2020-08-18
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Update on gratuitous care allowance

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Posted by Mitra Mann on 03 May 2016

Mitra Mann - Probate Disputes Lawyer
Mitra Mann Senior Associate

Payments made to family members for the services they provide to a person who lacks capacity (“P”) are known as gratuitous care allowance. 

The care provided covers not only the traditional functions of a carer but also includes case management services such as acting as advocate for the person who lacks capacity; assessing their ongoing needs; liaising with relevant professionals; managing and overseeing the support workers and transporting etc.   

A gratuitous care allowance would normally be paid out by the deputy or the attorney who manages the finances of the person who lacks capacity.  In some circumstances, a deputy would pay himself or herself an allowance if they provide care and case management services.  The question which then arises is whether a deputy has the authority to make such payments or whether the Court’s permission is required.

The scope of a deputy’s entitlement is contained in section 19(7) of the Mental Capacity Act 2005.  It provides that:

“The Deputy is entitled -

a)     to be reimbursed out of P’s property for his reasonable expenses and discharging his functions, and

b)    if the court so directs when appointing him, to remuneration out of P’s property for discharging them”.

Can a deputy therefore rely on the above legislation to pay himself or herself for care or case management services provided?  This was considered in the case of Re. HML[2015].

Re. HML [2015]

In this case, Helen, who lacked capacity, had received a substantial compensation from the North Bristol NHS Trust for clinical negligence.  Helen’s brother, Adrian, was appointed as her Receiver in 2006 and was subsequently appointed as her deputy in 2010.  At the time Adrian was appointed as Helen’s receiver in 2006, it was agreed with the Judge that Adrian would pay himself a gratuitous care allowance of £23,000 per year for being Helen’s primary carer and case manager.  However, this was not specified in the Deputyship Order made in 2010.

In 2015, the Public Guardian reviewed Adrian’s financial dealings and submitted that the Deputyship Order made did not make provisions for Adrian paying himself an allowance from Helen’s estate.  As a result, the Office of Public Guardian instructed Adrian to apply for a court order confirming whether he can pay himself a gratuitous care allowance.

During the course of the proceedings, the Judge directed Adrian to obtain a report from a professional case manager to evaluate and quantify the services he provided to Helen.  A report was obtained and although the estimated costs were in excess of £35,000, Adrian did not ask the Court for more than £23,000 per annum.

Senior Judge Lush’s decision

The Judge considered the scope of a deputy’s entitlement under section 19(7) of the Mental Capacity Act 2005.  He held that section 19(7) relates solely to the functions performed by the deputy as a deputy, rather than to functions performed by him in any other capacity such as a carer or a case manager.  As a result the Judge concluded that a deputy cannot rely on section 19(7) as authority to pay himself or herself a gratuitous care allowance. 

The Judge went on to say that if deputies were to pay themselves an allowance without asking the Court to consider the reasonableness or the level of remuneration they would be in breach of their fiduciary duty.  Their personal interests would ultimately conflict with their duties.  As a result, the Judge held that a deputy should always apply to the Court of Protection for permission to pay themselves a gratuitous care allowance.  The Judge also specified that a lay or non-professional deputy should also apply to the Court for permission to pay a gratuitous care allowance to family members.

Conclusion

Deputies should be aware that providing care or case management services does not form part of their duty as a deputy.  The case of Re. HML could not make the position any clearer.  Deputies (including professional and lay deputies) require the Court’s permission before paying themselves a gratuitous care allowance.  Lay deputies also require the Court’s permission before paying other family members a care allowance.

There appears to be some uncertainty as to whether a professional deputy would require the Court’s permission before paying a gratuitous care allowance to family members.  If you are a deputy, it is advisable to seek legal advice before paying out a gratuitous care allowance.  The same approach is likely to apply to attorneys and it is therefore advisable for attorneys to seek legal advice too.

About the author

Mitra Mann

Senior Associate

Mitra is a specialist in both, contentious probate and contentious court of protection work.

Mitra Mann

Mitra is a specialist in both, contentious probate and contentious court of protection work.

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