We all know that the UK has an army of unpaid carers with family and friends providing varying levels of informal care. Sometimes providing care is part of being a relative, particularly in the case of a parent and their child. Many willingly provide family care without cost but others may find themselves financially disadvantaged especially if they have given up or deferred taking paid employment in order to do so. So can a family member (including a Deputy) be paid for the care (sometimes known as ‘gratuitous care), that they provide?
Here are some answers to the frequently asked questions on this issue:
What is family care?
This can take a number of forms but the following probably fall within that description:
- Care which is provided outside of any contractual relationship and because of the natural love and affection for the person being cared for
- Care which is informal and not delivered under the umbrella of a job description
- Care which has no formal hours, breaks or holidays
Does the Deputy have the authority to make payments for family care?
Most orders appointing a deputy for property and affairs give the deputy wide powers however the deputy will need to consider:
- Whether P has capacity to make their own decisions regarding family care payments
- If P lacks capacity to make decisions about family care payments, whether the payment being proposed is in P’s best interests
- Whether the decision to make a payment conflicts with their duty not to take advantage of their position
The Mental Capacity Act 2005 assists deputy’s to work out what is in someone’s best interests, whether someone has the capacity to make or participate in a decision; and whether the deputy should consult with others and in particular those who are involved in caring for P or have an interest in their welfare.
The Office of the Public Guardian also offers guidance by identifying some of the things that the deputy will need to take account of:
- The care must be reasonably required to meet P’s needs and be of a good standard. If in doubt, the deputy may need to seek a care assessment from social services or a specialist brain injury case manager
- If there has been a claim for damages, the deputy should consider the level of care that was recommended by the experts in the course of the litigation claim
- Affordability: the payments must be affordable taking into account P’s resources, age and life expectancy. If the payments cannot be met out of P’s income, the deputy must consider the impact that this will have on P’s capital taking account of P’s future care needs
- Payments must reflect the degree of care being provided. If P is a very young child, the deputy should consider whether the care is over and above that which a parent would normally provide
- Temporary interruptions to the care provision e.g. a stay in hospital, do not mean the payments need to stop, but long term changes such as a permanent move to a care home or a supported living arrangement must be taken into account
- If there is already professional care in place there must be a need to supplement the professional care
- Payments should represent a saving on the cost of professional care
- Payments should take into account any other contributions P makes towards the running of the household or paying bills. Payments may need to be adjusted down if the career is living rent free in P’s property or getting other income
- Payments should be agreed in consultation with the carer and other family members, where possible to avoid situations of conflict
Can the Deputy be paid for providing family care?
The deputy must not take advantage of their position or put themselves in a position where their personal interests conflict with their duties. A deputy who pays themselves for family care may be in breach of this duty.
So how can a lay Deputy or other close family member be paid for family care provision?
The lay deputy will need to seek court approval for payments to themselves. The Public Guardian may also ask the deputy to seek court approval if they are paying someone they are closely connected to – for example, a spouse or a child. This is because the decision to pay may be influenced by the close relationship. Each case will turn on its merits. Sometimes the Court of Protection may ask for a specialist report from a professional brain injury case manager to evaluate and quantify the care that is being provided.
Does a professional deputy need the court’s approval to make family care payments?
Professional deputies can make decisions about family care payments without further reference to the Court of Protection however they are expected to follow the principles and guidance given by the Public Guardian and provide evidence to support their decision. If agreement can’t be reached about the payment or it is challenged by other family members, it is a matter of judgement for the professional Deputy but they can involve the court as a matter of last resort.
What if the Public Guardian isn’t happy with the decision of a Deputy?
Details of the family care payment must be included in the annual report that the deputy files with the Public Guardian. If the Public Guardian feels that the family care payments are not in line with its guidance or not in P’s best interests they can apply to the court for directions or for removal of the deputy
How should the payment be calculated?
There is no exact science to this, even to the extent that two carers may provide the same amount of care but receive different family care payments, this is because the carers individual circumstances must be considered in the round. Family care payments are not intended to replace salaries and shouldn’t be calculated at the level of carers’ previous earnings other than in exceptional circumstances.
The calculation will need to take into account affordability, sustainability and what is reasonable for the care that is being given. When P’s estate is sufficient and a significant amount of professional care is being provided, then it may be appropriate to base the payment on the cost of providing commercial care with a reduction of 20% to reflect the fact that no tax and national insurance will be payable. If P’s estate is limited the payment should be adjusted accordingly so that P is paying only what they can afford.
Deputies must keep payments under regular review, the frequency of the reviews will vary in each case but they must happen if there is a change in circumstances, for example, P’s living arrangements change, their care needs increase or reduce, they become entitled to, or loose, statutory funding or their circumstances change.
Tax liability on family care payments
HM Revenue and Customs treat payments to family members as voluntary payments which are exempt from tax and national insurance. It is however advisable to seek the Inland Revenues formal acceptance that a family payment is accepted as a voluntary payment.
What about payments to family members which are funded via the Local Authority or the NHS?
Some individuals are eligible under the Care Act 2014 for support from their Local Authority towards the cost of meeting their care needs. Similarly, those with a very high level of ongoing need may be eligible for NHS Continuing Healthcare funding. Those who are eligible for financial support from their Local Authority or the NHS can request a direct payment to assist with meeting their assessed needs. In certain circumstances, the Local Authority or NHS can be persuaded that there is clinical justification for a family member to be paid via the direct payment for providing care. In these circumstances, the payments to a family member are not being made via the individual’s personal funds so do not need to be approved by the Court of Protection. Family care payments which are funded by the NHS or the Local Authority will not be considered as ‘voluntary’ and will therefore be subject to tax and national insurance in the normal way.
The Public Guardian’s detailed guidance can be found here:
Produced by Christine Bunting of Hyphen Law
Brain Injury Group member firm Hyphen Law is a specialist Court of Protection law firm focusing on Deputyship Services and Personal Injury Trusts.
More information on Funding Care
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