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PROJECTIONS OF INCOMES, PENSIONS AND LONG-TERM CARE

PROJECTIONS OF INCOMES, PENSIONS AND LONG-TERM CARE. WORKPACKAGE 5. PROJECTIONS OF PENSIONS AND LONG-TERM CARE: WORKPACKAGE 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

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PROJECTIONS OF INCOMES, PENSIONS AND LONG-TERM CARE

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  1. PROJECTIONS OF INCOMES, PENSIONS AND LONG-TERM CARE WORKPACKAGE 5

  2. PROJECTIONS OF PENSIONS AND LONG-TERM CARE:WORKPACKAGE 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)

  3. WORKPACKAGE 5 MODELS • Three models - • CARESIM model of older people’s incomes and savings; • PPI models of pensions; • PSSRU model of long-term care • Jointly produce projections of expenditure on pensions and long-term care.

  4. 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

  5. NUMBERS OF DISABLED OLDER PEOPLE • Age (five bands) and gender • Disability (six groups- IADLs and ADLs) • Household type (five categories) • Housing tenure (two categories)

  6. 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

  7. 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

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

  9. CARESIM • Uses micro data on older people’s 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

  10. 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

  11. 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

  12. 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

  13. 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

  14. 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

  15. 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

  16. 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

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