Presentation – Final Report: COSTING OF OLDER PERSONS BILL

1. Presentation – Final Report: COSTING OF OLDER PERSONS BILL Tuesday, 24 February 2005 A

2. ‘Growing old should be a period when one’s contribution to society is acknowledged and valued. In poor communities, old people make a valuable contribution to households as carers for children, People With Disabilities, and those affected and infected by HIV and AIDS. This [Older Persons] Bill therefore strives to maintain and increase the capacity of older persons to support themselves and contribute to the well-being of those around them.’ MEMORANDUM ON THE OBJECTS OF THE OLDER PERSONS BILL, SOUTH AFRICA

3. PRESENTATION OVERVIEW Introduction Section A: PROJECT Section B: LEGAL ASSESSMENT Section C: FISCAL ASSESSMENT Conclusion Recommendations

4. Section A: PROJECT • Background • Objectives • Scope • Approach and Methodology • Process • Challenges

5. Section A: PROJECT: BACKGROUND • Objectives of the OPB • Maintain and promote the status, safety and security of Older Persons. • Maintain and protect the Rights of Older Persons as recipients of services. • Regulate the registration of facilities for Older Person; and • Combat the abuse of Older persons. • The project had to consider; • Fiscal risks • Administrative costs and cost drivers; and • Institutional Arrangements.

6. Section A: PROJECT: OBJECTIVES • Understand the contents of the bill in terms of an implementation plan; • Analyze each component of the Bill in order to cost the OPB scope; • Assess the fiscal and budgetary implications. • Determine the cost implication at a National, provincial and local levels across the various sector. • Determine the cost implications of priorities as determined by the DSD for the three-year MTEF cycle period. • Analyze the various components of the bill, and thereafter cost the components. • Facilitate consultative processes jointly with national dept and Treasury.

7. Section A: PROJECT APPROACH Comprehensive Analysis of the OPB and proposed Amendments. Comparative Analysis between the OPB, its proposed Amendments and the Aged Persons Act; and Cost Driver Analysis to effect implementation and maintenance of OPB.

8. Section A: PROJECT:METHODOLOGY • Legal Matrix – compulsory and discretionary obligations. • Costing model • Social Services Delivery Model.

9. Section A: PROJECT: APPROACH + METHODOLOGY • Process included: • Consultations • Desk Top Audits and Comparative Analyses • Legal and Social Assessment • A National Reference group established to validate the costing approach, and initial costing.

10. Section A: PROJECT: PROCESS • The costing is to be done for the following programmes: • Residential Care • Community Services and • Home Based Care • Poverty Relief • Capital Costs • National and Provincial Administration

11. Section A: PROJECT: CHALLENGES • Short timelines and project falling into holiday period. • Actual drafting of the Bill. • Lack of adequate, reliable and valid information. • Incomplete data from provinces. • Non standardization of services - disparity in current costing.

12. Section B: LEGAL ASSESSMENT • Purpose • Approach and Methodology • Findings and Analysis • Implications for Litigation

13. Section B: LEGAL ASSESSMENT: PURPOSE • Gain understanding of and insight into objectives and goals that the legislature proposes to attain i.t.o Bill, and determine practical and financial implications ) • This assessment was done in order to identify and determine the cost drivers that may impact on the implementation of the relevant provisions of the Bill • To identify the rights and obligations (both compulsory and discretionary obligations) • To identify the risks of litigation related to the implementation of the provisions of the Bill)

14. Section B: LEGAL ASSESSMENT: APPROACH + METHODOLOGY • Unpack provisions of the Bill, • Assess meaning and impact of the provisions of the Bill, • Assignment of responsibilities (nationally and provincially) and cost implications thereof, • Identify the provisions of the Bill that would, in probability, lead to litigation

15. Section B: LEGAL ASSESSMENT: IMPLICATIONS FOR LITIGATION • General Provisions throughout the bill which increases the administrative role of the state, both at National and Provincial Level. • Chapter 13 s(12) Protection of Older Persons ( Rights based approach to service delivery) • Chapter 13 s(17) Keeping of a register of abuse of Older Persons. • Chapter 2 – New conditions for the care of Older Persons in Residential Facilities.

16. Section C: FISCAL ASSESSMENT • Limitations: • Norms and standards for service delivery within developmental paradigm • Pre-determined costing models • Regulations of the Bill • Accurate data on existing services and targets • Lack of uniformity in funding services of both government and NGO’s • However the draft service delivery model and draft costing models were used as a base for costing

17. Section C: FISCAL ASSESSMENT: NATURE + SCOPE OF SERVICES DELIVERY • The norms upon which the costing was done is based upon policies and service delivery models of the Department of Social Development • The baseline data of older persons used is based on the number of older persons who are currently in receipt of the Old Age Grant, as these have been means tested ito vulnerability • The norm of 2% of older persons who are frail is derived from the Department Policy Framework(1995) • There are currently 2081528 beneficiaries of old age grant(stats from Grant section on 26/01/05

18. Section C: FISCAL ASSESSMENT • The assessment also considered the following: • The total number of older person (2000 census) • Estimate number of vulnerable older persons requiring services • Residential Care -2% • Community based care -20% • Home Based Care and Frail -1.5% • Economic Empowerment and Dev 1000 / province • Promotion and Protection - as per service delivery norms of the department

19. Section C: FISCAL ASSESSMENT • Scope and Extent of Current Services • Analysis per province of • Old Age Homes • Services Centres • Overall subsidies to NGO’s for other programmes In all cases analysis was done i.t.o • Number of facilities • Subsidy per province • Total number of residents/beneficiaries • Unit cost

20. Section C: FISCAL ASSESSMENT • Approach and Methodology Through consultation with provinces, thecore programmes were identified as follows: • Promotion and Protection of Older Persons • Community Based Programmes • Day care services • Service Centres • Assisted living • Home Based Programmes • Intergenerational programmes • Economic Empowerment and Development • Residential Care • National and Provincial Departmental Administration

21. Section C: FISCAL ASSESSMENT • Costing Model Variables: • Demand variable: Volume of particular service required • Process and Input variables: Cost drivers in the delivery of services • Cost Variables: Cost of the different inputs required to deliver the service Total cost of the service = D x P/I x C

22. Section C: FISCAL ASSESSMENT: NATURE + SCOPE OF SERVICES DELIVERY • According to statistics from Provinces the Government is currently spending R 299,142,320 on subsidies for old age homes reaching 31,845 beneficiaries who are currently in residential care • According to Statistics South Africa there are 3.28 million older persons in the country

23. Section D: Conclusion • The draft costing models were then presented to the department and the treasury • These costs were found inappropriate in terms of affordability • The consultants were advised to review the costing based on specific guidelines provided by the department • The figures will be computed and the final report in this regard should be available in March 2005

24. Recommendations • It is recommended that • the Select Committee takes note of the progress made • the work on the costing of the Bill be finalised within the next two weeks