New Opg Practice Note Relating to Family Care Payments for Deputies

Posted: 3rd August 2016

The Office of the Public Guardian (OPG) recently published a practice note for Deputies in relation to the payment for care services provided by non-professional carers which you can read by clicking here.

I thought I’d provide a quick note on what these guidance notes advise.

‘Family care’ is defined as an informal arrangement where someone is providing care to a client because of their natural love and affection rather than financial gain. If more formal arrangements are in place, despite the fact a family member or friend may be providing the care, this could constitute an employment situation which falls outside the scope of the guidance.

If a payment is to be made, this must still be in the best interests of the client (s. 1-4 Mental Capacity Act 2005). The deputy should therefore consider the following:

• The care must be reasonably required to meet the client’s needs and be of a good standard;
• The payments must be affordable;
• The payments must properly reflect the input by the family carer and this ought to be evidenced
• The status of the carer and whether they have any perceived obligation or natural caring role towards the client (mainly re: minors);
• The care must actually be provided;
• The professional care in place, if any, including how much it costs and if the familial care will provide a saving;
• The client’s household contributions in comparison with the family member providing care, if they occupy the same property;
• The overall family situation; and
• The views of the client, other family members and close friends.

The practice note makes practical recommendations about working out the amount of the payment and reminds us that such payments are treated by HMRC as gratuitous and, therefore, tax free (all deputies should secure a ‘carers clearance’ letter from HMRC when a family care payment is being made). The note suggests there are three approaches to calculating an amount to be paid and these are:

1. Ask what the carer would like to be paid and if the amount is affordable, sustainable and reasonable in relation to the amount of care provided, then payment can be made; or
2. Calculate family care by taking the commercial cost of care in the client’s home area and reduce it by 20% to allow for the fact the payment is non-taxable; or
3. Where the client’s estate is limited, then the payment should reflect only what the client can reasonably afford.

The guidance confirms that there could be some form of indexation, although this is likely to be modest. It accepts that family care payments may vary between carers, even if the same hours of care are being provided to the same client. It stresses the need for a record of the decision making process as well as the payments themselves and it suggests that these are reviewed every time there is a change in circumstances of the client or the carer.

Professional deputies do not need to seek further court authority to make family care payments. If you are not a professional deputy (a lay deputy) you should seek further Court approval if you are both the deputy and recipient of the family care payment. You should also consider applying for approval if they are making a family care payment to someone they are closely connected to.