers working on policy are not allowed to speak about affirmative resolution procedures.

Photo of Norman Lamb Norman Lamb The Minister of State, Department of Health

I accept that very fair intervention. However, none of her colleagues in this place objected to negative resolutions, which we are simply continuing through this measure. Requiring affirmative resolution would be bureaucratic and unnecessarily time consuming. Given parliamentary timetables, this may mean adding several months to finalise regulations. In this case, where we intend for the regulations to be updated annually, it could seriously compromise the ability to keep provisions up to date, and to provide them to local government with sufficient notice in advance of implementation.

Photo of Liz Kendall Liz Kendall Shadow Minister (Health) (Care and Older People) 12:00, 16 Ionawr 2014

I know what the Minister is going to say, but what I care about is the issue of someone who claims under the social care means test losing their attendance allowance. That will be about £87 a week when the measure comes in, given that the upper level now is £79. That is a lot of money for an unbelievably frail, elderly person—it is a lot of money for anyone. The Minister has said that under the regulations no one will be worse off, but how are we going to check that? How do we scrutinise whether what he says will happen? How will we vote to stop it if we think the Government have not done it properly? How will we do that? That is the main, serious thing that I am bothered about. The Minister has said that no one will be worse off, but I am not sure which regulations are meant, I am not sure when they will be introduced, and I do not know how the Government will do it. Will they fundamentally change the principle of the means test, or allow it not to apply to some people who claim under the means test? I do not know. It is completely confusing, but really important.

Photo of Norman Lamb Norman Lamb The Minister of State, Department of Health

I agree that it is important and that we need to get the detail right. The point I have tried to make is that we are intent on getting the detail right when the measure is first introduced. There is a long, collaborative, consultative process, with which we will include the detail of the attendance allowance impact. There will therefore be every opportunity, not only through parliamentary processes but through proper consultation beyond this place, to ensure that we get the detail absolutely right and achieve the objective we are all after, so that the hon. Lady and others—including myself—are satisfied before the regulations are laid before Parliament. I hope that reassures her.

In any case, from the perspective of public and stakeholder engagement, the additional process is completely unnecessary on an ongoing basis since, as I have said, we have already committed to consulting publicly on the first set of regulations. Moreover, the  regulations will still be subject to the parliamentary negative procedure, so either House may force a debate in the usual manner.

No one can seriously doubt our commitment to consultation on the development of the Bill, and we have already committed to continue that with regulations and statutory guidance. The amendment would do nothing to improve the commitments we have already made.

Photo of Liz Kendall Liz Kendall Shadow Minister (Health) (Care and Older People)

I would like the Minister to write to me to spell out exactly when the proposals are coming out, so that I can keep track of everything and the Opposition can be clear about what we are doing. This issue is complicated and the point I am most concerned about. If the Minister commits to that, I will withdraw the amendment. Finally, he has been clear in Committee that not everyone on modest means will have all their care free under £118,000, but perhaps he should have a word with the Secretary of State so that he does not make assertions that are not true.

Photo of Norman Lamb Norman Lamb The Minister of State, Department of Health

I talk regularly to the Secretary of State and I see no difficulty in that regard. I am also happy to write to the hon. Lady, because the bottom line is that we are after the same thing. I am not in any sense seeking to deceive anyone; I simply want to ensure that we get it right and do not have unintended consequences. I am happy to lay out the intended time scale for all the proposals, and to allow her to scrutinise it and keep up to date.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Health), Shadow DUP Spokesperson (Transport), Shadow DUP Spokesperson (Human Rights)

I realise it is the 11th hour for making an intervention, but I want clarification on the attendance allowance issue that the hon. Member for Leicester West brought to the Minister’s attention. The hon. Lady was seeking assurance that the attendance allowance would not be affected by the changes. The Minister agreed to look at that and to report back—I do not want to put words into his brief, but I think that was what he said. Will he clarify the attendance allowance issue? I personally do not want to see any changes for those with attendance allowance. The attendance allowance is there for a purpose, which is to help those who are disabled and need help. It therefore should not be affected and I seek clarification on that point.

Photo of Norman Lamb Norman Lamb The Minister of State, Department of Health

I thank the hon. Gentleman for that intervention. I have been clear about our commitment that no one will be worse off as a result of this measure, and that is an incredibly important reassurance to people who are receiving the attendance allowance. As a result of the reform going through, as soon as it is introduced in 2016, 35,000 more people will straightaway receive payments for social care support from their local authority. They are the people who need it most and who are most challenged in terms of capital and income, and that is a crucial combination. For means-testing purposes, the contribution has been designed for a particular reason—to target support on people who need it most. That is what the change does. Thirty-five thousand people will receive support from their local authority for the first time. The additional guarantee is that we will ensure that no one is worse off in respect of the interplay between the attendance allowance and payments from the local authority. I will write to the hon. Member for Leicester West to keep her reassured.

Photo of Liz Kendall Liz Kendall Shadow Minister (Health) (Care and Older People)

I am happy to withdraw my amendment, but I still have no idea how the Government will do it. I am sure that the Minister does not want anyone to be worse off, but either the Government will have to say, “You don’t lose your AA if you claim under the means test”, or they will have to fundamentally change the means test. I have not seen any detail about how that will be done and I am sceptical—to put it mildly—not about what the Minister wants to do, but about how on earth it will be done. The Government have to change fundamentally either the attendance allowance or the social care means test. I do not know how they will do it and I want that on the record. We need to see the detail. I am worried that we will not be able to scrutinise it, but let us see the letter from the Minister. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 17 ordered to stand part of the Bill.