* Stretched budget: a freeze on minimum income means people have less money in real terms
Minimum Income Guarantee – a deep financial injustice?
A combination of the failure by the Government to update charging regulations and the financial squeeze which has taken place on local authority budgets has caused major injustice for the most vulnerable and disadvantaged within our society including people with severe learning disabilities. Accidental oversight, or a conscious and deliberate attack by Government on those least able to bear it and argue against it? Brian Collinge weighs the evidence
As father of a son with severe learning disabilities and also a former local authority Chief Executive , I have been looking into how people are now charged for the care they receive from local authorities. Sadly, I have concluded that a combination of the failure by the Government to update charging regulations and the financial squeeze which has taken place on local authority budgets has caused major injustice for the most vulnerable and disadvantaged within our society including people with severe learning disabilities. I am concerned to understand whether this is an accidental oversight, or is caused by civil service ineptitude or alternatively, is a conscious and deliberate attack by Government on those least able to bear it and argue against it.
Under the Care Act 2014, people qualifying to receive care support from their local authority are subject to an income assessment. If their income exceeds prescribed limits, they have to contribute to the cost of the care that they are receiving. The prescribed amounts and rules which the local authority must follow in assessing people are set out in the Care and Support (Charging and Assessment of Resources) Regulations 2014, laid before Parliament in October 2014. Different arrangements apply to people who enter a care home as opposed to people who receive care in the community. For people receiving care in the community, the regulations prescribed that local authorities must leave those receiving care with sufficient monies to meet their housing costs and any specific allowable disability expenses, plus an amount known as the minimum income guarantee..
The calculation of the minimum income guarantee as set out in the Regulations, was marginally increased by Department of Health circular to Local Authorities number LAC(DH)(2015)1, and these amounts took effect from 6th April 2015. For single people and those with severe disabilities, the 2015 circular defines the minimum income guarantee as follows:-
Basic allowance if over 25 £ 91.40
Disability premium £ 40.35
Enhanced disability premium £ 19.70
In each subsequent year, local authorities have received a circular telling them that there is to be no change in the amounts used to calculate the minimum income guarantee, so the above amounts still apply.
Had the amount been increased in line with the consumer price index (CPI), today’s figure would have been £157.74. If increased in line with the retail price index, the figure would have been £163.73. Thus, depending on which inflation index is used, the most disadvantaged have to pay between £6.29 and £12.28 per week more than they would have had to pay if the regulations and circulars had been adjusted to reflect inflation. To be fair, the CPI is probably the more appropriate index but even so, our most vulnerable have to pay £327 per year more than they would have had to pay because the amounts have not been adjusted to take account of inflation.
But this is only part of the added burden and injustice which is affecting the most disadvantaged and vulnerable disabled within society. The minimum income guarantee is just that, i.e. a minimum. Local authorities do not have to apply the minimum and could leave the most disabled receiving care from them with more than the minimum. Indeed, when first introduced, many local authorities were more generous. Some local authorities, after calculating assessable income minus the minimum income guarantee, only took 75% of the resulting figure. Others took only 85%. Now, the withdrawal of grants from local authorities and the financial squeeze on their budgets has meant that most have moved to taking 100% of the excess over the minimum guarantee. The move from 85% to 100% which local authorities have now generally adopted, will have cost those with high needs around a further £14 to £15 per week or about £754 per year. So in total, in the last three years the most disabled within are society are, as a result of these two influences, nearly £1100 a year worse off.
But yet again, this is not the end of the saga. The basic allowance, disability premium, and enhanced disability premium within the 2014 Regulations, were derived from income support basic allowances and premiums plus a buffer of 25%. However, the income support which people like my son used to receive has now been replaced by Employment and Support Allowance (ESA) and many such people will, because of their level of disability, be classifies as in the support ( unable to work) group of ESA. The equivalent basic allowance and premiums compared to Income support for such people under EAS are as follows.
Basic allowance £ 73.10
Disability premium £ 64.30
Enhanced disability premium £ 16.40
Support group addition £ 37.65
In the above figure of £191.45, the links to the old Income Support premiums and allowances ( see above figure of £151.45) are still in part there. Remember, these old Income Support allowance were enhanced by a buffer of 25% in the 2014 charging Regulations. So, if the basic allowance of £90.50 is discounted by the buffer of 25% you arrive at £72.40, which is close to the figure of £73.10 now used in calculating ESA. Again, if the enhanced disability premium of £19. 45 in the 2014 regulations, is discounted by the 25% , it results in a figure close to the figure of £16.40. However, the Disability figure of £64. 30 of ESA is higher than the 2014 Regulation figure of £39.85 even though this latter figure had been enhanced beyond the then income support premium by the 25% buffer. In addition, for those under ESA who are classified as in the support group, there is a new premium of £37.65. On the face of it therefore, the Government has been quite generous to people with severe disabilities and especially to those in the support group. This appears to be a welcome and generous act by Government towards those in greatest need. However, for those who need social care, this generosity is an illusion and the increased ESA disability benefits are in reality, no more than a hidden subsidy to local authorities. This is because, since the move by local authorities, to take 100% of income above the minimum income guarantee, it is the local authority that will benefit from any income above the minimum income guarantee and not the ESA recipient. If the Government had updated the 2014 Regulation premiums by substituting the new ESA premiums for the former enhanced income support premiums,, there would have been a beneficial increase for the individual. If Government had gone further and done what was done when the 2014 regulations were introduced and substituted the ESA premiums plus the 25% buffer enhancement, they would have been seen to be especially generous and caring towards the most disabled. Perhaps, in the existing financial climate expecting the old regulations to be updated to the new ESA allowances plus 25% would not be realistic but surely the failure to reflect ESA rates in the minimum income guarantee and or adjust the 2015 rates for inflation must be unfair.
As a parent of someone with sever disabilities, I have always agreed that the whole of the care element of disability living allowance ( now incorporated into PIP) should be, as it is, taken into account and used to contribute to his local authority care costs. However, I also thought that the added premiums of income support that he received were there to help with his day to day living expenses and quality of life, in recognition that he could not and would not ever be able to work. Used in this way the disability premiums he received would distinguish his income level from somebody without disability who could work but who was currently unemployed. Now I am confused. My son receives £118.35 ( £64.30 + £16.30+£37.65) in ESA supplements. However, because the 2014 charging regulations controlling the minimum income guarantee remain unchanged, he is only allowed to retain £60.05 ( £40.35+ £19.70 ). The rest is taken by his local authority for his care. If the excess is intended to be used to support his local authority care costs rather than his day to day living,, why is it not paid as part of his PIP care element rather than ESA?. If the intention of the added disability premiums under ESA were to offset local authority care costs, is not the Government being false in claiming that the changes to ESA are generous and help people with severe disabilities to have a level of income higher than they would under income support?
This is a sad saga but I find the following three aspects curious, worrying and disappointing.
Firstly, given that this is a major injustice affecting our most needed, why has there been no publicity or protest about it. Initially, I was inclined to think this was because people with learning disability are a small group and unlike the elderly, do not carry significant political power. However, some of the more severely disabled elderly people, including people with dementia who are not in a care home are, similarly affected. That said, the elderly unlike people with learning disability, do benefit from the triple lock on pensions. Also, unlike most people with sever learning disabilities, before old age affected their well being, they would have had the opportunity to hold down meaningful jobs, save for their old age and have families
Secondly, although there has been no publicity about this injustice, there has been a lot of publicity ( and Government action to legislate but not implement) for changes to the Care Act . If these changes had been implemented as enacted, there would now be a cap on how much people had to pay for their own care. This change has been delayed pending a green paper on the whole topic of social care. The main driving force behind the demand for a cap, is the wish of better off elderly people to pay less for their own care so as to be able to be able to leave more to their offspring or to help them buy a property. Whilst I can understand why such parents may feel that the present system is unfair, they would consider this unfairness a minor irritant if they, as the parents of most kids with sever disability have had to do, had had to battle through out the life of their child to get such basics as education , respite care, a care package and ultimately some sort of reasonable hope that when, as parents, they came to die, there child would be OK and live in a society that actual cared
Thirdly, who should be blamed for this injustice? Ultimately, a Government Minister must be responsible, provided they knew about it and possible even if they did not.
When the Care and Support (Charging and Assessment of Resources) Regulations 2014 are passed, they were laid before Parliament. But what about Parliamentary oversight of whether change and updating to regulations is needed. Can a senior civil servant simply issue an annual circular to local authorities telling them that the Regulations are not to be updated for inflation or would he or she be required to get the approval of a Minister. The annual circulars that authorised no change to the Regulations state that they were all issued under section 78 of the Care Act 2014. Under Section 78 (3) of the Act, in issuing guidance or making regulations under the section, the Secretary of State must have regard to the general duty of local authorities under Section 1 ( promotion of individual well being. ). It is difficult to reconcile how telling local authorities for 3 consecutive years, not to adjust amounts prescribed under regulation for inflation, is consistent with the well being duty under section 1. I feel that these circulars may even therefore be legally challengeable.
Links to the 2014 Regulations and to Government annual circulars to local authorities are given below.
*(Aleksandr Berdnikov/Wikimedia Commons)