PROJECTIONS OF INCOMES, PENSIONS AND LONGTERM CARE

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PROJECTIONS OF INCOMES, PENSIONS AND LONG-TERM
CARE

• WORKPACKAGE 5

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PROJECTIONS OF PENSIONS AND LONG-TERM
CAREWORKPACKAGE 5 (WP5)

• WP5 aims to produce projections of expenditure on
  pensions and long-term care to 2031 and beyond
• WP5 involves researchers from
• University of Essex
• Pensions Policy Institute (PPI)
• Personal Social Services Research Unit (PSSRU)

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WORKPACKAGE 5 MODELS

• Three models -
• CARESIM model of older peoples incomes and
  savings
• PPI models of pensions
• PSSRU model of long-term care
• Jointly produce projections of expenditure on
  pensions and long-term care.

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AIMS OF THE PSSRU MODEL

• The PSSRU model aims to make projections of
• Numbers of disabled older people
• Users of long-term care services
• Long-term care expenditure public and private
• Social care workforce

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NUMBERS OF DISABLED OLDER PEOPLE

• Age (five bands) and gender
• Disability (six groups- IADLs and ADLs)
• Household type (five categories)
• Housing tenure (two categories)

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INFORMAL CARE

• Current modelling
• demand modelled as a function of age, gender,
  disability, household type, housing tenure
• by source (spouse, adult children, others)
• supply modelled using marital status
• based on 2001/02 GHS
• Planned modelling
• to incorporate availability of living children in
  modelling demand for supply of informal care
• new analyses of informal care using 2002/03,
  2004/05 ELSA

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SERVICES AND BENEFITS

• Residential care in residential homes, nursing
  homes and hospitals
• Home care, day care, meals
• Day hospital, community nursing, chiropody
• Assessment and care management
• Disability benefits

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EXPENDITURE

• PUBLIC
• Social services net
• NHS
• Disability benefits used to fund care
• PRIVATE
• User charges
• Private purchase of services

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CARESIM

• Uses micro data on older peoples income and
  capital assets (Family Resources Survey)
• Simulates the means-tests for residential and
  home care
• Calculates what each older person in the sample
  would pay for care should they need it
• Ages the sample to 2022

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LINKS BETWEEN CARESIM PSSRU MODEL

• PSSRU model provides weights within care type and
  age/gender/marital status/housing tenure group
• Weights used to adjust CARESIM results for
  differences in care needs across these groups
• CARESIM provides to PSSRU model
• projected trend in of clients eligible for
  state support
• projected average of charges met by state
  supported service users
• projected average of user charges and private
  payments met using disability benefits

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The PPI Aggregate and Distributional Models
PPI Aggregate Model
Cell-based labour market projection
Aggregate private pensions
Aggregate SERPS/S2P
Aggregate BSP
Future income growth
PPI Distributional Model
Distribution of pensioner incomes state and
private
Pension Credit
CTB / HB (planned)
Income tax
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Model Links

• Common data and assumptions
• Demographics
• Economics
• Current pensioners incomes
• Policy options
• Potential links between the models
• Housing tenure
• Disability, caring and working over SPA
• Future pensioners incomes

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Final Outputs

• Aggregate
• Public expenditure on long-term care
• Private expenditure on long-term care
• Expenditure on state pensions
• Levels of private pension income
• Distributions of
• Future pensioners incomes
• Private and public long-term care expenditure

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SCENARIOS (1) DRIVERS OF DEMAND

• Mortality rates link with WP1
• Disability rates link WP2
• Household composition link with WP3
• Housing tenure link with Caresim
• Real rises in unit costs

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SCENARIOS (2) PATTERNS OF CARE EXAMPLES

• Supply of informal care balance between formal
  and informal care link with WP4
• Patterns of formal services balance between
  home-based and residential care
• Role of assistive technology

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SCENARIOS (3) FINANCING SYSTEM EXAMPLES

• Current means-tested system
• Reforms to treatment of housing assets
• Reforms to treatment of savings
• Reforms to treatment of income
• Means-testing with limited liability
• Partnership arrangement
• Free personal care