3.2 Charging and Financial Assessment – Principles

Audio & Quick Read Summary

1. Introduction to Charging and Financial Assessment

1.1 Introduction and principles

The Care Act 2014 provides a single framework for charging for care and support.

When Lancashire County Council arranges care and support to meet a person’s needs, it may charge the adult, except where it is required to arrange that care and support free of charge. The overarching principle is that people should only be required to pay what they can afford.

1.2 Possible outcomes

Following a financial assessment, there are three possible outcomes:

• Lancashire County Council will provide no financial support towards the required care and support.
• Lancashire County Council will provide some financial support, but not enough to cover the full personal budget amount. In this case, the person or carer will be expected to contribute the difference;
• Lancashire County Council will provide full financial support. In this case, the person or carer will not have to make any contribution towards the cost of their personal budget.

1.3 Capital limits

A financial limit, known as the ‘upper capital limit’, exists for the purposes of the financial assessment. This sets out at what point a person is entitled to support from Lancashire County Council to meet their eligible needs. Full detail is set out in Annex B: Treatment of Capital.

The ‘upper capital limit’ is currently set at £23,250. Below this level, a person can seek means tested support from Lancashire County Council.

In the financial assessment, capital below the ‘lower capital limit’ – currently set at £14,250 – is not taken into account in the assessment of what a person can pay in tariff income assessed against their capital. Where a person’s resources are below the lower capital limit of £14,250 they will not need to contribute to the cost of their care and support from their capital. However, for adults receiving care and support in locations other than in a care home the limits of £23,250 and £14,250 are simply minimum sums, and local authorities have discretion to set their own higher capital limits if they wish, provided they are no lower than £23,250 for the upper limit and £14,250 for the lower limit.

A person with more in capital than the upper capital limit can ask Lancashire County Council to arrange their care and support for them even though they will not make a financial contribution. Where the person’s needs are to be met by a care package in a care home, Lancashire County Council may choose to meet those needs and arrange the care, but is not required to do so. In other cases, the authority must meet the person’s eligible needs if requested. However, these people are not entitled to receive any financial assistance from Lancashire County Council and must pay the full cost of their care and support until their capital falls below the upper capital limit.

2. Charging and Financial Assessment

2.1 Services that cannot be charged for

Lancashire County Council cannot charge for certain types of care and support which must be arranged free. These are:

• intermediate care, including reablement, which must be provided free of charge for up to six weeks;
• community equipment (aids and minor adaptations). Aids must be provided free of charge whether provided to meet or prevent/delay needs. A minor adaptation is one costing £1,000 or less;
• care and support provided to people with Creutzfeldt-Jakob Disease;
• aftercare services/support provided under section 117 of the Mental Health Act 1983 (see Joint Policy for the Management of Section 117 Aftercare, Reviews and Discharge );
• any service or part of service which the NHS is under a duty to provide. This includes Continuing Healthcare (see Continuing Healthcare (NHS) chapter) and the NHS contribution to registered nursing care;
• more broadly, any services which local authorities are under a duty to provide through other legislation may not be charged for under the Care Act 2014;
• assessment of needs and care planning may also not be charged for, since these processes do not constitute ‘meeting needs’.

In all other circumstances, the local authority has a power to charge, especially around charging for carers’ services, reablement or intermediate care beyond six weeks, and adaptations over £1000.

2.2 Carrying out a financial assessment

The legal framework for charging is set out in the Care Act 2014. When choosing to charge for service, Lancashire County Council must not charge more than the cost that it incurs in meeting the assessed needs of the person. Any administration fee relating to arranging that care and support cannot be recovered. The only exception is when a person with eligible needs and assets above the upper capital limit has asked Lancashire County Council arrange their care and support on their behalf. In such cases, Lancashire County Council may apply an administration fee to cover costs, but this must not be higher than the cost incurred in arranging that care and support.

Where Lancashire County Council has decided to charge, it must carry out a financial assessment of what the person can afford to pay and, once complete, it must give a written record of that assessment to the person, explaining how the financial assessment has been carried out, what the charge will be and how often it will be made.

2.3 Mental capacity

See also Mental Capacity chapter.

At the time of the assessment of care and support needs, Lancashire County Council must establish whether the person has mental capacity to take part in the assessment. If the person lacks mental capacity, it is important to find out if the person has any of the following as the appropriate person will need to be involved:

• enduring power of attorney (EPA);
• lasting power of attorney (LPA) for property and financial affairs;
• lasting power of attorney (LPA) for health and welfare;
• property and affairs deputyship under the Court of Protection;
• any other person dealing with that person’s affairs (e.g. someone who has been given appointeeship by the Department for Work and Pensions (DWP) for the purpose of benefits payments).

People who lack mental capacity to give consent to a financial assessment and who do not have any of the above people with authority to be involved in their affairs, may require the appointment of a deputy to manage property and financial affairs. Family members can apply to the Court of Protection for this, or Lancashire County Council can apply if there is no family involved in the care of the person.

2.4 Capital

In the financial assessment, the person’s capital is taken into account unless it is subject to one of the disregards set out in the regulations and described in Annex B: Treatment of Capital. The main examples of capital are property and savings. Where the person receiving care and support has capital at or below the upper capital limit (currently £23,250), but more than the lower capital limit (currently £14,250), they may be charged £1 per week for every £250 in capital between the two amounts. This is called ‘tariff income’. For example, if a person has £4,000 above the lower capital limit, they are charged a tariff income of £16 per week.

2.5 Income

In assessing what a person can afford to pay, Lancashire County Council take into account their income. However, to help encourage people to remain in or take up employment, earnings from current employment must be disregarded when working out how much they can pay. There are different approaches to how income is treated depending on whether a person is in a care home or receiving care and support in their own home. Full details are set out in Annex C: Treatment of Income in care homes and other settings.

2.6 ‘Light touch’ and full financial assessments

2.6.1 ‘Light touch’ financial assessments

In some circumstances, a ‘light touch’ financial assessment can be carried out. This involves gathering sufficient financial information to satisfy Lancashire County Council that the person or carer is:

• eligible for no financial support from the local authority;
• eligible for full financial support from the local authority.

It does not involve gathering comprehensive information; a light touch assessment can be useful in the following circumstances:

• where a person or carer knows they have significant financial resources and does not wish to undergo a full financial assessment and is willing to pay the full charge;
• where a person or carer has limited capital financial resource and is in receipt of benefits, demonstrating that they would not be able to contribute to their care and support costs;
• where the service to be provided has only a nominal charge that a person is able and willing to meet that charge, and where doing so would not leave them with an income below the minimum income guarantee limit (MIG – the amount of disposable income set by the Government on which a full assessment of finances would be based) (Care and Support Statutory Guidance para 8.23).

When deciding whether or not to undertake a light touch financial assessment, Lancashire County Council will consider both the level of the charge it proposes to make, as well as the evidence or other certification the person is able to provide. The person must be informed when a light touch assessment has taken place and be told that they have the right to request a full financial assessment.

2.6.1 Full assessment

A full financial assessment involves gathering more comprehensive information about the adult’s or carer’s capital and income. Examples of when a full assessment may be required include:

• when the person or carer is not clear about their level of resources;
• where there is reasonable cause to question the level of resource being declared;
• where the levels of capital resource fall somewhere between the minimum and maximum financial limits i.e. upper and lower capital limits, meaning that the amount of financial support from Lancashire County Council cannot be accurately determined without a full assessment.

2.7 Deprivation of assets and debts

Sometimes people may try to deliberately avoid paying for care and support costs through depriving themselves of assets – either capital or income. Where Lancashire County Council believes they have evidence to support this, it will follow Annex E: Deprivation of Assets concerning the deprivation of assets. In such cases, the person may be charged as if they still possessed the asset or, if the asset has been transferred to someone else, Lancashire County Council may seek to recover the lost income from that person.

Where a person has accrued a debt, Lancashire County Council may use its powers under the Care Act to recover that debt. The circumstances of the case will be considered before deciding a course of action.

Ultimately, the Lancashire County Council may issue County Court proceedings to recover any debt. However, this power should only be used after other reasonable alternatives for recovering the debt have been exhausted. Further details on how to pursue debts are set out in Annex D: Recovery of Debts.

3. Charging for Care and Support in a Care Home

See Residential Care Charging Policy.

4. Charging for Care and Support in other Care Settings, including a Person’s own Home

See Non Residential Care Charging Policy.

5. Charging for Support to Carers

See Eligibility Criteria for Carers and Carers’ Budgets