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Parliament has passed three statutory instruments which came into force on 1 October 2001, which have an impact on the way that residential placements are funded. The following is a brief description of their impact taken from the explanatory notes of legislation. The regulations only apply to England.

The National Assistance (Residential Accommodation) (Relevant Contributions) (England) Regulations 2001.

Section 55 of the Health and Social Care Act 2001 makes provision for local authorities and residents in residential accommodation provided for or arranged by the local authority to enter into a deferred payment agreement. Briefly, the agreement allows a resident to defer part of the payment which he is liable to pay to the local authority (that is, his "relevant contributions"), and in return the resident will allow the local authority to secure payment of the total amount of relevant contributions by granting the local authority a charge in their favour on his home.

These regulations set out how the "relevant contributions" are to be determined, by calculating the difference between the amount a person would have to pay for his accommodation when the value of his or her home is taken into account, and the amount he or she would have to take into account if it were not.

The National Assistance (Residential Accommodation) (Additional Payments) (England) Regulations 2001.

In general, local authorities only have to fund a residential care placement up to the amount that they would normally pay for such a placement. The explanatory note reads:-

These regulations make provision for additional payments to be made so that a person who has been assessed as needing residential accommodation can choose to live in accommodation which is more expensive than the local authority would usually pay for someone with that person's assessed needs. Under these Regulations the additional payments may be made by a third party, including a liable relative who is not making payments to maintain the resident. In certain circumstances, that is when the 12 weeks property disregard applies or when a deferred payment agreement is in place, the resident himself may also contribute any or all of the additional payments.

The National Assistance (Residential Accommodation) (Disregarding of Resources) (England) Regulations 2001.

These regulations vary the capital amounts that must be disregarded when a local authority decides whether care and attention is "otherwise available" to a person when assessing their need for section 21 National Assistance Act 1948. The current limit on the disregard is (effectively) £18,500, but these regulations also include the value of a person's house when they have entered a "deferred payment agreement" for the payment of fees (see the first set of regulations above).

Stephen Cragg

Doughty Street Chambers