Family Care Payments & Gratuitous Allowance

Family Care Payments (Gratuitous Allowance) 

If you are a lay deputy who has been appointed by the Court of Protection to manage the financial affairs of an incapacitated person (“P”), you are expected to comply with a number of standards in the discharge of your functions as a deputy. For example, you would be required to investigate the extent of P’s assets and liabilities, secure P’s property by ensuring that there is appropriate insurance in place and you may have to ascertain whether P has made any succession plans by carrying out a will search. Certainty has a portal with the Official Solicitor where deputies can carry out Certainty will searches, and the portal can be found here.

You may need to consider whether to pay a close relative of P for the care that they provide to P, or if you are providing the care to P yourself, you may need to decide whether you can pay yourself from P’s funds for the care that you provide. This can often arise where you or another family member have been providing care to P by way of natural love and affection or you have given up employment in order to care for P.

What are family care payments?

Family care payments (also known as gratuitous care allowances) are payments made to a close relative or friend of P who provides care and/or case management services to P. The payment allows for the maintenance of the person caring for P.

The case of Re HNL [2015] EWCOP 77 confirms that case management services can include (but are not limited to) acting as an advocate for P, liaising and organising the care with various professional care agencies or medical professionals, assessing P’s needs and ensuring that their quality of life is enhanced.

Re HNL and the Office of the Public Guardian’s practice note on family care payments confirm that the types of care arrangements that might justify such payments include arrangements were there are no contractual relationship between P and the family member for the provision of such case, and in effect, the care is informal without any agreed hours of work or break or holidays, and is being provided by way of natural love and affection.

Who can make the decision?

Re HC [2015] EWCOP 29 and Re HNL confirm that a lay deputy who is either providing the care themselves, or who needs to decide whether or not to make a payment to another family member, would be expected to make an application to the Court of Protection for authorisation of such payments. This is because there would be a conflict between the deputy’s duty not to take advantage of their position or to put themselves in a position where their personal interests might conflict with their duties. Deputies cannot use their position for any personal benefit. As a result of this conflict of interest, a lay deputy would need the authority of the Court of Protection before making any payments.

If payments have been made without obtaining authorisation, an application can be made to the Court of Protection for retrospective authorisation of such payments.

Factors to consider

The feature of the care will be important, and some of the factors that the court has considered in the past in determining whether the family care payments were in P’s best interests are:

whether the care that is being provided to P meets P’s needs, and the quality of that care;

1. the affordability of the payments considering P’s resources, age, and life expectancy;
2. whether the provision of the care presented a saving on the commercial cost of the services.

Additionally, the Office of the Public Guardian’s practice note on family care payments suggests that the following factors should also be taken into consideration:

4. if the care is being provided alongside professional care, whether the additional care is necessary; and
5. payments are to be adjusted if the carer is living rent free in P’s property, and/or is getting another income.

How is the payment calculated?

The OPG confirms that family care payments are not intended to replace a salary from a job that the carer may have given up to care for P, and provides three approaches:

1. if P has sufficient funds, and the family provides most of the care, you would need to determine what allowance is required and determine whether this is reasonable by reference to the above factors. You would then need to make an application to the Court of Protection for authorisation to make such payments.
2. where P has sufficient money, and there is significant professional care but additional care is being provided by the lay deputy or a member of the family, the payment is calculated by reference to the commercial rate of the care/case management services being provided with a reduction of 20% to reflect that these payments are not liable to income tax and that no national insurance contributions are required. In addition, the payments can be index-linked to avoid repeat application to Court in line with the Annual Survey of Hours and Earning (ASHE) for care workers, and home carers. You would then make an application to the Court of Protection for its approval.
3. where P’s funds are limited, then only payments that they can afford can be made further to obtaining the authorisation of the Court of Protection.

How do I apply?

The application can usually be made using the procedure set out in Practice Direction 9D, which provides a shortened procedure for existing deputies or attorneys.  If there is likely to be a conflict or someone is likely to oppose the application, a full application will likely be required by filing the additional annexes together with a capacity assessment.

Conclusion

If you have been providing informal care to a family member for some time, or have given up paid employment to provide care through natural love and affection, it may be advisable for you to consider whether an application should be made at the Court of Protection for you to be remunerated for the care that you provide.

How can Morr & Co help?

If you have any questions regarding the topic discussed above please don’t hesitate to contact a member of our Private Client Department, Court of Protection team.

Disclaimer
Although correct at the time of publication, the contents of this newsletter/blog are intended for general information purposes only and shall not be deemed to be, or constitute, legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Please contact us for the latest legal position.