Cash to consumers: what we can learn from overseas

As Australia moves towards more individualised funding approaches in home care, Community Care Review looks at the implementation of personal budgets overseas for some valuable lessons.

As Australia moves towards more individualised funding approaches in home care, Community Care Review looks at the implementation of personal budgets overseas for some valuable lessons.

In the federal budget last month the government announced that the Aged Care Approvals Round for home care packages will be abolished with funding to be allocated directly to consumers, rather than providers, from February 2017.

While the shift in power from the provider to consumer is just beginning in Australia, ‘cash for care’ schemes, where consumers hold the funds to purchase their own care, have been operating in countries such as the UK, the US, Germany, Sweden and France since the 1990s.

Internationally these programs have ranged from unrestricted cash payments with little accountability or government oversight to more managed programs with tighter controls on how the funding can be spent and the use of managed budgets.

Restrictions on how entitlements can be used and the quality assurance mechanisms and monitoring in place have varied significantly between models.

Hiring family and friends as personal carers has also been a popular feature in a number of international CDC programs such as in the US and UK.

Despite variations between programs, the overriding goal is to devolve power to the consumer so they can direct and control their own care.

Dr Carmel Laragy
Dr Carmel Laragy

Dr Carmel Laragy, a senior research fellow with the Centre for Applied Social Research at RMIT, has followed the introduction of individualised funding for 15 years. She says user choice models emerged out of the disability movement when younger people demanded to use their entitlements in ways not possible under traditional service programs.

For example, flexible funding programs have been used to employ carers during holidays, participate in social outings and leisure activities and purchase equipment and modifications, Dr Laragy tells Community Care Review.

Dr Laragy, who has spent time in Sweden observing the implementation of individual budgets in that country, recalls the impact an individual budget had on a young man with a disability who was able to move out of his group home and employ a personal carer of his choice to support him in independent accommodation.

“He went from being in a group home, with people he couldn’t choose, workers he couldn’t choose and having to go to a day centre where he was required to do a set of activities, to arranging his life in a way that he wanted, with careful planning and support,” she says.

“He was very keen on jazz and with the help of his support worker he stopped going to his day centre and instead went to jazz clubs in the evening and he got a lifestyle he loved. Fundamentally, it’s about being able to use the money allocated to you in more flexible and creative ways.”

A spectrum of choice

While having responsibility for self-managing a budget and purchasing care is one option, Dr Laragy says, “it’s not the essence” of CDC approaches.

“There might only be a small number of people who take full responsibility for their individual budget but it’s not ‘doing everything’ that is important, it’s being able to choose which bits you want to do and which bits you don’t want to do.

“Some people may want no change, but there will be a whole lot of people who do want some measure of choice and control. In our traditional service systems, service providers have had all of the control.”

The UK experience

In the UK, older people received the right to a direct payment (the cash equivalent of services paid directly to a person to arrange their own support) in 2000, following a campaign spearheaded by young people with disabilities.

However, take-up was low and varied widely between local authorities. In 2007-08, direct payments made up no more than 6 per cent of any local authority’s expenditure on adult social care, and older people were consistently less likely to choose direct payments than younger consumers with disabilities.

As part of a second phase of reform, the UK then piloted individual or personal budgets, which can be taken as a cash payment held by the consumer or managed by a third party, such as a local authority or home care provider, on a client’s behalf.

The UK Care Act 2014 makes it clear that all people eligible for ongoing council funded social care should receive a personal budget.

In March 2015, umbrella group Think Local Act Personal (TLAP) released a report analysing the most up-to-date information on older people and personal budgets in the UK.

The report found that while the number of older people receiving personal budgets was increasing, coverage was still far from complete and continued to vary significantly between councils, especially around the provision of direct payments.

Older people were the majority users of personal budgets (51 per cent). However, only 15 per cent of these older consumers were receiving a direct payment.

While older people do experience positive benefits from having a personal budget, these are not as marked as for other groups, the report said.

TLAP director Sam Bennett said greater flexibility in how funds are spent, reduced processes, genuine involvement of people and their families at all stages, and providing independent information and support systems should increase the success and effectiveness of personal budgets for older people.

The report noted:

“It is quite reasonable that for some older people gaining swift improvement in general wellbeing and the quality of key relationships is what counts most.”

On the issue of the risk of abuse, the TLAP report said the evidence to date suggests personal budgets, including direct payments, put older people at no greater risk than other forms of care and support.

Older people who reported their views were included in a support plan and processes were easy were more likely to report feeling safe.

Dr Laragy says that keeping people connected to their wider communities and building networks through individualised budgets can act as an important safeguard for vulnerable clients.

Factors influencing implementation of cash payments

A study led by Dr John Woolham from Coventry University released in February 2015 found a range of factors impact the take-up and success of direct payments among older people in the UK – including a lack of services and information, administrative burdens on budget holders, small budgets, low expectations among older people and a risk-averse culture among staff.

The research explored whether the care needs of older people were best served by taking their personal budget as a direct payment, and compared staff, consumer and carer experiences of social care between those with a direct payment and those with a managed personal budget.

According to the study’s findings, having a direct budget did not always translate into actual control over care. For example, the timing of taking a bath or a shower was frequently a compromise between what a consumer would like and what was possible, and in over a third of direct payment cases people were given no choice at all.

However, older people receiving council-run services fared even worse.

Due to inadequate resourcing, subsidies allocated to older people’s care packages were low, which meant that once basic care and support services were paid for, there was little, if anything, left over to meet the social needs of older people.

While councils were working to make direct payments more useful and easier to administer, managers acknowledged there was a long way to go.

Dr Woolham argued that older people may want different things to younger adults and may be less interested in choice than in organising support and care that offered continuity and reliability.

“Control may be more effectively exercised through opportunities to develop a relationship of trust and ideally friendship with paid carers,” he said.

When it comes to older people, he said local authorities, may need to think less about choice and more about the quality of the care relationship.

Funding constraints

Ronda Held
Ronda Held

The implementation of CDC overseas has been affected by significant budget cuts to social care, says Ronda Held, manager of Home Care Today, a COTA-led CDC resource, and a close observer of the international experience of CDC.

“In the UK, their resource allocation systems, like our Aged Care Assessment Teams, have gone from being facilitators of individual budgets to being ‘budget controllers’ and trying to keep people out of the system because they have a lot less money in the system. That immediately impacts on implementation,” Held tells CCR.

“Also, at a local level, we hear anecdotally that councils have limited the choices of people just to save money, for example by restricting service choice to two or three contracted providers because they can get a bulk deal from them and their budgets can stretch further. That is certainly a risk in the current environment,” she says.

“CDC requires a good resource allocation and system of entitlement so that people are supported based on individual need.”

Dr Laragy agrees strongly about the importance of financing CDC programs adequately. “All the other changes will be useless, or worse than useless, if people don’t get enough funding,” she says.

Held says overseas CDC projects have also demonstrated the importance of separating advice and capacity building from a care recipient’s individual budget for services. For example, Held says in the Cash and Counselling model in the US, counselling and assistance is offered alongside a person’s care package and is utilised as needed.

In Australia, the costs for translating and interpreting services and travel are directly funded out of a person’s consumer directed care package.

“Individuals could be on the same level package and be getting very levels of direct service based on where they live, what language they speak and how much they need a case manager to help them, and that’s not very equitable,” says Held.

“The clear message from the overseas experience is older people need good information, simple administrative systems and opportunities to learn about the system through consumer capability building to be able to make the most out of personal budgets and that’s what we are grappling with in our Australian CDC project.”

Acceptance and championing by providers

A critical success factor in consumer directed approaches is the attitudes and willingness of case managers to give consumers a more active role in their care.

For example, case managers in the UK and the US have reported initially feeling hesitant about transferring responsibility to their clients and expressed anxiety over the decisions consumers will make, which has influenced uptake.

While there are important lessons to be learned from overseas and from the disability sector, ultimately the attitudes of older  Australians and the implications for aged care won’t be known until a cash payment option is trialled locally, such as in the area of respite care as recommended by the Productivity Commission.

* * * *

Cashing out: what produces the best results?

Results from the 2014 National Personal Budget Survey, published by Think Local Act Personal, In Control and Lancaster University, show the best outcomes for people who have a personal budget are generated when:

  • people have their views heard through the assessment, budget setting and care and support planning processes.
  • people get support to help them manage their personal budget from a broker or their provider rather than the council, or family or friends.
  • people are enabled to spend their personal budget on community and leisure activities rather than on traditional care and support services.
  • people employ a personal assistant to meet their needs

This article appears in the current May issue of Community Care Review.

Don’t miss an issue of Community Care Review, Australia’s new publication covering home care and support, respite and reablement. To subscribe to CCR please visit, and follow us on Twitter.

Tags: cash to consumers, cdc, ceda, Centre for Applied Social Research, community-care-review-slider, consumer-directed-care, Dr Carmel Laragy, Sam Bennett,

2 thoughts on “Cash to consumers: what we can learn from overseas

  1. In the spirit of supporting the CDC program this is going to require specific and contextualised training to C.A.S.E Managers to enable them to support the consumer to set goals and manage outcomes, whilst at the same time become skilled in brokerage and quality control.

    C.A.S.E as an acronym represents Care. Advice. Support. Evaluation and the management of these mechanisms that enable and re-able the consumer to do more for themselves and allowing the provider to support the goals and improve the outcomes.

    At the ACCLM we have researched the CDC and its project directives, understanding the need for science implementation through the design of new contemporary education and training, focus tools and quality frameworks to assist with transformational leadership in this evolving care sector.

    Some of the barriers will be resistance and resilience for the new values to be lead throughout providers and communities of consumers so that positive partnerships in care are maintained. It will be interesting to see the outcomes as they move forward.

  2. As the father of a 45 year old son who is physically disable and uses the services of home care in America, I’m very familiar with the program of self-directed care in Pennsylvania.

    As the CEO of Leading Home Care … a Tweed Jeffries company in Louisville, KY, we work closely with private pay home care in the US and Canada. Private pay, non-medical home care for persons with chronic diseases who need assistance with the activities of daily living is the fastest growing segment of health care in America. There are over 25,000 small companies providing private pay home care services.

    The other big payer for non-medical home care are the state Medicaid programs. Medicaid is the insurance program for low income individuals. It is funded by the federal government and the states, and operated by the states.

    I will be coming to Australia in January and February 2016 to speak for the National Speakers Association of Australia and I’d love to connect with leaders in home care.

    Best regards,

    Stephen Tweed
    Leading Home Care … a Tweed Jeffries company
    Stephen at Leading Home Care . com

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