Report
The Long-term Care (Jersey) Law 201- introduces new arrangements for funding long-term care for Jersey residents.
Jersey’s population is ageing. By 2040, those aged 65 and over will account for 30 per cent of the Island’s population – double what it is currently.
As more of us are living longer, healthier lives, many more of us will need long-term care in our twilight years. Therefore, the demand for and cost of providing care is going to rise substantially. This poses significant financial challenges to government and individuals alike and many countries are now reviewing how their societies fund long-term care. The UK is currently looking at the issue once again.
Long-term residential care and nursing care are very expensive. This only becomes apparent to many families when they need to organise care for a relative. Many find the current system of accessing financial assistance in respect of the costs of care complex and difficult to understand and some have questioned its fairness.
At present, the onus is largely on the individual to pay for their own care. However, many hard-working Jersey families are finding that the cost of this care means they are using up their savings and even having to sell their home.
Recognising the need to review the current funding arrangements for long-term care, the Minister for Social Security published a Green Paper (R5/2010) early last year. Over 550 individuals responded to the consultation, as well as a number of other stakeholders and interested parties.
In light of the responses, the Minister issued a White Paper (R131/2010) setting out his preferred way forward. The proposals reflected the general consensus around a scheme that moved away from the burden of individual liability to one where responsibility for paying for long-term care was shared across the community as a whole.
In Guernsey, a similar scheme to fund institutional long-term care has been operating successfully for a number of years. The need for change in Jersey was highlighted in Senator Breckon’s Scrutiny Panel Report.
A key goal of the new scheme is the removal of the financial uncertainty and worry that many people currently face as they or a close family member moves into care.
Another key aim is to give people choice in how they are cared for and where that care is delivered. This gives effect to the wishes expressed by many to stay in their own home for as long as possible.
As a result of introducing this scheme, the amount many people will have to pay out of their savings when they need long-term care will be much less than under current arrangements. The amount will recognise the fact that that we all have to meet our day to day living costs whether we are in care or not. The need to use the value of the family home to pay the care fees will largely be a thing of the past. This will help safeguard the inheritance that many families have worked so hard for.
Summary of the scheme
A new long-term care benefit will be introduced that will meet a large part of the care fees. There will be different rates of benefit according to the level of care required. Individuals requiring care will pay a co-payment towards day to day living costs – costs that we all incur. Means-tested assistance will be available for those who cannot meet the co-payment themselves. Individuals will be permitted to ‘top-up’ the benefit to pay for a more expensive room or facilities if they wish.
Access to the long-term care benefit will be based on an objective assessment of care needs and on meeting residency requirements. Care needs will be assessed by trained professionals using an objective placement tool.
Currently, the intention is that there will be two residency requirements: at least ten years’ continuous residence as an adult at anytime and one year’s residence immediately before claiming the benefit. The residency conditions will be subject to a States decision.
The long-term care benefit will apply to stays in approved care homes and will also fund approved care packages covering high-level care provided at home. The benefit will only cover long-term care provided on the Island.
A new ring-fenced fund will be established based on compulsory contributions from employees, the self-employed, and pensioners. The initial contribution rate of around 1.5 per cent will be fixed for five years. In addition, current States funding of up to £30 million a year will be paid into the Fund. The benefit will be funded on a ‘pay as you go’ basis (today’s contributions paying for those claiming the benefit today) with a small buffer built up to protect against temporary variations.
The benefit will be available to all eligible claimants including those already in care at the time the scheme starts. The scheme will be administered by the Social Security Department.
It is the intention that the new long-term care benefit will be available in 2013.
The primary legislation giving effect to these proposals on long-term care funding accompanies this Report. The Law presented is an enabling framework with the exact detail of the long-term care scheme appearing in Regulations and Orders.
Article by article
In this section, the articles of the proposed Law are summarised and further details provided of what it is intended will be implemented following approval of this legal framework.
Article 1 is an interpretation provision. In particular, ‘’fund’’ is defined to mean the long-term care fund.
Article 2 establishes a new ring-fenced fund under the control of the Minister for Social Security, which will be used only to pay for long-term care.
Money raised from the dedicated Social Security contributions paid by individuals will be directed into this fund.
In the Green Paper consultation, the option of funding long-term care through regular compulsory contributions was rated the most acceptable option. All employees, including the self-employed, will be liable for contributions.
Contributions will be levied on all annual earnings up to the upper earnings limit of £150,000 if proposals currently before the States are adopted.
As in Guernsey, pensioners (except those on lower incomes) will also be expected to contribute. This will make the burden more manageable for all and support inter-generational fairness – especially as the effects of the ageing population are felt. It is expected that only between a third and a half of pensioners will be liable for the contribution. Today’s pensioners will be among the first to benefit from the new funding arrangements.
The intention is to set the contribution rate at a level which will sustain the fund for at least five years without further increases. Current estimates suggest that a contribution rate of around 1.5 per cent is required over the initial five-year period, but this is subject to further detailed calculations.
This figure will need to increase in the decades that follow, as the disparity between the number of older people requiring care and the number of younger people working is felt more acutely, but increases in the rate will be minimised by the inclusion of contributions from an increasing number of pensioners paying into the scheme.
It is expected that the bulk of existing States funding on long-term care – amounting to around £30 million a year and delivered through Social Security and Health and Social Services – will be directed into the new fund. However, the budget for some services (such as special care arrangements and assistance for those without ten years’ residency) currently funded from the £30 million will remain outside the long-term care fund. These arrangements need to be confirmed, with final details approved in Regulations.
The Fund will only be used to pay for:
- the main long-term care benefit;
- means-tested financial assistance for those who cannot make the necessary co-payment towards the cost of the care home fees;
- the cost of buying special equipment necessary for care at home; and
- the cost of administrative and other tasks linked to the Fund.
Allowing the Fund to purchase equipment for home care provides for the possibility of the Fund maintaining a supply of specialist equipment to be hired out to individuals as needed. The cost of the hire would be included in the approved care package – see Article 7.
Article 3 sets out the eligibility criteria to receive a benefit from the Fund.
Access to the long-term care benefit will be based on satisfying criteria in a number of specific areas:
To qualify for the benefit, the individual will have to be an adult (i.e. aged 18 or over).
An individual’s care needs will be assessed through a placement tool, administered by healthcare professionals (see Article 5). This system is already operating successfully as a first step for those applying for assistance with long-term care fees through the current Income Support arrangements and for Health and Social Services placements. To qualify for the benefit, the placement tool must identify that the individual has high-level care needs.
Residency requirements will need to be met. The residency requirements will be set down in Regulations, which will be subject to States approval.
The Minister will propose that the individual seeking care will have to have at least ten years’ continuous residence in Jersey as an adult at any time and one year’s residence immediately before claiming the benefit.
This means that, in effect, most potential recipients will, through working or retirement, have contributed to the fund for a minimum of ten years during the course of their lives. Residence in the Island as a child will not count towards the residency condition, except in the case of young adults requiring care.
To access the benefit, the individual must have secured a place in what is termed an ‘approved care home’ or be in receipt of an ‘approved care package’ provided at home. (Definitions of these are covered under Articles 6 and 7.)
A condition of accessing the benefit is that the individual commits to pay their contribution to the fee levied by the care provider that relates to their day to day living costs – the co-payment. When added to the long-term care benefit it will cover the total cost of a place in a care home. If someone is unable to pay the full co-payment then they will be able to access means-tested help after a financial assessment that will take into account their income and assets and those of their partner.
The long-term care benefit will only be available to individuals who, in the absence of this scheme, would be liable to pay for their care. In other words, the benefit is not available to those who would not be expected to pay for their care – for example, those detained in hospital against their will under the Mental Health (Jersey) Law 1969 because they pose a risk to themselves or others.
Although there is no formal link to an individual’s contributions history, it is a condition that individuals have paid the contributions that they were liable for, and are not subject to any legal proceedings under the Social Security Law or the Long-Term Care Law.
Article 4 covers the benefits that will payable under the scheme
Everyone who meets the eligibility criteria will receive the long-term care benefit. This will cover a major part of the cost of their care, but will not cover the day to day living costs of being in a care home. The claimant will be expected to make a contribution – termed the co-payment – towards these costs. If the claimant cannot afford to pay the full co-payment, then they can apply for additional means-tested assistance, which is also paid from the Fund.
The level of the long-term care benefit will be set by reference to the overall standard cost of a providing the required type of care package in a care home – accordingly, there will be a number of different levels of long-term care benefit, based on the exact level of care required.
These levels and the accompanying fees will be finalised during 2012. It is likely that there will be different benefit levels covering, for example: residential, higher residential and different levels of nursing care (also taking into account the special needs of dementia care).
Whatever the level of care required, the amount that the individual is expected to contribute in the form of their contribution – the co-payment – towards the overall gross fees will be the same. It is the long-term care benefit that will vary to reflect the higher cost of the more expensive types of care.
The levels of benefit will be set so that when combined with the contribution required from the individual the total amount will be sufficient to secure the required level of care in a regulated care home.
The contribution required under the new arrangements in the form of the co-payment will be considerably less than the full cost of care. It will be much more affordable for many families and will help to protect family assets and savings.
Choice is an important feature of the new scheme and individuals, subject to their means, will be free to choose the home they prefer and pay for higher-specification accommodation – such as a superior room or a room with a view – or to call on additional services if they wish. They will pay the extra cost as a “top-up” in addition to the standard co-payment.
Care homes will carry the responsibility for ensuring that an individual can continue to meet the top-up payment for a reasonable period without exhausting their funds so that they do not need recourse to the Fund for means-tested assistance at a later date.
For those who cannot afford to meet the co-payment, means-tested assistance will be available, subject to a financial assessment. All income and assets of the individual and their partner will be taken into account.
In general, all regular income will be used towards meeting the co-payment. If this income is below the level of the co-payment, means tested assistance will be provided if the assets of the claimant (and their partner) fall below certain limits.
The Minister will finalise the details of the asset limits during 2012. The following values are indicative.
For homeowners, acknowledging the special status of the main residence, family homes worth up to £750,000 will be disregarded from the assessment of assets, with homeowners allowed to hold other capital of up to £25,000 and still be eligible for financial assistance with the co-payment.
Where the main residence is worth more than £750,000, an individual will be given assistance with the co-payment for the initial three months of care to allow time for families to make arrangements to meet the co-payment.
For non-homeowners, assistance will be provided if their capital and savings are under £100,000. They would be expected to use any sum above this amount to meet the co-payment before qualifying for assistance.
Someone who has five or more years’ residency but less than the ten years required to qualify for the long-term care benefit will be eligible for support with their care fees on a means-tested basis, as now, through Income Support and will be subject to the current Income Support rules that include consideration of homes within the means test.
Means-tested assistance with the co-payment will only apply for the amount necessary to secure a standard room. Top-ups will only be an option open to those paying the full co-payment themselves.
Article 5 covers provisions relating to the long-term care assessment of the individual.
In order to be confirmed as in need of long-term care, a person will be assessed – through the placement tool – as requiring permanent help with activities that are an essential part of normal daily living (such as bathing, dressing, grooming, eating). This help has to be required for the rest of the person’s life.
The tool is an aid to identifying the care setting most appropriate to meeting the needs of an individual by selecting the level of assistance required under various categories.
This care assessment can only be undertaken by health care professionals qualified to do so, such as nurses or social workers.
Recognising that individuals’ care needs may change, regular assessments may be undertaken and their care adjusted accordingly – an individual’s needs may be reassessed such that they need to move from residential to nursing care, for example.
To ensure consistency, completed placement tools will be subject to regular monitoring and inspection to ensure that the integrity of the system is maintained.
Articles 6 and 7 provide definitions for ‘approved care homes’ and ‘approved care packages’ that can be delivered at home.
Work on an updated Regulation of Care Law is being undertaken by Health and Social Services. When complete, all care homes, including those that are States-run will have to be registered under the revised Regulation of Care Law.
One of the key aspects of the new scheme is a recognition that there is an strong desire on the part of many older people to stay in their own home and retain their independence for as long as possible.
It is proposed that the long-term care benefit will be available to help fund care packages at home where qualified professionals have deemed it appropriate and safe to do so.
It is intended that the long-term care benefit will be available for care in the home if an individual’s care needs are assessed as being such that they would otherwise qualify for entry into a care home.
Individuals receiving an approved care package at home will not be required to make a co-payment themselves as they are already meeting their everyday living costs. However, they will be able, within reason, to top up the care benefit if doing so allows them to stay at home, but still under an approved care package.
Currently, suppliers in the domiciliary (home) care sector are not regulated, but the intention is that they will be in the future under the new Regulation of Care Law. Social Security will work closely with Health and Social Services next year to determine the level of support that will be available for care at home in 2013. This may include the signing of service level agreements with suppliers in advance of the new Regulation of Care Law.
Articles 8 to 10 cover the administration of benefits.
The procedures for claiming and paying out benefits will be finalised and published in Orders.
If an individual is dissatisfied with a decision regarding their eligibility for the long-term care benefit, then there will be scope for them to appeal to a tribunal – the Social Security Tribunal or the Medical Appeal Tribunal as set up under existing Social Security and Income Support legislation.
These articles also cover the expenses of tribunal members; offences and penalties in connection with making false benefit claims; and attempts to commit offences.
Articles 11 to 15 inclusive cover administration of the long-term care fund, including provision for accounts of the Fund to be prepared annually and laid before the States, and actuarial reports concerning the Fund to be prepared every three years and laid before the States.
Articles 16 to 18 cover various miscellaneous provisions.
Implementation
If the States approves this Proposition, the Minister for Social Security intends that subordinate legislation will be prepared over the next 12 months to establish the exact detail of the scheme, including the level of the long-term care benefit, the benefit administration process, and confirmation of the level of contributions.
Financial and manpower implications
This Law in itself does not have any financial and manpower implications, but it does provide for Regulations and Orders that will.
The costs of developing the scheme ahead of any funding available through contribution liability will be borne from existing resources.
During the development and implementation phase there will be a requirement to seek temporary manpower to carry out specific tasks such as the assessment of existing care recipients.
All the costs associated with carrying out the assessments and administering the scheme will be confirmed at a later date. Ultimately, these will be borne out of contributions paid into the dedicated long-term care fund.
gov.je