Conclusions and recommendations of the Commission on Funding of Care and Support

4th July 2011

Fairer care funding

Conclusions and recommendations of the Commission on Funding of Care and Support

The Commission’s remitThe Government asked the Commission to recommend:

– how best to meet the costs of care and support as a partnership between individuals and the state;

– how people could choose to protect their assets, especially their homes, against the cost of care;

– how, both now and in the future, public funding for the care and support system can be best used to meet care and support needs.

Setting the context

Conclusions and recommendations of the Commission on Funding of Care and Support

The number of older people is increasing

0%

20%

40%

60%

80%

100%

65-69 70-74 75-79 80-84 85+

Growth in the number of older people in England 2010-2030

Conclusions and recommendations of the Commission on Funding of Care and Support

Flexible societies are good at adaptingProportion of UK population aged 65 and over

0%

5%

10%

15%

20%

25%

1901 1921 1939 1961 1981 2001 2021

Conclusions and recommendations of the Commission on Funding of Care and Support

We are four times richer than in 1948Gross domestic product, UK

£0bn

£200bn

£400bn

£600bn

£800bn

£1,000bn

£1,200bn

£1,400bn

£1,600bn

1948 1958 1968 1978 1988 1998 2008

Conclusions and recommendations of the Commission on Funding of Care and Support

Social care is one element of state supportPublic spending on older people in England 2010/11

Social security benefits

Social care

NHS

£0bn

£50bn

£100bn

£150bn

Conclusions and recommendations of the Commission on Funding of Care and Support

Care costs are uncertain and can be very highExpected future lifetime cost of care for people aged 65 in 2009/10

£0k

£50k

£100k

£150k

£200k

£250k

£300k

0% 20% 40% 60% 80% 100%

Problems with thecurrent system

Conclusions and recommendations of the Commission on Funding of Care and Support

Funding has not kept up with demandExpenditure and demand: older people’s social care (2009/10 prices)

Expenditure

Demand

£6.0bn

£6.5bn

£7.0bn

£7.5bn

£8.0bn

2005/06 2006/07 2007/08 2008/09 2009/10

Conclusions and recommendations of the Commission on Funding of Care and Support

People face high costs in the current systemMaximum possible asset depletion for people with £150k residential care costs

5% 25% Median 75% 95%

£0k

£25k

£50k

£75k

£100k

£125k

£150k

£175k

£0k £50k £100k £150k £200k £250k £300k £350k £400k £450k £500k

Assets on going into care

Max

imum

pos

sibl

e as

set d

eple

tion

Percentiles of housing wealth

Conclusions and recommendations of the Commission on Funding of Care and Support

Some people can lose most of their assetsMaximum possible asset depletion for people in residential care

5% 25% Median 75% 95%

0%

20%

40%

60%

80%

100%

£0k £50k £100k £150k £200k £250k £300k £350k £400k £450k £500k

Assets on going into care

Max

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pos

sibl

e as

set d

eple

tion

Percentiles of housing wealth

£150k lifetimecost

£100k

£75k

Capping the cost of care

Conclusions and recommendations of the Commission on Funding of Care and Support

A cap removes the risk of very high costsExpected lifetime costs for people going into care in 2010/11, by percentile

£0k

£50k

£100k

£150k

£200k

0% 20% 40% 60% 80% 100%

Conclusions and recommendations of the Commission on Funding of Care and Support

A cap removes the risk of very high costsExpected lifetime costs for people going into care in 2010/11, by percentile

£0k

£50k

£100k

£150k

£200k

0% 20% 40% 60% 80% 100%

Conclusions and recommendations of the Commission on Funding of Care and Support

And offers significant asset protection Maximum possible asset depletion for people with £150k residential care costs

5% 25% Median 75% 95%

0%

20%

40%

60%

80%

100%

£0k £50k £100k £150k £200k £250k £300k £350k £400k £450k £500k

Assets on going into care

Max

imum

pos

sibl

e as

set d

eple

tion

Percentiles of housing wealth

Current system

£35k cap

Conclusions and recommendations of the Commission on Funding of Care and Support

But we also need to reform the means testThe effect of extending the means test on the amount of support people receive

Currentsystem

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20%

40%

60%

80%

100%

£0k £25k £50k £75k £100k £125k

Conclusions and recommendations of the Commission on Funding of Care and Support

But we also need to reform the means testThe effect of extending the means test on the amount of support people receive

Reformed system

Currentsystem

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20%

40%

60%

80%

100%

£0k £25k £50k £75k £100k £125k

Conclusions and recommendations of the Commission on Funding of Care and Support

Extending the means test helps the poorestMaximum possible asset depletion for people with £150k residential care costs

5% 25% Median 75% 95%

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20%

40%

60%

80%

100%

£0k £50k £100k £150k £200k £250k £300k £350k £400k £450k £500k

Assets on going into care

Max

imum

pos

sibl

e as

set d

eple

tion

Percentiles of housing wealth

Current system

£35k cap

Conclusions and recommendations of the Commission on Funding of Care and Support

Extending the means test helps the poorestMaximum possible asset depletion for people with £150k residential care costs

5% 25% Median 75% 95%

0%

20%

40%

60%

80%

100%

£0k £50k £100k £150k £200k £250k £300k £350k £400k £450k £500k

Assets on going into care

Max

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pos

sibl

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eple

tion

Percentiles of housing wealth

£35k cap with extended means test

Current system

Conclusions and recommendations of the Commission on Funding of Care and Support

The reforms reduce the costs individuals face

Initial level of wealthMaximum spend on care

£40,000

£50,000

£70,000

£100,000

£150,000

£9,000

£12,000

£18,000

£28,000

£35,000

Conclusions and recommendations of the Commission on Funding of Care and Support

General living costs− People in residential care would need to

make a contribution towards their general living costs (such as food and heating).

− People have to pay these costs if they live at home.

− Believe this contribution should be fixed - recommending between £7,000 and £10,000 p.a. (as the maximum possible contribution).

The cost and impactsof reform

Conclusions and recommendations of the Commission on Funding of Care and Support

All spending: £697bn

Conclusions and recommendations of the Commission on Funding of Care and Support

All spending: £697bn

NHS: £103bn

Conclusions and recommendations of the Commission on Funding of Care and Support

All spending: £697bn

NHS: £103bn

Social security for older people: £85bn

Conclusions and recommendations of the Commission on Funding of Care and Support

All spending: £697bn

NHS: £103bn

Social security for older people: £85bn

Education: £61bn

Conclusions and recommendations of the Commission on Funding of Care and Support

All spending: £697bn

NHS: £103bn

Social security for older people: £85bn

Education: £61bn

Defence: £44bn

Conclusions and recommendations of the Commission on Funding of Care and Support

All spending: £697bn

NHS: £103bn

Social security for older people: £85bn

Education: £61bn

Defence: £44bn

Social care and disability benefits for adults: £27bn

Conclusions and recommendations of the Commission on Funding of Care and Support

All spending: £697bn

NHS: £103bn

Social security for older people: £85bn

Education: £61bn

Defence: £44bn

The cost of reform: £2bn

Social care and disability benefits for adults: £27bn

Conclusions and recommendations of the Commission on Funding of Care and Support

Who benefits from the reforms?Public expenditure on social care, by income quintile

£0.0bn

£0.5bn

£1.0bn

£1.5bn

£2.0bn

£2.5bn

Bottom 2 3 4 Top

Reforms

Current system

Conclusions and recommendations of the Commission on Funding of Care and Support

Who benefits from the reforms?Additional public expenditure as a proportion of income, by income quintile

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

Bottom 2 3 4 Top

Other recommendations

Conclusions and recommendations of the Commission on Funding of Care and Support

Improved assessments− For lasting reform, we think there needs to be an

improved eligibility and assessment framework.

− We are calling for:

− national eligibility threshold;

− portable assessments; and

− the Government to develop a new, more objective, assessment scale as the basis for the future system.

Conclusions and recommendations of the Commission on Funding of Care and Support

More coherent and aligned care and support− The whole care and support system should

work better together.

− Supportive of integration between health and social care

− Want to see better alignment of assessment processes between social care, disability benefits and health.

− Recommending AA is re-branded, to make its purpose clear.

Conclusions and recommendations of the Commission on Funding of Care and Support

We are recommending other reforms including:

− A major campaign to improve information and advice

− Better information and needs assessments for carers

We think there is potential for innovation in care delivery models to really develop (e.g. extra care housing).

We also think there will be an opportunity for the financial services sector to help people with their contributions.

Thank you