New social care charging circular for local authorities

February 16th, 2017 by Jonathan Auburn

On 8 February 2017, the Department of Health published a new circular for local authorities, addressing charging practices for the 2017/18 financial year. By virtue of section 78 of the Care Act 2014 local authorities are required to comply with this Circular.

The capital limits, used for determining a person’s necessary contributions to the cost of their care, remain the same: set at £23,250 for the upper capital limit and £14,250 for the lower capital limit. Similarly, the weekly personal expenses allowance, applicable to all people whose care and support in a care home is arranged by a local authority, is unchanged at £24.90 per week. The Minimum Income Guarantee, Savings Credit disregards, and Disposable Income Allowance all continue to be calculated as before.

Aside from reaffirming current charging practices, the circular clarifies the way Local Authorities should set interest rates for Deferred Payment Agreements. Where local authorities charge interest under the deferred payment scheme, this interest must not exceed the maximum amount specified in regulations. The circular makes clear that, going forward, local authorities will need to ascertain the maximum interest rate to apply by checking the latest market gilt rate, which is updated on 1 January and 1 July. The Department of Health will not routinely publish this information; the onus is on local authorities to remain up to date and to apply the correct rates.

Jonathan Auburn

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