V1 FINAL REPORT: COSTING OF THE OLDER PERSONS BILL

V5 FINAL REPORT: COSTING OF THE OLDER PERSONS BILL

APRIL 2005

‘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

ANNEXURES

Annexure A: LEGAL ASSESSMENT TABLE

Annexure B PROGRAMME COSTING MODELS

Annexure C: COSTING RELEVANT TABLES

Annexure D: CORE PROGRAMME BREAKDOWN

Annexure E: ROLES AND FUNCTIONS OF THE DEPARTMENT OF

SOCIAL DEVELOPMENT

EXECUTIVE SUMMARY

The mandate of government is to care for, protect and facilitate development of all vulnerable people, including older persons.

Prior to 1994, there was legislation on older persons, but this legislation was outdated and not effective in protecting the rights of older persons and in promoting their independent functioning within society. Furthermore, the previous legislation perceived older persons as passive recipients of services rather than having a role to play in the mainstream of society.

The Older Person’s Bill, gazetted in August 2003, proposes a number of changes to redress the plight of older persons. In addition, the Bill seeks to shift services from an institutional model to a community-based model to ensure that older persons function independently and remain with their families and in the community for as long as they possibly can.

Other changes proposed by the Bill are the promotion of the rights of the older person and ensuring that basic services are accessible to those most in need. The Bill also seeks to set up a register of abuse, and to establish processes and procedures to monitor and assess the effectiveness of the legislation.

The proposed legislation recognizes the critical role played by older persons in society and serves to strengthen their capacity in this regard. The feasibility of the Bill in terms of implementation however, needs to be explored so as to ensure that the goals contained therein are attainable within the fiscal constraints of the country. The Bill therefore has been costed with the foregoing being taken into account.

The approach adopted in undertaking the costing exercise was, firstly, to analyse the Bill from a legal perspective to identify the rights and obligations, both compulsory and discretionary, of the various parties recorded in the Bill and the risks of litigation related to implementation; and, secondly, to conduct a fiscal assessment to determine the various cost drivers (as informed by the legal assessment) and their respective unit costs, relevant costs of the core programmes to be implemented, the demand for the service in terms of coverage and the total costs of the programmes.

As advised by the Department of Social Development (DSD) and informed by internal preliminary costing models, the costing exercise was conducted for three levels of care, namely Basic Care, Intermediary Care and Tertiary Care. The rationale for this approach was to equip government with options in terms of affordability, whilst ensuring that minimal quality care was available to older persons at all times.

The total population figures for older persons as per the 1996 and 2001 Census formed the basis for the development of the costing process. However, the vulnerable older persons (VOPs) were determined from Social Security statistics. The latter was used as VOPs are deemed to be those older persons who are eligible for Social Security grants through the appropriate means test, and thus deemed to qualify for additional state services.

The final costing was built on predetermined coverage norms for the different programmes as set out in the Policy for Older Persons. These were (1) Residential Care at 2% of VOPs; (2) Integrated Community Care and Outreach at 20%; (3) Home-based Care at 3%; (4) Poverty Relief and Economic Development at 500 per province; and (5) Capital (infrastructure) costs and (6) National and Provincial Administrative Costs. The latter was established without reference to a norm, but was based on the projected costs for new personnel to execute the new provisions in the bill, and to monitor compliance by service providers to the Bill.

On the realization that the projected costs to fully implement the Bill in the first year alone was exorbitant, attempts were made to gradually increase coverage each year without compromising on the quality of services. This was done by adjusting the demand variable, without tampering with the cost variable (unit cost remained fixed).

Historically, services to older persons were grossly under-provided, both in terms of actual service delivery and the allocation of funds. In order to close the gaps in caring for, protecting and facilitating development of VOPs, government must invest heavily to fulfil its legislative and social commitments to VOPs, and to reduce the burden on the state, by providing an enabling environment for such protection and development of older persons.

1. INTRODUCTION

The Older Persons Bill (OPB) was drafted in 2002 and is a direct result of the Ministerial investigation into abuse and neglect of Older Persons that was conducted in 2000. The incidence of abuse and neglect of older persons both in the community and within residential facilities had grown to alarming proportions.

In the same year, South Africa became signatory to and adopted the Plan of Action of the 2^nd World Assembly on Ageing held in Madrid in 2002. The new legislation provides the framework for the implementation of the plan through an enabling environment.

The Madrid Plan of Action on Ageing focuses on three priorities, namely (1) development in its broadest sense; (2) health and wellbeing; and (3) creating an enabling and supportive environment. For the purpose of the legislation and to address country specific issues, two new elements were added within the South African context, namely protection of and residential facilities for Older Persons, necessitating appropriate change in policy and legislation.

The Aged Persons Act No. 81 of 1967 was not conducive to delivering on the Madrid Plan of Action on Ageing; nor did it provide a framework within which the rights of Older Persons in South Africa were upheld.

In addition, the Act was redundant in that it no longer addressed the changing service delivery needs of older persons. Factors that necessitated the review of legislation were amongst others:

- A significant percentage of the social welfare service budget has traditionally been spent on residential care for a minority of the aging population, effectively to the detriment of community-based services for the majority of Older Persons and their families.

- Historically, few or no services were provided to Older Persons in disadvantaged and other communities.

-. An investigation into the treatment of Older Persons by a Ministerial Committee in 2000 revealed that abuse and neglect were widespread and that there was no coherent strategy to address this.

- The proportion of persons aged 60 years and above is increasing at unprecedented rates given the impact of a declining birth rate, increasing mortality rate of younger persons infected by HIV/AIDS, leading to an ageing population.

- Furthermore the role of older persons has changed significantly from being cared for to providing care, which requires policy alignment and review.

The Draft Policy and Draft Bill underwent a rigorous process of national consultation with a variety of stakeholders, before being tabled in Parliament in August 2003.

The main objects of the OPB are to

- 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 Persons; and

- Combat the abuse of Older Persons.

The intention of the OPB is that Older Persons should be enabled to enjoy active, healthy and independent lives as part of their families and communities for as long as possible. Government recognizes the importance of strong partnerships with other service providers in civil society and in the private sector, to provide services within a generally caring and enabling society.

Prior to being promulgated, the feasibility of the Bill in terms of implementation had to be determined in order to ensure that the goals contained therein are attainable within the countries fiscal constraints.

It is therefore critical to balance the key priorities in service delivery to older persons in terms of developmental needs and programmes with the available resources within the country.

2. DEFINITION OF KEY CONCEPTS

For the purpose of this costing exercise, the following definitions were used:

Older Person is a female person aged 60 or over and a male person who is 65 years old and above.

Frail older person is a person over the age of 60 whose physical and/or mental condition (excluding psychiatric condition) renders him/her in need of twenty-four hour care.

Vulnerable Older Person is a person over the age of sixty who is in receipt of a Social Security grant by qualifying through a means test and is eligible for other State social services. These are older persons in the community that are at risk of not having their needs met due to inadequate or inaccessible resources, and as a result are susceptible to deprivation or relative deprivation.

Residential Care means the provisioning of continuous domestic and nursing care to frail (older) persons on a temporary or permanent basis in a residential home.

Integrated Community Care and Outreach Programme is a comprehensive range of programmes delivered within a community, usually by an NGO, CBO or FBO, and includes

- Community-based care, which is domestic and personal care that a consumer can access nearest to home, which responds to need, encourages local involvement and supports family and community values and responsibilities.

- Day care for adults is a service within a residential home or service centre, which provides social, recreational and health related activities in a protective setting to individuals who cannot be left alone during the day because of health care or social needs.

- Service centre is a multi-purpose centre or a community centre for older persons. A residential home for older persons may serve as a service centre and an outreach home based care service to the housebound.

- Counselling and support services are a psychosocial service rendered to older persons and their families.

Home-Based care is the provision of health and personal care services rendered by formal and informal caregivers in the home in order to promote restore and maintain a person’s maximum level of comfort, function and health including care towards a dignified death (World Health Organisation).

Poverty Relief and Economic Development Programmes are programmes that allow older persons to participate in social and economic activities to ensure that older persons have the choice to remain socially and economically active citizens.

Capital Programme is a programme for government and community infrastructure development in service delivery to older persons.

Administration Programme is the internal programme for government at national and provincial level, responsible for, amongst others, coordination, policy and legislative development, monitoring and evaluation, funding and the maintaining of relevant registers

3. PROJECT DESIGN

The project design was outlined in the terms of reference that defined the objectives, scope, approach and methodology for the costing exercise. It is important to note that the process had numerous challenges that had an impact on achieving the objectives of the exercise.

3.1 Objectives

As per the tender terms of reference, the objectives of the tender were prescribed as

To understand the contents of the Older Persons Bill (OPB) with reference to an Implementation Plan; and

Based on the foregoing, the Service Provider was required to analyse each component of the Bill in order to cost it.

3.2 Scope

The scope of the Project was to

Study the Bill in detail to assess the fiscal and budgetary implications;

Determine the cost implications of the Bill at national, provincial and local levels across the various sectors;

Attend all future deliberations on the Older Persons Bill and Task Team meetings at the DSD;

Facilitate consultative processes jointly with national departments and National Treasury in relation to the costing of the Bill;

Determine the cost implications of priorities as determined by the DSD for the two-year MTEF cycle period (the costing should cover two separate MTEF cycles);

The DSD will appoint a reference group to work with the Tenderer;

Report to the Task Team on progress and challenges; and

Analyse the various components of the Bill and, thereafter, cost these (respective) components.

3.3 Approach and Methodology

The approach adopted was included

A comprehensive analysis of the Older Persons Bill and Proposed Amendments;

A comparative analysis (Cost Drivers) between the Older Persons Bill, its proposed Amendments and the Aged Persons Act; and

A cost driver analysis to effect implementation and maintenance of the Older Persons Bill.

The following methodology was used in effecting the above approach.

A matrix was developed determining compulsory and discretionary obligations in order to inform relevant cost driver variables, as well as administered processes to be implemented;

The Costing Model involved the exploration and comparison between current and proposed models across all levels; and

The Social Services Delivery Model was used as a framework for the costing of programmes.

3.4 Process

The following process was executed in rolling out the Project.

Initial consultations with the client resulted in scope verification and finalisation;

A desktop audit and analysis was undertaken of key documents to understand the context and content of the Bill (see Bibliography);

A comparative analysis of the Aged Persons Act and the Bill and its proposed Amendments was conducted;

A thorough legal and social assessment and costing was done of one section of the Bill (Section 5) and its various provisions to test the viability of the project approach and costing model;

A National Reference Team, comprising officials from the national and provincial departments was established to validate the approach and initial costing;

A presentation was then made to the Parliamentary Select Committee on Social Development at their behest to monitor progress and guide the process;

Two further workshops were convened with all provinces to

gather relevant information as per province, and to ensure the consultants’ understanding of the Frail Care Model; and

develop a set of core Programmes through which the Bill would be implemented and costed.

A meeting was convened with Social Development, Treasury and the Service Provider to agree on the programme costing route rather than costing of the specific provisions of the Bill.

Numerous consultations between service providers and the department were finally held to further refine the document.

3.5 Challenges

The following challenges were experienced in executing the Project.

Short timelines, further compounded by the holiday period which resulted in key role-players not being available; extensions were however granted to service providers to finalise the task;

Actual drafting (wording) of the Bill, for example inconsistency in terminology and missing definitions;

Lack of adequate, reliable and valid information generally regarding Older Persons;

Inconsistent base data from varying sources;

Incomplete data from provinces; and

Non-standardisation of services resulting in disparity in current costing.

4. ASSESSMENT

4.1 LEGAL ASSESSMENT

4.1.1 Purpose

In order to ensure effective costing, it was necessary to begin with a legal assessment of the Bill, the purpose of which was to:

Assist in the identification and determination of the relevant cost drivers that will or may have a financial impact on the implementation of the relevant provisions of the Bill;

Identify the rights and obligations (both compulsory and discretionary obligations) of the various parties recorded in the Bill, including but not limited to the national and provincial DSD, the relevant officials in such Departments, the operators of facilities, the social workers, the professional health care providers, safety and security personnel and older persons; and

Identify the risks of litigation related to the implementation or enforcement of certain of the provisions of the Bill and the control thereof; and issues related to litigation and possible litigation costs.

4.1.2 Approach and Methodology

The approach and methodology utilised was to:

Unpack the provisions of the Bill, word-for-word and section-for-section;

Assess the meaning and impact of the wording used in the various provisions of the Bill for purposes of identifying the relevant rights and obligations (compulsory versus discretionary) that are conferred or assigned to the respective parties, for purposes of identifying and determining who would bear the costs associated with the implementation and/or enforcement of such provisions. In this regard, a determination needs to be made as to whether national or provincial government will be responsible for the relevant costs or will a different department of State be responsible or the operator of the facility and so forth;

Compare the provisions of the Bill to that of the Aged Persons Act, in order to identify old and new cost drivers. In this regard, the costing of the Bill can be partly facilitated by making use of the historical costs and expenses incurred in the implementation and enforcement of similar provisions under the Aged Persons Act;

Identifying the provisions of the Bill that would, in all probability, lead to litigation. Such litigation may relate to civil claims, constitutional issues and criminal complaints and prosecutions; and

Gain an understanding of and insight into the objectives and goals that the legislature proposes to attain for Older Persons through the provisions of the Bill, and whether this will be achievable both on a practical and financial level.

The following table (Table 1) indicates the basis on which the legal assessment was conducted.

Table 1: Legal Assessment

Compulsory vs. Discretionary Obligations

Administrative Obligations

Legal Implications re Litigation

Compulsory: Where any party who needs to act by law has no choice but to do so à shall / must

Implementation of the Act

Regulations

Systems + Procedures

Infrastructure

Equipment

Personnel

Programmes

Litigation may arise from

- Interpretation of wording + provisions

- Constitutional issues (discrimination, etc.)

- Grievance à administrative law (natural laws of justice)

Discretionary: Where any party who needs to act has an option to act or not to act à may

4.1.3 Findings and Analysis, and Implications for Litigation

Whilst the Bill incorporates most of the provisions of the (previous) Aged Persons Act, the Bill attempts to change the paradigm of service delivery to older persons from an institutional model to a community-based model. It seeks to do this by prescribing specific types of services and programmes.

The Bill also recognises the important role of the non-profit organisations (NPOs) as partners to government in service delivery as it makes provision for the establishment and funding of NPOs.

The Bill is also more encompassing in that it recognises and attributes the roles of the various departments, not just the DSD, in the care, protection and development of older persons. Critical in this is the fact that the Bill ascribes and increases government’s responsibility in the monitoring and evaluation (M+E) of services to older persons.

This new approach breaks from the past in that it is a rights-based approach, thus making it incumbent on the State to provide accessible, quality services to all older persons.

The following provisions were identified as critical new areas in the Bill:

General provision throughout the Bill: An increased role in monitoring by the state, as opposed to inspection;

Chapter 3, 12: Protection of Older Persons (rights-based approach to service delivery);

Chapter 3, 17: Keeping of register of abuse of Older Persons; and

Chapter 2: Care of Older Persons in residential facilities.

(See Annexure A: Legal Assessment for full detail.)

The implications of these new areas are that

There will be a need for the appointment of additional social service professionals at both national and provincial levels to execute the new functions, namely the establishing and maintenance of the register for older persons and monitoring and evaluation;

There is an opportunity to expand community-based services to older persons, thus fulfilling the commitment to the Madrid Plan of Action for caring for older persons within the community, and not in institutions; and

The status of older persons is elevated through the recognition that older persons remain an invaluable stratum of society.

4.2 FISCAL ASSESSMENT

4.2.1 Fiscal Assessment and Costing Limitations

Despite the aspirations of a Developmental Service Delivery Model, the absence of clearly defined norms and standards makes it difficult to cost the Bill within the developmental paradigm. As such, the costing exercise of the Bill was confined to current costing formulae and based on the costing models received from the DSD. In addition, costing of any legislation cannot be approached in a vacuum; services and programmes currently running therefore form the basis for such costing.

However, in order to offset these consequential shortcomings, efforts were made with the national Reference Group to identify and agree on core programmes and targets to be delivered within the prescripts of the Bill.

The department also provided the following

Established Developmental Service Delivery Model;

Pre-determined costing model;

Target group to be used as a basis for costing;

Policy framework on Older Persons

Some of the information was inadequate to realise the potential value of the outputs of the costing exercise.

4.2.2 Scope and Extent of Current Service Provision

Older persons receive a host of services that are usually provided by government directly or by the non-governmental sector through funding received from government, albeit inadequate. Available services range from residential facilities, service centres, assisted living programmes and luncheon clubs. The distribution of residential facilities is disproportionate, in favour of the wealthier and urban provinces of Gauteng and the Western Cape; there is a distinct lack of facilities in the poorer and rural provinces such as Limpopo and the Northern Cape.

Whilst there has been a gradual increase in the number of community-based services such as service centres and luncheon clubs, this growth is found more in the urban areas and there is a dearth of service providers to augment state interventions in rural areas.

4.2.3 Current Cost of Services

The current cost of social services to older persons in the country is reflected in table two below. Except for the poverty relief programme, these costs relate mainly to subsidies and financial support provided to the non-governmental sector. Due to the integrated nature of services rendered by social service professionals in the employ of the department, it was not possible to quantify in cost, the proportion of time devoted to older persons.

Furthermore, the costing of state run institutions reflects an extremely high unit cost as compared to that of the non-governmental organisations. For example the average unit cost of old age homes in the Free State is R13 000.00 per month, whereas the highest unit cost in terms of subsidy for Old Age Homes is in KwaZulu–Natal at R1, 700 per month (Table 2a).

Table 2: Current Expenditure and Coverage per Province for Old Age Homes, Service Centres and NGOs

Province	Old Age Homes				Service Centres			NPOs*	Poverty Relief programme
Province	No. Old Age Homes	Subsidy	No. Residents	Subsidy / Person	No. Service Centres	Subsidy / Person / Month	Total Subsidy	Subsidy	Provincial Projects R’000
Eastern Cape	54	R 45,772,000	3,643	R 1,047	54	75.18	5,530,000	1,064,282	5,000
Free State	38	R 12,906,000	717	R 1,500	78		8,259,000	160,187	2,500
Gauteng	99	R 62,358,809	9,403	R 1,157	120	78.00	5,288,879	4,933,378	750
KwaZulu Natal	54	R 48,468,240	2,362	R 1,710	73	80.00	2,472,000	2,436,198	5,000
Limpopo	8	R 9,060,592	893	R 2,470	50	78.25	3,408,101	181,215	5,000
Mpumalanga	19	R 9,387,479	1,228	R 1,215	50	165.00	3,947,107	1,010,800	2,500
North West	26	R 23,852,400	1,529	R 1,300	42	70.43	2,738,318	87,429	2,500
Northern Cape	27	R 5,836,800	1,216	R 400	19	120.00	1,455,708	1,333,712	750
Western cape	136	R 81,500,000	10,854	R 1,215	168	93.90	11,532,000	1,099,000	1,000
National								1,700,000
Total	461	299,142,320	31,845		654		446,311,113	R 12,306,201	R 25,000

TOTAL Expenditure: R382 779 634

* The second last column of Table 2 represents social work services rendered by NGOs

Free State, Limpopo and Gauteng have state residential programmes (100% funded)
Limpopo		6,097,000
Gauteng		15,739,980
Free State (2)		27,097,200
TOTAL
	Mpumalanga only has assisted living programmes
	Subsidy Per Person / Month		Subsidy	No. of People
	155.00		127,677	53

Table 2 (a) Government Residential Facilities

Table 2(b) Government Assisted Living facilities

Table 2 above also indicates that the largest allocation remains biased towards residential care, followed by community-based services in the form of service centres (including luncheon clubs) and community-based services run by NGOs.

There is no standardisation in subsidy for service delivery between provinces due to numerous reasons. Services provided do not reach a significant percentage of the total older persons’ population, thus leaving them unprotected and vulnerable to a range of social and economic problems. Government, as a signatory to the Madrid 2^nd World Assembly Plan of Action, is obliged to redress the plight of older persons through accessible, equitable and quality service delivery across the country. The Bill is premised on ensuring that the country begins closing the gaps in service delivery and promoting the active participation of older persons in society.

4.2.4 Approach and Methodology

The legal assessment of the Bill formed the basis on which the fiscal assessment and costing Implications were derived. At the same time, the Legal Assessment culminated in a number of disparate provisions, diminishing the potential of a sound framework within which to execute the costing exercise.

In order to overcome this constraint, a workshop was conducted with the National Reference Group to identify the Core Programmes prescribed by the Bill.

These Programmes are

Promotion and Protection of the Rights of Older Persons
Community-Based Programmes

i. Day Care Services

ii. Service Centres (Luncheon Clubs, Service Clubs)

iii. Assisted-Living

iv. Home-Based Programme

Support Services (Counseling, NPO Programmes)
Intergenerational Programme
Economic Empowerment and Development

Residential Care
National and Provincial Departmental Administration

In order to accommodate all these programmes and to align the costing to the Developmental Social Services Delivery Model recently approved by the DSD, it was recommended that all services that are community-based be clustered into an integrated Community Care and Outreach Model, comprising

- Day Care Services

- Service Centres (Luncheon Clubs, Service Clubs)

- Support Services (Counseling, NGO Programmes)

- Intergenerational Programme

As a result, the programmes to be rendered in accordance with the Bill can be categorised as follows:

Residential Care Programme
Integrated Community Care and Outreach Programme
Home-based Care Programme
Poverty Relief and Economic Development Programme
Capital Programme
Administration Programme for National and Provincial

This approach facilitates the consolidation of all community-based services, geared towards advancing greater impact on a larger number of older persons. This is aligned to one of the key aspirations of the Bill. Thus, the costing exercise was undertaken accordingly, based on these key programmes.

4.2.5 Costing Model

The Model used to cost the various aspects of the Bill was based on a range of variables, namely:

Demand Variables – indicating the volume of a particular service that is required, for example the number of vulnerable Older Persons to be serviced as per the Core Programmes identified;

Process and Input Variables – that give information on the different types of inputs (cost drivers) required to deliver the services, for example the number of health care professionals / social workers needed to manage a day-care facility; and

Cost Variables – namely the costs of the different inputs required to provide the service.

Thus, these relevant variables were appropriately adjusted to accommodate

Projected population growth; and

Service Delivery Norms.

The costing exercise was conducted for three years, namely 2006/07, 2007/08 and 2008/09.

Levels of Care

In addition to the above variables, and to provide the department with options in terms of affordability of services, whilst ensuring that minimal quality care and development of older persons receive priority, the costing was based on the following three levels of care.

Basic Care;

Intermediate Care; and

Tertiary Care.

The broad categories of services as defined by the Bill have for the purpose of costing been categorised according to these levels.

These levels of care can be defined as follows:

Basic Care is the minimum level at which services can be provided to ensure that older persons are cared for, protected and developed. The basket of services included in this level is provision of the most basic needs for survival, such as primary health care. Programme costs for the management of the service would also be included. Access to these services will mean that government is fulfilling its responsibility according to the Bill in providing services to older persons, and, therefore, also protecting and promoting their rights. The costing of this level is as per the programme-costing model of the department (Annexure B).

Intermediate Care is based on the basic care level, but has additional services that are mostly ancillary health care services (e.g. podiatry, occupational therapy, and physiotherapy), recreational activities (excursions) and other services that are provided at more regular intervals, and would require additional financial resources.

Tertiary Care is more advanced and luxurious care such as that which is provided in retirement or private homes and for which beneficiaries can sometimes afford to pay for.

The rationale for costing the older persons Bill according to these levels of care is to

Ensure that government understands its legal obligations;

Fulfils its responsibility in making basic services available to the vulnerable group; and

Assist decision-makers to make choices on service delivery based on need and affordability.

Each programme as identified above was then costed according to a costing model [as prescribed by the DSD and attached in Annexure B) that then formed the basis of determining a unit cost per programme. These unit costs were then multiplied by the demand for services (number of people needing the service) to determine the total cost for that particular programme.

4.2.7 Norm for Costing

The demand for service was based on the 2001 Population Census. However, in order to define the vulnerable older persons (VOPs), Social Security statistics was used. The rationale for separating VOPs from older persons for the costing exercise was to fulfil Government’s obligation in terms of the extent of service coverage to older persons as per its mandate to care for, protect and facilitate development of the most vulnerable persons in society. VOPs are eligible through means test for services provided by the State. This would also facilitate the measurement of government’s service delivery to older persons.

Costing has in most cases been informed by the norms and standards for coverage of services to older persons as outlined in the Policy for Older Persons.

Residential Care targets 2% of total VOPs.

At any given moment, there will always be those older persons’ who will require residential care. A two percent target has been set for older persons to be accommodated in residential facilities.

Integrated Community Care and Outreach Programme targets 20%

While the Bill seeks to cover the total older persons population through community-based services, the costing exercise considers only 20% of VOPs due to affordability.

The targeting of 20% of VOPs for community-based services is to ensure to that the bulk of older persons remain independent and at the highest possible level of functioning within a community.

Home-based Care targets 3% of VOPs.

This programme is seen as a more viable alternative to institutional care, for those older persons who require frail care services whilst remaining in the community. This programme allows such older persons to continue to enjoy family and community life.

The targeted coverage for this programme is higher than that for residential care (2%), and is also less costly than the latter, presuming that this will gradually become a programme of choice for the care of frail older persons.

Economic Empowerment and Developments

This targets 500 VOPs per province in the first year (2005/06), with varying targets across provinces for subsequent years to close the disparities between the rural and urban provinces.

The introduction of this programme is to meet the provisions of the Bill, to increase the longevity of older persons in terms of productivity and social functioning. The targeted numbers are not as high as the other programmes as the outcome and impact of this programme is still unknown. Lessons learnt in the first year of implementation must inform the targeted coverage for subsequent years.

5 Costing of the Bill

The following tables provide information on which the calculations were based:

Table 3: Distribution of Total Older Persons (60+) by Province

Distribution of Total Older Persons (60+) by Province

Province	1996 Actual	2001 Actual	% Growth	2005 guestimate	2006 guestimate	2007 guestimate	2008 guestimate	2009 guestimate

Eastern Cape	531,276	591,095	11.26	644,338	658,848	673,685	688,856	704,368
Free State	178,432	197,785	10.85	214,947	219,609	224,373	229,240	234,213
Gauteng	456,847	544,524	19.19	628,127	652,237	677,272	703,268	730,262
KwaZulu Natal	555,044	652,457	17.55	744,065	770,182	797,216	825,199	854,165
Limpopo	351,384	408,365	16.22	461,342	476,304	491,752	507,701	524,167
Mpumalanga	163,494	195,996	19.88	227,167	236,199	245,590	255,354	265,507
North West	224,010	269,500	20.31	313,282	326,006	339,246	353,025	367,362
Northern Cape	62,771	67,800	8.01	72,146	73,302	74,476	75,669	76,882
Western Cape	301,942	352,984	16.90	400,720	414,268	428,274	442,754	457,723

South Africa	2,825,200	3,280,506	16.12	3,706,133	3,826,955	3,951,885	4,081,066	4,214,648

This table indicates the total number of older persons in the country and their projected annual growth until 2007.
Population of aged and distribution of people amongst provinces has been based upon actual census numbers for 1996 and 2001. The growth rate between these two censuses was used to extrapolate the population in 2005, and each year thereafter until 2009.

The second process was the extrapolation of this data in accordance with the norm on vulnerable persons derived from social security.

Table 4: Distribution of Total Vulnerable Older Persons (60+) by Province

Distribution of Total Vulnerable Older Persons (60+) by Province

	1996 Actual	2001 Actual	2005 guestimate	2006 guestimate	2007 guestimate	2008 guestimate	2009 guestimate
Province
Eastern Cape	462,157	514,194	560,510	573,132	586,039	599,235	612,730
Free State	155,218	172,053	186,982	191,038	195,182	199,416	203,742
Gauteng	397,411	473,681	546,408	567,381	589,159	611,773	635,255
KwaZulu Natal	482,833	567,572	647,262	669,981	693,498	717,841	743,038
Limpopo	305,669	355,237	401,321	414,337	427,775	441,649	455,972
Mpumalanga	142,223	170,497	197,612	205,469	213,638	222,133	230,964
North West	194,866	234,438	272,524	283,593	295,110	307,096	319,569
Northern Cape	54,604	58,979	62,759	63,765	64,787	65,825	66,880
Western Cape	262,659	307,061	348,587	360,372	372,556	385,152	398,173

South Africa	2,457,641	2,853,712	3,223,965	3,329,068	3,437,744	3,550,119	3,666,323

Table 4 indicates the growth in the number of vulnerable older persons in the country. VOPs are determined by their eligibility to Social Security benefits. However, according to Social Security statistics, only 86.9% (2,863,221) of the eligible number of older persons were receiving Social Security grants at the end of 2004.Thus, an annual growth rate of 8,699% (1% of 86.9%) was used for calculations.

The basis of the data in this table is the Social Security statistics in that all persons in receipt of Social Security grants are deemed to be vulnerable and, therefore, will – at some point or other – require a relevant service. This table provides an indication of the demand for services that government must be able to provide to VOPs. The implication for the costing of the Bill are as follows:

Table 5: Composite Table for 75% of Total Costs for All Programmes for the Different Levels of Care based on estimated VOPs (3,329,068) for 2006/07
Programmes	Target No.	Basic Care		Intermediary		Tertiary Care
Programmes	Target No.	Unit Cost	Total Cost	Unit Cost	Total Cost	Unit Cost	Total Cost
Residential Care	66,581	R 1,788.25	R 1,500,199,762.95	R 2,474.00	R 2,075,489,564.40	R 2,528.00	R 2,120,791,276.80
Integrated Community Care + Outreach	665,814	R 264.67	R 2,220,384,491.39	R 304.67	R 2,555,954,747.39	R 318.00	R 2,667,783,535.20
Home-based Care	99,872	R 391.67	R 492,872,514.62	R 617.50	R 777,054,096.00	R 617.50	R 777,054,096.00
Poverty Relief + Economic Empowerment (100%)	11,625	R 1,475.00	R 216,050,625.00		R 216,050,625.00		R 216,050,625.00
Capital (100%)	-	-	R 24,150,000.00	-	R 24,150,000.00	-	R 24,150,000.00
Administrative: National + Provincial (100%)	-	-	R 30,249,225.16	-	R 30,249,225.16	-	R 30,249,225.16
TOTAL COSTS			R 4,483,906,619.12		R 5,678,948,257.95		R 5,836,078,758.16

Have factored in a 5% inflation increase on 2005/06 figures.

Table 6: Composite Table for 100% of Total Costs for All Programmes for the Different Levels of Care based on estimated VOPs (3,329,068) for 2006/07
Programmes	Target No.	Basic Care		Intermediary		Tertiary Care
Programmes	Target No.	Unit Cost	Total Cost	Unit Cost	Total Cost	Unit Cost	Total Cost
Residential Care	66,581	R 2,384.00	R 1,999,986,710.40	R 3,299.00	R 2,767,599,059.40	R 3,377.00	R 2,833,034,866.20
Integrated Community Care + Outreach	665,814	R 352.89	R 2,960,484,691.00	R 406.22	R 3,407,883,734.81	R 424.00	R 3,557,044,713.60
Home-based Care	99,872	R 522.22	R 657,154,963.58	R 823.33	R 1,036,067,933.38	R 823.33	R 1,036,067,933.38
Poverty Relief + Economic Empowerment (100%)	11,625	R 1,475.00	R 216,050,625.00		R 216,050,625.00		R 216,050,625.00
Capital (100%)	-	-	R 24,150,000.00	-	R 24,150,000.00	-	R 24,150,000.00
Administrative: National + Provincial (100%)	-	-	R 30,249,225.16	-	R 30,249,225.16	-	R 30,249,225.16
TOTAL COSTS			R 5,888,076,215.14		R 7,482,000,577.74		R 7,696,597,363.34

Have factored in a 5% inflation increase on 2005/06 figures.

Table 5 and Table 6 give a full picture of the total costs involved in the provision of services (all programmes) to be delivered in the event of the Bill being promulgated, with Table 5 indicating 75% of total costs and Table 6 indicating 100% of total costs. In addition, the tables set out costs for all three levels (Basic, Intermediary and Tertiary) of care, the projected levels of coverage as per the norms prescribed in the Policy for Older Persons, and the respective unit costs derived from the costing model as provided by the DSD.

The assumption that the DSD costing model was based on 75% of total costs and not on the total cost of implementing the programme was informed by historical funding models on how funds to the non-profit sector were disbursed. Previous (and current) models of subsidisation to NPOs was based on an allocation of 75% of total cost, on the assumption that NPOs were partners in service delivery, and would thus fundraise the remaining 25% of total costs.

This assumption is more realistic in urban communities, where NPOs are found in larger numbers and more resources are available at community level; however, this is not the case in rural communities, hence the inclusion of 100% costing as per Table 6. In rural communities, the DSD may be called upon to cover total costs for the provision of services. This is in line with the Policy on Financial Awards that aims not only to create incentives for services to rural areas but also to ensure appropriate migration of services to these areas.

Table 7: Overall Budget Estimates, MTEF 2006 -2009 (2005 prices)

Overall Budget Estimates, MTEF 2006/07 – 2009/10 (2005 prices with 5% inflation / annum)

	2006/07
		75%		100%
Programmes	Target No.	Unit Cost	Total	Unit Cost	Total
Residential Care	40,000	R 1,788.25	R 858,360,000.00	R 2,384.33	R 1,144,478,400.00
Integrated Community Care + Outreach	665,814	R 264.67	R 2,114,651,896.56	R 352.89	R 2,819,509,229.52
Home-based Care	29,962	R 391.67	R 140,822,598.48	R 522.23	R 187,764,663.12
Poverty Relief + Economic Empowerment	4,500	R 1,475.00	R 79,650,000.00	R 1,966.67	R 106,200,180.00
Capital			R 21,300,000.00		R 21,300,000.00
Administrative: National + Provincial			R 35,223,580.76		R 35,223,580.76
TOTAL COSTS			R 3,250,008,075.80		R 4,314,476,053.40


	2007/08
		75%		100%
Programmes	Target No.	Unit Cost	Total	Unit Cost	Total
Residential Care	40,720	R 1,788.25	R 873,810,480.00	R 2,384.33	R 1,165,079,011.20
Integrated Community Care + Outreach	699,105	R 264.67	R 2,220,384,491.39	R 352.89	R 2,960,484,691.00
Home-based Care	39,949	R 391.67	R 187,763,464.64	R 522.23	R 250,352,884.16
Poverty Relief + Economic Empowerment	4,725	R 1,475.00	R 83,632,500.00	R 1,966.67	R 111,510,189.00
Capital			R 21,300,000.00		R 21,300,000.00
Administrative: National + Provincial			R 37,336,995.61		R 37,336,995.61
TOTAL COSTS			R 3,424,227,931.63		R 4,546,063,770.96


	2008/09
		75%		100%
Programmes	Target No.	Unit Cost	Total	Unit Cost	Total
Residential Care	41,453	R 1,788.25	R 889,539,068.64	R 2,384.33	R 1,186,050,433.40
Integrated Community Care + Outreach	734,060	R 264.67	R 2,331,403,715.96	R 352.89	R 3,108,508,925.55
Home-based Care	29,962	R 391.67	R 140,822,598.48	R 522.23	R 187,764,663.12
Poverty Relief + Economic Empowerment	4,961	R 1,475.00	R 87,814,125.00	R 1,966.67	R 117,085,698.45
Capital			R 21,300,000.00		R 21,300,000.00
Administrative: National + Provincial			R 39,577,215.34		R 39,577,215.34
TOTAL COSTS			R 3,510,456,723.42		R 4,660,286,935.86

Table 7 shows the estimated expenditure that the DSD requires to implement the Older Persons Bill with all its provisional implications.

Notes to the Table:

The figures are based on coverage targets as set by the DSD;

The DSD costing model informs these estimates;

Costing according to norms supplied by DSD;

VOPs only are targeted;

Capital costs are included to indicate the need for development of new infrastructure; and

Administrative costs include the need for new personnel both at national and provincial level.

6 Findings and Analysis

6.1 Considerations for Implementation

6.1.1 Financing of Services

Table 2 indicated that there is a framework that currently exists for services delivery to older persons, therefore the costing was not undertaken in a vacuum. The current allocation for services to older persons for 2005/06 is R462m, and for 2006/07 is R514m. The projected estimates required implementing the Bill as set out in Table 7 far exceeds the allocation, which may jeopardise the promulgation of the Bill. However, due consideration must be given to the fact that it is the first time that the DSD has developed its own costing models and have now a basis from which to plan for services as a true reflection of the actual costs of services to older persons.

6.1.2 Administrative processes and procedures

New processes to manage and/or operate a facility demand that managers/owners register, be monitored and to submit reports and expands. This expands the administrative function of both the facility and the provincial governments.

The official assessment tools for admission, an admissions policy, an admissions panel and an appeal procedure are new innovations introduced by the bill and increase the administrative function.

The new provisions regarding monitoring by a social worker will increase the number of social service personnel required.

6.1.3 Rights of older persons

The right to "reasonable" access to assistance and the right to access to "basic care" place a burden on the State to make assistance and basic care available. This demands the State to invest in/or subsidise services across the country in order to ensure that older persons have access to services. This may necessitate the development of new infrastructure especially in rural areas. The Department of Provincial and Local Government will have to be alerted to this need and negotiation entered into for the inclusion of this need in the Integrated Development Plans at local level.

6.1.4 Register of Abuse

The establishment of the register of abuse of older persons requires considerable resources in terms of personnel, technology and other administrative costs, both at national and provincial level.

6.1.5. Notification of Abuse and the Reporting Thereof

This section is new and places a huge demand on all professionals whether in the employ of the State or otherwise to notify, investigate, report and take action.

6.2 Key Observations from the Costing Process and Findings:

6.2.1 The demand for services far outweighs the supply of services.

6.2.2 The provision of adequate residential care coverage is critical within our society if we want to protect and care for the most vulnerable.

6.2.3 More rather than less facilities are required in the rural areas as revealed in the poverty gaps before Social Security disbursements – Eastern Cape (25.8%), Limpopo (22.4%), Northern Cape (17.5%), Free State (16.3%), North West (15.4%) and KwaZulu Natal (14.8%). This scenario changes significantly post-Social Security disbursements - Eastern Cape (13.7%), Limpopo (11.8%), Northern Cape (10.6%), Free State (9.8%), North West (8.4%) and KwaZulu Natal (8.2%).

6.2.4 Meeting the aspirations of developmental Social Services and the prescripts of the Madrid Plan of Action demands a new and different scope (and extent) and range of services. These must be aligned to the various stages of life in the life cycle of Older Persons. Appropriate norms, standards and targets must duly follow.

6.2.5 An investment in community-based services is crucial in realising the goals and objectives of developmental Social Services and the prescripts of the Madrid Plan of Action.

Conclusion

The key consideration in the Bill is the care, protection and development of older persons within a community setting. As such, the efficacy to provide services to entrench this rests with the State’s capacity to invest in community-based services.

While Government must continue to invest in non-community-based programmes and services, targeted prioritisation of integrated Community-Based Programmes must drive Government’s financing and implementation plan for years come. This is the only means to redress historical inequities; keep older persons within families and communities as long possible; advance the economic productivity and social development of older persons; and gradually shifting spending from residential care to community-based care, ultimately diminishing total cost to Government for all services to older persons, and extending coverage to larger numbers of older persons in the long-term.

Bibliography

1 Scoping the Fiscal and Budgetary Implications of the Older Persons Bill, Cornerstone Economic Research, June 2003

2 Social Services Programme Costing Model, Department of Social Development, 2004

3 Services Delivery for Developmental Social Welfare Services, Department of Social Development, August 2004

4 Frail Care Guidelines, Department of Social Development, September 2004

5 Trends in Intergovernmental Finances 2000/01 – 2006/07, National Treasury

6 South African Policy for Older Persons, Department of Social Development, April 2003

7 Ageing in South Africa: An Overview of People Aged 60 Years and Older, Statistics South Africa, August 2004

8 Funding into Government Subsidised Children’s Homes in South Africa, Southern African Development Planning, Evaluation and Research, March 2004

9 Annual Report 2002/03: Building a People’s Contract to Strengthen Families and Communities for a Better Life for Children, Department of Social Development

Compulsory vs. Discretionary Obligations	Administrative Obligations	Legal Implications re Litigation
Compulsory: Where any party who needs to act by law has no choice but to do so à shall / must	Implementation of the Act Regulations Systems + Procedures Infrastructure Equipment Personnel Programmes	Litigation may arise from - Interpretation of wording + provisions - Constitutional issues (discrimination, etc.) - Grievance à administrative law (natural laws of justice)
Discretionary: Where any party who needs to act has an option to act or not to act à may