Help to Adapt Pilot A Scottish Government initiative Responses to Frequently Asked Questions as at March 2015

Help to Adapt Pilot
                A Scottish Government initiative

                          Responses to
                    Frequently Asked Questions

                                 as at March 2015

© Link Group Ltd 2015. All rights reserved. No part of this publication may be stored in a retrieval
system or reproduced in any form whatsoever without prior permission in writing from the publisher.

HELP TO ADAPT SCHEME
The Scottish Government is piloting a new scheme to help older homeowners adapt
their houses. It will be the first scheme of its kind in the UK. Uniquely it will help
owners pay for adaptations - by using the equity in their home - and organise all the
work for them.

Homeowners aged 60 and over will be able to apply for a loan of up to £30,000
to pay for adaptations.
The Help to Adapt scheme supports the Scottish Government’s commitment to
helping older people live independently in their own home for as long as possible.

The scheme is designed for those older people who need an adaptation now or in
the near future.

Key benefits

      Older homeowners will receive a personalised service. They will be
       supported by a dedicated Occupational Therapist and will be able to
       choose their adaptations, including all fittings and finishes.

      The scheme will help people plan ahead and make sure their home
       continues to meet their needs.

      All of the work will be organised for the older homeowner - saving
       people the time, anxiety and work involved in organising an adaptation
       to their home.

      The loan from the Scottish Government is affordable because there are
       no monthly interest charges or compound interest. The amount repaid
       will be linked to the value of the home with a cap on the maximum
       amount repayable.

The scheme will be open to people aged 60 or over, who own their own home
outright, or have a substantial amount of equity in it. It will be open to older people on
any income.

The Scottish Government has appointed Link Group to be its Managing Agent and to
deliver the scheme.

THE PILOT
Link Group, working closely with its subsidiary Horizon Housing Association, will pilot
the Help to Adapt scheme over two year period in 12 local authority areas in
Scotland.

It will be launched to applicants at the beginning of April 2015 and finish in 2017.
The scheme may be extended to March 2018 depending on the outcome of the pilot.

The scheme aims to benefit around 600 homeowners, with around £7 million in loans
being made available by the Scottish Government.

Link is the managing agent delivering the pilot on behalf of Scottish Government.
The pilot areas cover urban and rural areas and aim to reach people with a variety of
personal circumstances.

The Scottish Government will be evaluating the pilot, with a view to rolling out the
scheme nationally if it is successful.

RELATIONSHIP TO LOCAL AUTHORITY DUTIES – INCLUDING THE SCHEME
OF ASSISTANCE

The Help to Adapt pilot will not replace the duty of local authorities to assess need
and meet eligible assessed need under existing legislation (most notably the Chronic
Sick and Disabled Persons Act 1970 and the Housing (Scotland) Act 2006).

Local authorities will continue to provide mandatory grant funding of 80% or 100%,
depending on the owner’s circumstances, for adaptations assessed as eligible for
financial assistance through the relevant local authority’s published Scheme of
Assistance.

Most local authorities prioritise grant funding for households with a critical or
substantial need for assistance.

The Help to Adapt pilot is designed to help older people plan ahead and arrange
adaptations that will help them avoid crisis situations. It is strongly linked to the
preventative agenda and will offer older homeowners greater personalisation, choice
and control over the timing and type of adaptation to be carried out in their home.

In some cases Help to Adapt could be used to fund works that aren’t eligible through
the local authority’s Scheme of Assistance and in these cases the scheme will be
complementary.

QUESTIONS AND ANSWERS

WHAT DO YOU MEAN BY AN ADAPTATION?

Examples include ramps, door widening, relocated switches/plugs, stair lifts,
handrails, adapted showers/toilet/bathrooms, adapted kitchens, through-floor lifts,
and door entry phones. This list isn’t exhaustive.

THE LOAN

Is there a maximum loan and minimum loan?
There is a maximum loan of £30,000. There is no minimum loan.

Can an older person take more than one loan under this scheme?
Yes, as long as the total amount loaned isn’t more than £30,000.

How does the loan work?
The loan is secured against the older homeowner’s property. No monthly interest
payments are charged and there’s no compound interest. The loan is repaid when
the homeowner sells the house or dies. Where a couple have taken a loan, it will be
repaid when the last surviving member of the couple dies or sells the house.

The amount repaid is linked to the value of the house. If the loan represented 5% of
the house value when it was taken out, then the repayment amount will be 5% of the
house value at the point of repayment.

The property will be valued by an independent surveyor appointed by the managing
agent. The scheme will include a mechanism for the applicant to query the valuation.

What is “an equity loan”?
Equity means the financial value of your home less any money that you have
borrowed against it, such as a mortgage.

Property value/ price                  £140,000

Mortgage                               £ 14,000

Equity in the property                 £ 126,000

If the owner takes out a Help to Adapt loan of £8,864, this will represent 6.33% of the
value. The Scottish Government will take a security over the property so they have a
6.33% stake in the property.

How much equity must the owner have in their home?
The homeowner must have at least 80% equity in their property. That means if their
house is valued at £100,000, any outstanding mortgage or other secured loans must
not be more than £20,000. Unsecured loans don’t count. Homeowners are advised
to seek independent financial advice and in some cases we may require that they do
this before processing the loan.

What happens if the value of their house increases?

If the value of the house goes up then the amount repaid will be higher than the
amount originally borrowed. However, to protect the homeowner from the impact of
high house price rises, the amount repaid will be capped so that it is no more than if
the loan had been borrowed at an average mortgage rate.

For example
      Value of property on completing the loan                £140,000

      Value of loan                                           £8,864

      Value of property on sale or death                      £161,000

      This property has increased in value by 15%.

      Amount repayable to Scottish Government is £8,864 +15% = £10,194*

      Property value on sale or death                         £161,000

      Repayment to Scottish Government                         £10,194

      Equity released to owners or estate                      £150,806

*figures rounded to nearest £

If the value of the property goes up, what happens with the increased funds
sent back to the Scottish Government - does it get reinvested into the scheme,
or does it go back into Scottish Government generally, possibly for other
unrelated things?

As the value of individual loans may increase or decrease upon redemption it is
expected that increase in value of some loans will be offset by the decrease in
others. Any surplus will be reinvested back into the Help to Adapt Scheme or other
projects related to Scottish Government Older People Strategy.

What happens if the value of an older person’s house falls?
The home owner will pay back less than they borrowed.

The loan agreement will include a standard condition that the property must be
maintained in good and sufficient repair.

For example
      Value of property on completing the loan                £140,000

      Value of loan                                           8,864

      Value of property on sale or death                      £133,000

      This property has decreased in value by 5%

      Amount repayable to Scottish Government is therefore £8,864 less 5% =
      8,421

What happens if the owner wants to move or just sell the property?
The owner will sell their home in the usual way. When the house is sold they will pay
back the loan to the Government, and the calculation will be carried out as described
above.

What happens to the loans if the owner dies?
The loan will need to be repaid to Scottish Government from the owner’s estate.

What happens if a son or daughter remains living in the house, could the
Scottish Government make me sell?
The loan becomes repayable if the property is no longer required by the homeowner
for whom the adaptation was carried out. It would be advisable to include families
in discussion about the implications of the investment. If the property is the
permanent home of a vulnerable relative, the Scottish Government may be willing to
defer the loan repayment. Each case will be considered on an individual basis. or
come to an arrangement regarding terms for repayment.

In what circumstances might the loan not be repaid when someone dies or
sells their property?

This would happen in exceptional circumstances only. These would relate to
something happening after the loan had been taken out that would mean seeking
repayment at the usual point would create a very difficult circumstance – an example
would be where an adult child living with the older person became disabled, needed
the adaptations which had been installed and inherited the house on death of the
parent and intended to remain living there.

What happens if there are other people living in the house, for example a son
or daughter?

Older homeowners are still eligible for the scheme if they have other people living
with them. However, when they die, the loan must be repaid, even if another
occupant inherits the house and continues to live there. There are only very
exceptional circumstances when the loan can be transferred to another occupant.

Can people have more than one loan through the scheme?

Yes, as long as the older home owner still owns at least 80% equity when they take
out any subsequent loans.

Once people have a loan from the scheme can they take another secured loan
from someone else?

Yes. Though of course this will depend on their financial circumstances. The ranking
of Scottish Government’s loan will be set out in their loan agreement and will not
change if they take on subsequent secured loans from other providers. For instance,
if the Scottish Government loan is ranked first, it must be paid back before all other
loans when the property is sold. Where an older person still has a mortgage, the
Scottish Government charge will be ranked second behind this, so that the mortgage

is paid off first, and then the Scottish Government loan. If another secured loan is
taken out after the Scottish Government loan this would be ranked behind the
Scottish Government loan.

Will there be legal costs to set up the loan?
Yes there will be legal costs incurred however these can be added to the loan.

Are there are any other costs involved?
Yes, the Scottish Government charges a 12% project management fee, which can
be paid as part of the loan, or as a lump sum.

What is the Project Management Fee for?
The project management fee is a contribution to the costs of Scottish Government in
enabling the project management of adaptations works. The fee can be added to the
loan.

How does this relate to the advice and information services provided by
disability organisations?
If a prospective client is in discussions with an disability organisation providing
advice on ownership options, the Help to Adapt caseworker would not duplicate or
contradict other options being explored, and would liaise with the organisation. Help
to Adapt is focused on equity release for adaptations for older people, and is the only
low cost government loan available for residents in Scotland. Help to Adapt will be
communicating with partners and older people interest organisations to ensure there
is shared knowledge/information on the pilot.

How is the scheme being funded?

The Scottish Government is using a new source of funding from the UK Government
called financial transactions funding, which can only be used for loans or equity
investment. Funding is in place for the pilot.

Is the scheme Sharia compliant?

Yes. The Scottish Government has designed the scheme specifically to ensure that it
is Sharia compliant. There is no means testing and there is no interest charged on
the loan.

ELIGIBILITY AND TYPES OF WORKS

Who’s eligible to apply?
Homeowners aged 60 years or older, who own their house outright or who have a
substantial amount of equity in their property and who need an adaption now or in
the near future. The adaptations must be fitted in the property the customer lives in
as their home, which must be the same property used as security for the loan.

What if one member of a couple is under 60?
Usually both members of a couple will need to be 60 or over. However, where
someone under 60 lives with a homeowner who is over 60 and needs an adaptation,
the couple would be eligible.
Can disabled people aged under 60 apply?
No, the scheme is specifically targeted at helping older people. It meets a
commitment in the Scottish Government’s strategy for housing for older people, Age,
Home and Community (2011).

How will it be decided if an adaptation is needed now or in the near future?
The Help to Adapt scheme will have its own dedicated Occupational Therapist (OT)
with specialist housing knowledge. The OT will assess the homeowner’s needs,
working with the home owner to help them think ahead, and recommend the
adaptations to be funded by the scheme. In some cases the Occupational Therapist
might recommend that moving house would be a better option than making
alterations to the property.

Will the scheme be means tested?
No, but it is most likely be of interest to those people with little or no debt secured
against their home but whose income and savings are limited.

What do you mean by an adaptation?
Examples include ramps, door widening, relocated switches/plugs, stair lifts,
handrails, adapted showers/toilet/bathrooms, adapted kitchens, through-floor lifts,
and door entry phones. This list isn’t exhaustive, and the nature of the scheme is to
provide a personalised service which enables independence now and in the future.

Can the loan be used to cover internal and external work.
YES, if the OT assessment is that work is required inside and outside the home in
order to enable independence and for the client to stay in their own home e.g.
access routes for those with mobility problems. The OT will work with the client to
determine what is needed, and the caseworker will ensure that works can be carried
out in compliance with the property title conditions.

Could the loan cover the costs of assistive technology?
Yes, where this technology is linked to the structure of the property. Assistive
technology is term to describe a range of devices to help people with everyday living.
This includes devices to help people live safely and independently at home, such as
automatic door and window openers. We will give you advice in order you can make
an informed decision, including running and replacement costs.

What help will the owner get to carry out the adaptations to their property?
Link will help with the whole process. We will help the owner to make the loan
application. Our Occupational Therapist will provide expert assessment of the
owner’s needs and provide recommendations on adaptations works that will help the
owner to remain independent both now and in the foreseeable future. We will
manage the specification, planning and building warrant applications if needed, and
project management of the works.

Must the loan be spent on adaptations?
Yes. It is a conditional loan and can only be spent on adaptations.

Can the loan be used to pay for repairs?
No, it’s designed to help people pay for adaptations. Sometimes, though, it might not
be possible to install an adaptation without carrying out a repair first. In this case the
loan can be used to pay for both the adaptation and the repair.

Can loans be provided for adaptations irrespective of the condition of the
property?
The house must meet repairing standard and tolerable standard for property in
Scotland. These are basic levels of repair that homes must satisfy in order to be fit to
live in.

Can an older person take a loan and arrange their own adaptation?
No, all adaptation work will be organised as part of the scheme. This will make sure
everything is carried out to a high standard. It will also save people the time, anxiety
and work involved in organising and managing tradesmen.

Could the scheme be used to pay for adaptations which aren’t eligible for
grant under the Scheme of Assistance?
Yes, though it will be important to plan work in a co-ordinated way if some elements
of the works are eligible for grant and others are not.

Could this scheme help people pay the 20% contribution needed under the
Scheme of Assistance?
No, the key feature of the Help to Adapt scheme is that the finance and the
adaptation are delivered as a single package. It is not just a source of finance.

How is Help to Adapt different from Care and Repair Services?
Help to Adapt will focus solely on helping older people adapt their home and using
their equity to fund this adaptation. Care and Repair services provide help to people
on a wider range of areas and depending on the agency, this can include
adaptations under the Scheme of Assistance, repairs and handy person services.

Can the owner decide on the quality and type of finishes
Yes – the owner is using their equity and the scheme is about planning, choice and
control. The Help to Adapt team will offer advice on value for money, usability and
feasibility.

LINK GROUP

What experience does Link have in this kind of work? Why would we trust
you?

Link Group is a respected housing association and RSL of 50 years standing. It has
extensive experience in working with home owners to make the most of their home.
It will be working closely with its subsidiary, Horizon Housing, also a registered social
landlord which has celebrated 25 years of successful operation.

The two organisations work with over 4000 older home owners every year, assisting
with adaptations to their home, small repairs and handyperson services. Across the
Group, we manage over 700 adaptations to property every year, with very high
satisfaction levels with the quality of the work and the processes we use to work with
clients.

LOCAL AUTHORITY FUNDING

Does this scheme mean there will be fewer local authority adaptations grants
available under the Scheme of Assistance?

There is no relationship whatsoever between the Scottish Government’s loan funds
for Help to Adapt and the grant funding made available by local authorities under its
published Scheme of Assistance. A local authority Scheme of Assistance is based
on statutory entitlements to adaptations grant under the Housing (Scotland) Act
2006. Local authorities cannot and should not rely on the availability of this scheme
in its decision making about grants.

It is anticipated that Local Authorities will welcome the Help to Adapt pilot scheme: it
offers a way for older people in their communities to be in control of the timing and
nature of adaptations works they might wish to do, to ensure they are able to remain
in their own home with a good quality of life for as long as possible.

What if the Local Authority has said that works are not eligible under the
Scheme of Assistance (SoA), or there is not a critical/substantial need; if the
LA refers the client to refer to the Help to Adapt scheme, will the Help to Adapt
team then act as advocate on behalf of client and try to persuade the LA that it
is critical/substantial need, and should get SoA grant?

NO. If the LA has assessed need, then Help to Adapt will not get involved in that LA
decision and will work with client to explore the Help to Adapt option. If a client has
come straight to Help to Adapt or through a different route, then the Help to Adapt
team may refer to the client to the LA if they think it is possible that the client may be
eligible for an SoA grant and if this is a route the client considers they should
explore.

THE PILOT AREAS

Link will offer the pilot scheme within 12 local authority areas. These areas have
been selected by combining the outcomes of:

        Research and analysis of the Scottish Census 2011 and Scottish Household
         Surveys, combined to provide analysis for the proposed pilot areas.1
        Attitude of/support from the local authority and some local agencies to the
         scheme being piloted in its area.
        Practical considerations for the Help to Adapt service team in delivering the
         scheme over the pilot contract period, where a key element of the scheme is
         the personal and project management assistance to the older home owner
         requiring several home visits [we propose a partnership approach with trusted
         local agents, West Highland Housing Association – shortly to join Link group –
         and Argyll and Bute Care and Repair for the pilot in Argyll and Bute; and with
         Borders Care and Repair for more remote parts of the Borders.]
The 12 areas are

        Argyll and Bute
        Edinburgh City
        East Lothian
        Scottish Borders
        West Lothian
        Falkirk
        Stirling
        East Dunbartonshire
        East Renfrewshire
        Glasgow
        North Lanarkshire
        Renfrewshire

1
    A Evans & M Littlewood (Oct 2014). Help to Adapt Research Report for Link Group.

EXAMPLE

Mrs Williams is 78 years old. Her husband died a few years ago and her income
dropped as his pension did not pass to her. She has gradually used up most of her
savings. She lives in a 3 bedroom ground floor property of a four-in-a block that she
and her husband bought under the right to buy thirty years ago. She has no
mortgage and the property is now worth around £140,000.

Mrs W brought up her three children in this house. Her son and grandchildren live
nearby, and she is still an active member of her local church. She is aware that her
sight has been failing and she has now had a third eye operation but has been
advised that there will be further degeneration. She is mobile but has arthritis in her
hip and is now using a stick to get around. Her son, John, knows she is starting to
struggle a little with the heavy front door, and both are concerned about how she will
manage as her sight deteriorates. Mrs Williams is aware that in a year or so, she
probably won’t be able safely to use the bath as her mobility gets worse. She was
advised to contact her local Council about adaptations but told that as she is
managing now she would not be a priority for help.

John is keen to help his mother to adapt her home so she will able to stay there and
in time for her to become familiar with any changes before her sight deteriorates
further, but none of the family have spare cash. They have seen a financial advisor
who advises him that they may be able to get a loan through the Help to Adapt
scheme, which will also help to properly assess Mrs William’s current condition and
future needs and organise works. She contacts the scheme to make an enquiry,
learns more about the scheme from the helpline advisor and decides to apply.

Her allocated caseworker makes sure Mrs William and her son clearly understand
the scheme and that she is eligible. She then arranges for our OT to carry out a
home visit to discuss the situation, consider options, look at what can be changed in
the property and at what Mrs Williams wants. This results in a decision by Mrs
Williams to have her bathroom fully adapted as a wetroom with a separate toilet, a
new front door installed with an automatic door opener and key fob system, and
some new equipment installed in the kitchen, and new lighting, which will make it
easier to manage with a visual impairment.

The estimated cost at this stage is around £7,200. The caseworker goes through all
the financial information and loan applications conditions, including the project
management fee. He/she checks if Mrs Williams will pay for her own legal advice or
if she would need the legal costs to be added to the loan

Help to Adapt’s Technical Officer the draws up detailed specifications to discuss and
agree with Mrs Williams. He advises her that the works can quickly be arranged and
carried out by the Help to Adapt contractor, but if she would prefer him to seek
quotes from others then Help to Adapt can do that.

The loan is applied for and approved, Mrs William mandates that the loan funds can
be transferred to Link in order to settle the costs. The legal work is completed and
then work is instructed and starts. When the work is completed, the Technical Officer
visits, checks the quality of work and checks Mrs Williams is happy with the result.

Mrs William formally agrees that the contractor can be paid. Full maintenance and
servicing instructions are provided, along with any warranties.

The contractor submits and invoice and is paid.

HELP to ADAPT ILLUSTRATION                                 Mrs Williams

MRS WILLIAMS

Property valued at                                         £140,000

Assume mortgage of                                         £0

APPROX ADAPTATIONS AND OTHER COSTS

Legal fees for your solicitor                              800.00

Adaptations works costs                                    7200.00

Project management fee (12%)                               864.00

Total                                                      8864.00

Help to Adapt equity loan                                  8864.00

Help to Adapt equity stake                                 6.33%

NOTES:

This information has been prepared for local authorities participating in the pilot
scheme. It will form the basis of information provided in different formats for different
audiences and, over time, may change.

CONTACT FOR FURTHER INFORMATION

The pilot scheme will launch on 2nd April 2015.

You can contact the Help to Adapt Team for further information at:

Email:                 info@helptoadaptscotland.co.uk

Telephone:                      0330 303 7801

Website:               www.helptoadaptscotland.co.uk