Protection of the Rights of the Elderly in Home Ownership (Hansard, 29 January 1985)

§ Mr. Neil Thorne (Ilford, South)

I beg to move, That leave be given to bring in a Bill to enable those who go into Part III Accommodation under the National Assistance Act 1948 to assign up to a half share in their freehold or long leasehold property to a companion who has been residing with them for not less than five years and to assign the remaining share of their freehold or long leasehold property to the local authority, the capital value of which share shall become an interest in the local authority old people's home in which the assignor is to reside. In recent years we have been making major strides in introducing the pride and joy of home ownership to those in all walks of life. As a result, the percentage of owner-occupiers has increased from 52 per cent. in 1973 to 60 per cent. in 1983, and it continues to rise. Having spent a lifetime of care and thrift, it comes as something of a shock for the elderly to be deprived of their assets in the evening of their lives. This is a matter of concern to many who deal with the elderly, including Age Concern.

When the aged enter an old people's home, they are expected to make a contribution towards their keep in addition to the £30 or thereabouts that is deducted from their old-age pensions if they have assets exceeding £1,200. Those in that position will find that a sliding scale is applied which will consume their assets at a rate of 26 per cent. per annum. This is a much higher percentage than the one which was felt to be too high when it was taken up in a private notice question earlier this afternoon. The sliding scale moves to the full cost of staying in an old persons' home, which can be as much as £150 a week. Unless a spouse or child under 16 years of age is left at the previous principal residence of the person entering the home, this property can be included in the individual's assets. This leads in many instances to considerable anxiety and hardship, especially when the person left behind has been living in the premises and sharing the cost of upkeep for many years, and finds himself or herself thrown out by a local authority which is anxious to reduce the residual bill that is left for the ratepayers.

In my constituency, there were two sisters who lived together in a family house from 1934. They lived first with their parents and then they shared the costs of upkeep between themselves. Unfortunately, their parents left the property to the elder sister, who was 18 years the elder, on the understanding that she in turn would leave it to her younger sister. When the elder sister had to go into an old persons' home at the age of 84, the local authority applied pressure for the sale of the house and offered a bed-sitting room flat to the younger sister.

After considerable negotiations, the authority agreed to the purchase of a one-bedroomed flat over which it has a charge. It allows the younger sister to occupy the flat, but sends her bills quarterly to cover the balance of her elder sister's charges after receiving her old-age pension and occupational pension. Currently the bills exceed £3,000 after the balance between the sale of the home and the purchase of the flat has been taken into account. This is a very worrying factor for a retired lady of nearly 70 years of age without other means.

It is open to the local authority to waive these charges but, as a prudent authority over the past 20 years, it has little money to spare, especially in the light of the current 179 rate support grant proposals. Apparently, if there is a shortfall in payment to a local authority old people's home, this is made good by the ratepayers. Those who cannot meet the full repayment in a private or charitable home have their payments made up by the taxpayer. That hardly encourages conscientious, caring local authorities to look after their elderly residents in these days of rate capping and manpower targets.

In 1984 the Government issued a consultative document on new regulations and guidance for assessing ability to pay charges for part III accommodation. That document was followed last Thursday week, on 17 January, with a local authority circular which, in paragraph 6, stated: Paragraphs 17 to 23 of the Memo of Guidance give advice to authorities as to some circumstances in which they should exercise discretion. But these are not the only circumstances in which it might be appropriate to do so. It would also be reasonable for example for an authority to exercise its discretion where a person who has been caring for the resident continues to live in the dwelling. Authorities should look at each case on its merits and decide, having regard to all the relevant circumstances, to what extent (if any) the value of a former dwelling should be reduced in the assessment. My Bill will seek to allow by right all those entering old people's homes to assign up to a half share in their principal residence to a companion who resides with them for not less than five years. My Bill also seeks to permit those entering council old people's homes to purchase a share of up to a full proportion of the total value—for example, a one fortieth interest in a 40-place home. That will enable weekly charges to be reduced to a share of the running costs and will enable the occupier to benefit from any appreciation in the value of the property. Any shortfall 180 in meeting the running costs out of pensions or other funds would be accumulated with interest and set off against the capital value on vacation of the premises, with the local authority repurchasing under a right of pre-emption at the district valuer's figure.

At the moment, many advisers recommend that their elderly clients should dispose of their assets before entering a home so that they can leave the bill to be met by the ratepayer. I believe that many would welcome the opportunity to purchase an interest to give themselves the dignity of home ownership throughout the remainder of their lives and avoid the present encouragement to dispose of their assets prematurely. Clearly, this would be of advantage not only to the elderly but to ratepayers and taxpayers.

Question put and agreed to.

Bill ordered to be brought in by Mr. Neil Thorne, Sir Gerard Vaughan, Dr. Michael Clark, Mr. Gerald Bowden, Mr. Bowen Wells and Mr. Michael Marshall.