3.6 Money Management – Trafford APPP Resource

1. Introduction
2. Supporting Adults to Manage Their Own Financial Affairs
3. Appointing Someone to Manage an Adult’s Financial Affairs
4. Financial Irregularities
5. Further Reading
- 5.1 Relevant chapter
- 5.2 Relevant Information

1. Introduction

Some adults can manage their own finances with no or minimal support; while others may need support to help them develop their money management skills.

There will be some adults who do not have the mental capacity to manage their own financial affairs at all and will need someone to be appointed to manage their financial affairs for them.

This chapter outlines the main issues about managing money on behalf of adults with care and support needs and about the different types of roles involved.

2. Supporting Adults to Manage Their Own Financial Affairs

If an adult has the mental capacity to make decisions about their finances, they must always be permitted and supported to do so. They may need support with shopping; paying bills and budgeting; keeping cash and bank cards safe and online banking for example.

The adult should also be encouraged and supported to store their financial documents securely, such as bank statements and PIN numbers. If possible, they should be discouraged from storing large quantities of money at home in order to reduce the risk of financial abuse and / or financial irregularities.

Any potential risk of theft by other people should be explained to the adult, so they can consider this as part of their decision-making process.

3. Appointing Someone to Manage an Adult’s Financial Affairs

See Mental Capacity chapter

Where an adult lacks mental capacity to make their own financial decisions, then someone else may need to make those decisions for them or help them to make decisions.

On a one-off basis, if there is a single important financial decision to be made and the adult lacks the capacity to make it at that time, an application can be made to the Court of Protection for an order in this circumstance. See Apply for a one-off decision from the Court of Protection: Overview (gov.uk).

If the adult is likely to remain lacking in capacity to make financial decisions on an ongoing basis, then someone may be appointed to make financial decisions for them or help them to make financial decisions.

3.1 Attorney under a power of attorney

The adult may have appointed an attorney under a lasting power of attorney (LPA) or enduring power of attorney (EPA).

A property and financial affairs LPA gives an attorney the power to make decisions about money and property such as:

managing a bank or building society account;
paying bills;
collecting benefits or a pension;
selling a home.

See Find out if someone has an attorney, deputy or guardian acting for them (gov.uk)

3.2 Appointee – Department for Work and Pensions benefits

An appointee is someone appointed by the Department for Work and Pensions (DWP) to act on behalf of an adult who is entitled to benefits from the DWP. They can only act for the adult in relation to those benefits, not their wider financial affairs.

An appointee can be:

an individual, for example a friend or relative;
an organisation or representative of an organisation, for example a solicitor or local authority.

An appointee is responsible for making and maintaining any benefit claims, for example:

signing benefit claim forms;
informing DWP about any changes which affect how much the adult (the claimant) gets;
where the benefit is paid directly to the appointee, spending it in the adult’s best interests;
informing the DWP of any relevant changes of circumstances, such as if the adult becomes capable of managing their own benefits and the appointee is no longer needed.

Following the appointment, the DWP will monitor the situation to make sure it remains correct.

The appointment can be stopped if:

the appointee does not act properly under the terms of the appointment;
the adult is clearly able to manage their own benefits;
the appointee becomes incapable of performing the role.

3.3 Property and financial affairs deputy

A property and financial affairs deputy (a deputy) is appointed by the Court of Protection to manage an adult’s financial affairs generally, and so has a wider role than an appointee appointed by the DWP.

They are responsible for helping an adult make decisions (or make decisions on their behalf) where that adult lacks the mental capacity to make their own financial decisions (see Mental Capacity chapter). The deputy must consider the adult’s level of mental capacity every time they make a decision for them, and not assume that it is the same at all times and for every type of decision. The Court of Protection will make an order setting out what the deputy can and cannot do.

The Court can appoint two or more deputies for the same adult, in which case the deputies can make decisions either:

together (known as joint deputyship), which means all the deputies have to agree on the decision;
separately or together (jointly and severally), which means deputies can make decisions on their own or with other deputies.

A property and financial affairs deputy can be:

an individual, for example a friend or relative;
an organisation or representative of an organisation, for example a solicitor or local authority, in which case they may be paid for carrying out their duties.

The Court of Protection can appoint a specialist deputy (called a panel deputy) from a list of approved law firms and charities, if no one else is available.

Someone applying to be a deputy must pay a fee to apply (the applicant). Before the appointment of a deputy, the Court of Protection will check:

whether the adult needs a deputy; and
that there are no objections to the appointment.

The applicant may also have to pay to set up a ‘security bond’ before they can be appointed. This is a type of insurance that protects the finances of the adult they are to act as a deputy for. The amount of the security bond depends on:

the value of the estate of the adult the deputy is acting for; and
how much of their estate is under the control of the deputy.

A security bond is not required if either:

the deputy is a representative of a local authority; or
the court decides that it is not necessary, for example if the adult’s estate is of low value.

The appointment of the person as a deputy will continue until the court order appointing them is changed, cancelled or expires.

Once appointed, deputies will be supervised, and provided with advice and support, by the Office of the Public Guardian, to check that they are meeting their standards for deputies. They must also pay an annual supervision fee.

When making a decision, a deputy must:

make sure that it is in the best interests of the adult for whom they act;
consider what they’ve done in the past;
apply a high standard of care – this might mean involving other adults, for example getting advice from relatives and professionals such as doctors;
do everything they can to help the adult understand the decision, for example explain what is going to happen with the help of pictures or sign language.

A deputy must submit an annual report to the Office of the Public Guardian, setting out the reasons for decisions taken and why these were in the adult’s best interests.

Deputies must not:

take advantage of the adult’s situation, for example abuse them or profit from a decision taken on their behalf;
make a will for the adult, or change their existing will;
make gifts unless the court order permits this;
hold any money or property in their own name on the adult’s behalf.

Deputies must make sure that:

their own property and money is separate from that of the adult they are acting for;
they keep records of the finances they manage on the adult’s behalf and include these in their annual deputy report:
they keep copies of:
- bank statements;
- contracts for services or tradespeople;
- receipts;
- letters and emails about their activities as a Deputy;
- expenses claimed for, such as phone calls, postage and travel costs.

A deputy may need to manage a court funds office account on the adult’s behalf. This is an account that was opened for them by a court order, for example for money they received from a court case.

See Deputies: Manage a Court Funds Office account (gov.uk)

4. Financial Irregularities

All financial irregularities should be reported as soon as they are noticed. Unexplained financial discrepancies may warrant a safeguarding concern being raised.