The draft Care and Support Bill is with the scrutiny committee in the House of Commons. Although it contains provision for local authority delivery of an information and advice service for people entering the care system, it does not refer to financial advice. However, there appears to be cross-party agreement that this is a key area and that helping people make the best of their resources should be included in the Act.
Currently self-funders receive little and in some cases no advice about financial options to help them cope with the catastrophic loss that can occur when care is needed.
In meetings with the financial services sector, Paul Burstow MP, who chairs the scrutiny committee, has indicated that he recognises the importance of including financial advice in the definition. He has welcomed access to any advice that will maximise the resources of those in care. He believes this should be timely and so included in preventative strategies as well as at the time of entering care.
Local authorities seek solutions
Local authorities have not wished to stray into this area in the past, but as self-funders who run out of money fall back on them for continued care funding, they have increasingly recognised the financial impact this has on themselves and on older people. Many local authorities are looking into how they can direct self-funders to specialist advice that might delay or prevent their funds from running out.
The Care and Support Bill is likely to include provisions to reinforce this duty and ensure national take-up of such schemes to benefit all those needing care. This was a recommendation of the Dilnot Commission.
Financial advice will therefore be a key area for local authorities to consider. It is unlikely that they will provide this advice themselves. They are more likely to be commissioners of specialist care funding advice.
Deferred payment scheme
The Bill also contains provisions for a universal deferred payment scheme. It will allow authorities to fund care for those who are self-funders and recoup the costs through a legal charge on the individual’s property payable after death. A variation of this scheme is already in place but is not widely used. It is currently interest free, but the Bill proposes that authorities will be able to charge interest on the loan.
Local authorities do not have the skills or expertise to determine interest rates, repayment terms or valuations, so independent financial advice will be an essential component of this scheme if there is to be consumer confidence in it.
The scheme will place financial advisers at the heart of care funding and is a tremendous opportunity for those who are working in this area.
Tish Hanifan is director of the Society of Later Life Advisers