How to Ensure a Deputy's Gratuitous Payment is Free from Challenge
The issue of gratuitous care allowances has been very topical recently and the recent case of Re HC [2015] EWCOP 29 demonstrates the Court of Protection's approach to payments for care provided by family members of a person lacking capacity.
The case involved a lay Deputy who was appointed to look after his sister's property and financial affairs. His sister suffered from profound memory loss, frequent seizures and acute psychosis following an accident in 1995 caused by clinical negligence, for which she received a £600,000 settlement and periodic payments of £25,000 a year.
As this matter was before the implementation of the Mental Capacity Act 2005, the Deputy was appointed as a 'Receiver'. The Deputy gave up his job as a team leader in a chemical manufacturing company to become a full time carer for his sister, and it was agreed that he would receive a gratuitous care allowance of £23,000 a year from the periodic payments payable to his sister.
Following the introduction of the Mental Capacity Act 2005, the Deputy applied for an Order in 2010 to confirm that he could continue to be remunerated for his sister's care. However, in 2015 the Office of the Public Guardian referred the matter to the Court of Protection, as they declared that the 2010 Order did not contain a clause to allow the Deputy to receive payment.
Senior Judge Lush therefore carried out a best interests assessment, which included distinguishing between past and future payments and care and case management services. He confirmed that the Court should look at the commercial costs of care and reduce those costs by 20%, as gratuitous payments are not subject to income tax or national insurance contributions.
Senior Judge Lush stated that the Court of Protection's authorisation for gratuitous payments by a professional deputy to themselves, or by lay deputies to family members, is always required because these give rise to a conflict of interest. However, in this case, the Court agreed that the Deputy could continue to claim the £23,000 per annum, as the services provided by the Deputy were reasonable and sustainable.
The Office of the Public Guardian will shortly be issuing a practice note on this.