The future of Attendance Allowance
This Commons Library Briefing Paper covers developments since the Government's announcement in December 2015 that it would consider “giving more responsibility to councils in England, and to Wales, to support older people with care needs – including people who, under the current system, would be supported through Attendance Allowance.” The proposal was dropped by the Government in January 2017. This paper gives background information on the Government’s proposals, the decision not to proceed with any changes, and reaction from local government and other stakeholders.
Attendance Allowance is a social security benefit for older people with care needs, first introduced in 1971. It is non-contributory, non-means-tested, and tax free. It can be claimed from aged 65 onwards, and is payable at two rates, depending on the person’s care needs (£55.10 a week or £82.30 a week, at 2016-17 rates).
As of May 2016, 1.45 million people were receiving Attendance Allowance in Great Britain, with 878,000 (61%) receiving the higher rate. Of the 1.45 million recipients, 1.0 million – more than two-thirds – were aged 80 or over. More women than men receive Attendance Allowance – 943,000 compared with 505,000. Total expenditure on Attendance Allowance in Great Britain in 2016-17 is forecast at £5.5 billion.
December 2015 announcementIn December 2015 the Government announced that it would consider “giving more responsibility to councils in England, and to Wales, to support older people with care needs – including people who, under the current system, would be supported through Attendance Allowance.” The proposal was put forward within the context of proposed wider changes to local government finance and powers, including allowing local councils to retain 100% of business rates collected in their area, while at the same time devolving additional responsibilities to local authorities.
This was followed up with a consultation launched in July 2016 on the business rates reform. As part of this, the Government sought views on a range of functions and responsibilities that could be funded locally from retained business rates. This included Attendance Allowance, although no further details of what devolution might involve were given.
Responses from stakeholdersOrganisations representing local government voiced opposition to the proposal to devolve responsibility for Attendance Allowance citing, among other factors, the additional cost pressures it would place on local authorities. Organisations representing older people, disabled people, and welfare rights advisers also called on the Government not to go ahead with transferring responsibility for AA to local councils.
Relevance to Scotland, Wales and Northern IrelandUnder the Scotland Act 2016, Attendance Allowance and other disability benefits are devolved to the Scottish Parliament, so any changes following on from the current proposals would not have affected Scotland. The situation for Wales and Northern Ireland was less clear. The Government initially stated that it was considering devolving responsibility for AA to local authorities in England and Wales, but more recent comments referred to England only and the business rates consultation covered England alone. Social security in Northern Ireland is devolved, but there is a long-standing policy of maintaining parity with Great Britain in social security arrangements.
Decision not to implement the proposalsFollowing concerns raised by local government stakeholders, the Communities and Local Government Secretary Sajid Javid announced in January 2017 that Attendance Allowance would no longer be considered as part of the business rates reforms.