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ASHE: 2016 provisional results – care costs climbing

The latest ASHE figures (the final figures for 2015 and the provisional figures for 2016) have been published today (26 October). Carolyn Plummer highlights the key data relevant to catastrophic injury claims handling and the impact on the next round of annual periodical payments due in December 2016 as a result of increasing care costs.

The big picture

The summary of the annual increases included in the ONS release is reproduced below for ease of reference.  The average increase for all employees is 2.2% but it can be seen that there is a distinct split between higher paid occupations, increasing by a maximum of 2%, and the lower paid occupations, including care workers which have increased by 3% or more.

Cat Pi Article Oct 16

The links to the tables are as follows:

The data homepage lists all the individual Tables 1 to 28, although they are listed alphabetically by title rather than by number. Selecting a particular table will take you to a page with links to all the figures published for that table from 1997 (or such later date as the table started) to the 2016 provisional figures. The figures for each year are opened as a zip file which gives access to all the sub-tables (for example 14.1a, 14.1b to 14.11a, 14.11b).  Clicking on the required sub-table will open the corresponding excel file.  The tabs along the bottom of the spreadsheet further split the figures between All, Male, Female, Full-time and Part-time.

Alternatively the Statistical Bulletin includes an overview of the changes from the 2015 to 2016 figures.  To access the results tables click on the green button "View all data used in this statistical bulletin" to bring up the same Tables 1 to 28 as accessed from the above link.  

Care costs and periodical payments

After a few years of modest and occasionally negative growth, care costs are increasing, with a 4.03% increase in the median hourly rate in the year to April 2016. In the same period RPI was 1.3% and CPI was 0.3%. These figures pre-date the Brexit decision and its impact on earnings growth is uncertain. However, any restriction on the free movement of workers may result in higher care costs due to a reduced pool of carers with fewer numbers being recruited from the EU. 

The ASHE table relevant to indexing the majority of periodical payment orders (most of which relate to care costs) is Table 26.5a SOC 6145 & 6146 (previously SOC 6115).  The figures are shown below together with the percentage increase over the final 2015 figures.

Capture - Short 1832

With the majority of periodical payments linked to the 80th percentile (and with no change between the 2015 provisional and final figures for that percentile) many annual payments due in December 2016 will increase by 3.66% compared to 1.67% in 2015 which may take insurers by surprise given the low (or negative) increases over the last few years, as seen below, prompting an increase in reserves.

Capture 2011 Figures 1800

DWF PPO administration

DWF Forensic offers an Annual Update service for periodical payment orders to calculate the next payment due and can also review earlier payment calculations if there are queries over the amounts paid. Read more

Contact

For further information please contact Carolyn Plummer, Forensic Accountant on 0161 604 1682 or at Carolyn.Plummer@dwf.law 

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This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

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