31/01/06 - Proposed changes to residential care charges from April 2006.

Proposed changes
Personal Expenses Allowance and Capital Limits

3. Details of the proposed changes are set out below.

i. the level of personal expenses allowance (PEA) to £19.60 to reflect the rise of 4.2% in average earnings over the last twelve months; ii. the capital limits to £12,750 (lower limit) and £21,000 (upper limit) to reflect the anticipated GDP deflator of 2.46%. (Please note that the new capital limits will automatically apply to home care charges as minimum requirements.)

4. These changes will come into effect on 10 April. The additional costs to councils will be covered by an increase in income generated through charges for residential care, due to expected increases in residents' incomes and savings.

Savings disregard

5. From April 2006, DWP plan to increase the Savings Credit rates so that they peak at £17.88 for individuals and £23.58 for couples, to reflect the rise in average earnings over the last twelve months.

6. The Department of Health also intends to lay further regulations by early March 2006 to increase from the beginning of April 2006:

i. the level of the savings disregard to £5.05 (maximum) for an individual, in line with average earnings; and

ii. the level of the savings disregard to £7.50 (maximum) for couples, in line with average earnings.

7. These changes will come into effect on 10 April. The additional costs to councils will be covered by the additional income generated through charges for residential care, due to the increases in average Savings Credit payments.

Other Matters

8. The Regulations may also need to be amended to take account of changes being made to DWP Regulations which will come into force at the beginning of April. These are:

i. the Social Security (Miscellaneous Amendments) (No 2) Regulations 2005; and

ii. the Social Security (Young Persons) Amendment Regulations 2005.

9. These Regulations contain changes in relation to Income Support; Jobseekers Allowance; Council Tax Benefit; Housing Benefit; Pension Credit; and Child Benefit. They are currently being examined to assess where there are reads across which need to be reflected in the Assessment of Resources Regulations to ensure that they are consistent and up to date.

Source : DoH