When a person loses mental capacity and does not already have an attorney to help with their affairs, it can be difficult to know how to help them with their finances. Often, in this situation the person will need help with paying bills or putting care provision in place but without an attorney, this can be tricky. Usually, the only option is to apply to the Court of Protection for an order granting authority to assist the person with their affairs.
This order can be in the form of a general deputyship, giving you certain powers to deal with their assets, or the Court may give specific authority to carry out a certain task for the person. Applications to the Court can be complex and may take several months to complete, potentially leaving the person vulnerable in the meantime. Many people feel that an application is not worthwhile if matters can be managed to a certain extent without Court authority, especially if the person’s finances are relatively straightforward or low in value. In some cases, becoming an appointee for benefits via the Department of Work and Pensions may be sufficient. However this may not always be in the person’s best interests and knowing which route to take can be a difficult balancing act.
Help from the Government
The Government is currently conducting a consultation into an additional route to help vulnerable people in this situation, known as the ‘small payments scheme’. This scheme would allow certain people to access a bank account and make payments for the vulnerable person without needing a Court order. The Government has summarised its proposals as follows:
- payments would be permitted for a six-month period from one account
- payments would be allowed up to a value of £2,500
- a single extension to the access period, of a further six months, would be permitted only if the value of £2,500 had not been reached
- the same account or other accounts belonging to the individual could not be accessed again by the same or a different applicant
- the scheme would be run by financial services firms (e.g. banks, building societies and e-money institutions), allowing payments or withdrawals primarily from cash-based accounts
- by someone who could prove their suitability, rather than just family members
- applicants will be asked to consider whether a deputyship is necessary or appropriate for longer-term management of accounts and encouraged to apply to the CoP where necessary
This scheme, if implemented, would provide a quicker and easier route to settling the person’s immediate debts and/or putting measures in place to help make their lives easier. The £2,500 amount and six-month timeframe are restrictive but this would also provide the vulnerable person with some protection from financial abuse. The scheme does carry a certain level of risk for the person. However it appears that these would be mitigated by checks carried out when the individual applied as well as potential oversight during their management of the funds. The scheme is intended to be managed by financial institutions, rather than the Government or Office of the Public Guardian, so it will be interesting to see how this is put into practice and whether this will enable fewer people to make Court applications.
The consultation is due to close on 12 January 2022.
Find out more
If you would like advice on this, please contact our dedicated vulnerable clients team.