User contributions towards home support can be designed to protect those on lowest incomes
Supporting people to live in their homes and communities is a key component of Sláintecare. However, previous research has shown that despite increased public investment in home support in recent years access to home support services varies across the country. Many households also purchase care in the private market either in addition to, or as a substitute for, publicly funded home support hours.
The Department of Health is currently developing a statutory scheme for home support services. This seeks to guarantee more equitable access to the care that people require to enable them to remain in their own homes for as long as possible. Demand for home support is likely to rise in the future due to population ageing. A new Economic and Social Research Institute (ESRI) report entitled Home Support Services in Ireland: Exchequer and Distributional Impacts of Funding Options examines funding options for the new scheme for individuals aged 65 and older.
Currently, publicly funded home support is provided free of charge. One potential way to help fund an expanded scheme would be to introduce contributions from some home support recipients as is the case in countries like Germany, Sweden and the Netherlands. Depending upon how they are designed, user contributions may raise varying amounts of funding and give different levels of protection to those on low incomes. This study examines different funding scenarios and finds that the design of such contributions greatly impacts the percentage of expenditure covered by recipients and the distributional impacts.
- A flat-rate contribution (€5 per home support hour) would raise up to one-fifth of the total cost of the scheme. However flat-rate contributions fall more heavily on those with low incomes, creating affordability problems for some individuals.
- Means-tested contributions protect those on lower incomes, with contributions starting only when income is above a threshold (such as the minimum or living wage) and rising gradually in line with income.
- Designing recipient contributions with appropriate means-tested thresholds could help ensure minimal impacts on the poverty rate of those over 65.
- Caps on contributions could help ensure that those with high home support needs do not face very large costs of care.
While some funding options such as flat-rate co-payments would take proportionally more from those on lower incomes and cause the elderly poverty rate to increase by 1.4 per cent, most options examined which means-test user contributions result in those on higher incomes contributing proportionally more towards the cost of their care. Those on lower incomes, for example below minimum or living wage amounts, would then continue to receive full state support. These scenarios result in minimal increases in poverty.
Dr Claire Keane, an author of the report and a Senior Research Officer at the ESRI, said:
“While publicly funded home support is currently provided free of charge population ageing will lead to increased demand in the future. While the expansion of current schemes could help tackle this it will come at an increased cost for the state. User contributions taking account of ability to pay and need could help fund an expanded scheme and can be designed in a way as to protect those on lower incomes and with high care needs”.
Minister for Mental Health and Older People, Mary Butler, said
"This report is the final output from the programme of research that the ESRI is undertaking to support the Department of Health to progress the development of the new home support scheme. The scheme will provide equitable and transparent access to high-quality home care services to support people to stay well in their homes and communities. This research will form an important part of the evidence base for the development of a sustainable funding model for home support services in the context of our ageing population. In parallel to this research, the home support pilot has been fully operational since January 2022; the roll out of InterRAI as the standard care needs assessment tool is being progressed through the recruitment of 128 InterRAI Care Needs Facilitators; and a National Home Support Office will be established in quarter 2 of this year”.
The results discussed above assume that the value of a person’s primary residence is not included in the means test for co-payments, which is based on the means definition for medical cards. If it were to be included the scheme would generate substantially more for the exchequer (up to 86 per cent of the cost of home support) but would be likely to create affordability issues for home support recipients and a rise in the poverty rate of those aged 65 and over if no deferral option for charges was provided.