Bob Champion: Why advisers need to brush up on LTC planning

Bob Champion looks at the impact of the Covid-19 pandemic and urges advisers to brush up on their long-term care planning knowledge and skills

I just received my council tax bill for the next year and was surprised that my local authority hadn’t taken advantage of their available option to increase the tax by 2% to pay for social care. They maintain that, because of the effects of Covid-19, they do not need to extend the local social care budget.

I would be interested in seeing the data on which that decision was made and hope for those in my local authority area who provide or receive care, they are correct in their assumptions.

Where I live, for most weeks of the pandemic, we were fortunate. The number of new infections, number of hospitalisations, and number of deaths were well below the national average. So why has Covid had such an effect on those who need care? The numbers who have died while in receipt of local authority care should be relatively small.

There will always be new people who need social care for the first time each year. Covid should not have made a large impact on that number. Also, care costs are increasing, and I cannot believe care services and facilities in my locality are so good there is not room for investment and improvement.

In a normal year, I would expect my local authority to increase its care budget, using whatever means is possible, but it has chosen not to.

Long-term effects

The long-term effects of Covid on the care system have yet to come to light. Will more people try to avoid care homes as they feel safer at home? How many voluntary carers (e.g., those who look after their spouse or parents) have passed away? What will be the impact of ‘Long Covid’?

I have seen estimates that suggest the numbers with ‘Long Covid’ may be four or five times the number of deaths. That could mean half a million people suffering from the condition. But we do not know what it is? How long will it take before we do?

People are left with respiratory ailments. People have developed cardiovascular issues. People have been left generally run down and unable to undertake their normal daily activities. Then there are those who have developed mental health issues due to their Covid experiences.

Us humans are resilient, given time – say six months – some will overcome or learn to live with their current condition. Others will not.

For those who will not, will their care be classed as continuing health treatment or will it be looked upon as support for a disability?

The distinction is important, the former comes under the NHS. The latter means that the individual must source their own care possibly with a means-tested local authority contribution.

Many do not qualify for any contribution and are therefore referred to as ‘self-funders’. There could be many disputes between Health Service Trusts, local authorities and individuals as to who pays.

Local authorities often drive a hard bargain with those who supply adult care services. This often means that self-funders who use the same providers pay a lot more for the same service. Some even maintain that self-funders who use the same providers subsidise those who are funded by the local authority.

Advice needs

Over the coming months we are likely to see an increase in those seeking advice on how to fund their own or a relative’s care. Are you familiar with the obligations of Health Trust and local authorities in this area of advice?

As a financial adviser you see a number of your clients approaching you for assistance in guiding them through the minefield of their rights and what they are entitled to. Then comes the next question, how do they adapt their financial plans to fund their contribution?

Hopefully not too many have been made long-term disabled by the virus. We just do not know. From your business point of view, it may be a good time to brush up on your knowledge of, or partner with, an expert in long-term care.

Bob Champion is chairman of the Air Later Life Academy