Care and Support (Deferred Payment) Regulations 2014

Baroness Jolly Excerpts

Tuesday 9th December 2014 Lords Chamber

[Lord Hunt of Kings Heath (Lab)]

My Lords, I again thank my noble friend for bringing us back to a very important part of our debate during the passage of the then Care Bill some months ago. We need to remind ourselves of the fanfare with which the Government introduced that Bill. As my noble friend said, there was an explicit statement that older people would no longer have to sell their homes to pay for their care. As he has carefully outlined, that is strictly true even within the provisions of the deferred payment regulations. But as he said, it is not in the spirit with which the Government actually announced this policy. Instead of a scheme that would have brought comfort to thousands of people, they have produced a very mean-spirited scheme that will clearly exclude many people who one would have thought should have taken advantage of its provisions.

As these are regulations, we tend to ask technical questions. I have two questions for the noble Baroness, on which she may want to write to me. On the impact of the relevant figure on pensions, how will a pension pot be treated in relation to the calculation of the non-housing asset? Do the Government expect the new flexibility in assessing pension savings contained in the Taxation of Pensions Bill to have any effect on this policy? Will those savings be counted towards the £23,250 cap? I would be very happy for the noble Baroness to write to me on those points.

My noble friend Lord Lipsey came to the crunch of the matter when he said that he did not expect a scheme to be available to the wealthy and the very asset-rich. I endorse that. My noble friend Lord Warner wrote to the right honourable Norman Lamb a year or so ago. My noble friend was a member of the Dilnot commission but is unable to be here tonight. He wrote:

“As a commission we accepted there had to be some eligibility criteria because this was never intended as a scheme that was available to the wealthy and asset rich”.

However, as he said, and as my noble friend Lord Lipsey said, being required to spend down to assets of £23,250 seems far too restrictive to deliver a viable scheme or to reflect what the Dilnot commission recommended.

Surely, even at this stage, the Government need to reconsider this scheme. It is very disappointing that the consultation has taken place, we had a very good debate on it and yet the Government have moved not one inch on this policy. If it goes ahead, it will be very disappointing for many thousands of people who had every reason to expect that they would take advantage of the scheme. The noble Baroness may say that we should not worry because local authorities will be able to offer schemes above the threshold of their own volition. However, I very much doubt whether many local authorities will take advantage of that. Therefore, I support my noble friend. I am delighted that he will push this measure to a Division tonight. We are very happy to support him.

[Baroness Jolly (LD)]

My Lords, I shall also have to take exception to the noble Lord’s second Motion today on the eligibility criteria. The eligibility criteria are not, as he has suggested, at odds with the overarching policy intention that people should not be forced to sell their home within their lifetime to pay for their care. Indeed, they ensure that protection and support is available to those who need it.

Noble Lords will recall that in my earlier speech I made reference to the conclusions of the Commission on Funding of Care and Support, chaired by Sir Andrew Dilnot. As I said, the commission supported the extension of deferred payments. More specifically, it recommended:

“Anyone who would be unable to afford care charges without selling their home should be able to take out a deferred payment”.

The deferred payment scheme that each local authority will be required to implement will achieve precisely this—it will provide protection to those at risk of having to sell their home to pay for their care.

It has been suggested that the eligibility threshold, which requires a person to have less than £23,250 in savings and assets on top of the value of their house to qualify for a deferred payment, has been set too low and will not achieve this aim. It has even been suggested that this policy would leave people unable to afford their basic living expenses. So allow me to shed some light on this debate by informing noble Lords that setting the threshold at this level means that 80% of people who develop a residential care need will qualify for either help from their local authority in paying for their care or a deferred payment agreement. This means that only the wealthiest 20% of people entering residential care—those who have savings and assets above £23,250 on top of the value of their property—will be asked to initially meet their own care costs before they receive local authority support. Crucially, anyone in this wealthiest 20% bracket would subsequently qualify for a deferred payment if their savings and non-housing assets fell below the £23,250 threshold. So if a person has a change of circumstances or has to spend down their savings to below £23,250, they would be eligible for the support and protection provided by a deferred payment.

[Lord Hunt of Kings Heath]

My Lords, can the Minister clarify this? Taking the case raised by my noble friend of an individual with £30,000 of non-housing assets, under her definition these classify this individual as being in the wealthiest 20%. Is that so?

[Baroness Jolly]

That is what has been assessed as wealthy. The £23,250 was set as a level below which you would be eligible for assistance.

While we want as many people as possible to benefit from the reforms, the eligibility threshold was set at this level because we wanted to focus the funding available for the scheme on providing protection to those at most risk of losing their homes. If we extended automatic eligibility for deferred payments to the wealthiest 20%, who can afford care without having to sell their home, it would mean having to take funding from elsewhere in the care and support system, where it could surely provide greater benefit. That is why the regulations that were laid before the House do not mandate that a local authority must offer a deferred payment to someone with assets of more than £23,250. This is necessary to ensure value for public money by targeting resources where they are most needed.

We have set these criteria so that people will be entitled to a deferred payment when they would be at risk of being forced to sell their home to pay for care. The criteria are also to ensure good value for public money and minimise the risk of bad debt. I trust that noble Lords agree that it is only right and proper that we should prioritise first, and help and support those most in need. There has also been some suggestion this evening that the Government have not been open about the £23,250 threshold, or that my noble friend Lord Howe, who is not in his place, was somehow disingenuous when he spoke on this matter in your Lordships’ House previously. The £23,250 asset threshold, discussed frequently during the passage of the Care Act, has been the subject of not one but two public consultations. First, it was discussed in the consultation on funding reform in July 2013; secondly, it featured in the draft regulations and statutory guidance published for consultation this summer.

These consultations have involved officials from the Department of Health proactively engaging with people, and travelling the length and breadth of the country to consult the full range of stakeholders, including service users, local authorities, members of the general public and the Care and Support Alliance. The policy has been developed in close consultation with an expert body, called the Paying for Care Transformation Group, whose membership includes a range of charities and third-sector organisations, including Age UK, Carers UK, the Care and Support Alliance, and Sense. Through this group we have ensured that the development of the universal payment scheme has been guided by the expertise and insight of those key organisations. It is hardly fair to say that we did not take a full range of views into account, or that the asset threshold is in any way a surprise.

On a point made by the noble Lord, Lord Hunt, about whether the pension pot should be included, that is covered in the statutory guidance on charging, but I am more than happy to write to him and place a letter in the Library.

The introduction of the universal deferred payment scheme will extend protection to those most at risk of having to face selling their home to pay for their care and support. The scheme will help provide reassurance and peace of mind to thousands of care recipients and their families who would otherwise be faced with making extremely challenging decisions at a most vulnerable time in their lives.

I hope that I have been able to provide assurance about the great benefits of the deferred payment scheme and how it will work from April next year. I hope that I have also convinced your Lordships’ House that these regulations should be allowed to come into force without further delay or hindrance.

[Lord Lipsey]

My Lords, I shall be much milder in winding up than I would have been had the noble Earl been in his place. I recognise the care that the Minister put into those remarks, but I am afraid that she inadvertently displayed her lack of background in the field and I am sorry if she was advised to use some of the words that she did.

The Minister said that this issue had been discussed frequently on the then Care Bill. I will remind noble Lords what happened. There was no mention of the threshold in the Care Bill. The Care Bill went through Second Reading. It went through Committee. When it got to Report, it was only because I did the sort of thing that, as a geek, I do—reading through the 700 pages that the Government had produced to accompany it, and not just the bit on deferred payments but the bit on the draft statutory orders—that I discovered this proposal. I raised it at the last minute on Report. The Government freely admitted that there could then be an amendment at Third Reading, which the House indeed discussed, and it was the assurances that the noble Earl, Lord Howe, gave that caused us not to take it further. When the noble Baroness says that it was discussed during the passage of the Care Bill, it was, but no thanks to the Government. They had hidden it away in those 700 pages. I am inclined to make the noble Baroness read all 700 tonight—she will sleep better and she will know the true history of this affair when she has done so.

The second substantive point the Minister made was that £23,250 is high enough—it seems reasonable that it should be denied to people with £23,350. I will not dissect the 80% thing at this moment. Does she realise that she is kicking her own Government in the teeth when she says this? Her Government do not think that £23,250 is enough. Following the recommendations of the Dilnot report, they are upping that figure to £118,000 next year. Incidentally, that is a higher figure than Dilnot recommended because they decided that Dilnot was not generous enough. Next year they will happily be giving state support to people up to £118,000, with the exception of one small group of people—those who might use deferred payments—who will be confined to the £23,250 of non-housing assets. So I hope that there will not be any boasting about the coming of the £118,000 in the months to come, because the noble Baroness has told us that she thinks £23,250 is enough.

Anyway, we have debated this long enough. I hope that those who think that £23,250 is rich will vote with the Government and those who think £23,250 is not very rich will vote with me and the Opposition in favour of this Motion.