In this article we look at the recently published practice note (SD14) from the Office of the Public Guardian (OPG). The practice note covers the Public Guardian’s position on care payments that deputies make to family members who are providing care for someone who lacks mental capacity, known as ‘P’.

When considering the care arrangements available for P, the deputy might wish to approve family care payments (also referred to as ‘gratuitous care’ payments) to be made to a family member who provides informal care for P. Before approving these payments, the deputy will need to ensure that they have reviewed the practice note and considered all factors impacting P.

What are family care payments?

These are payments made to family members and friends of P where an informal care arrangement is in place for helping with P’s hygiene, supervision, or companionship.

The kinds of care arrangements that might justify a family care payment include those where:

• there is no contractual relationship between P and the family member involved.
• the family member is providing the care by way of their natural love and affection for P.
• the care is informal in nature and not by way of a job description.
• the family member(s) do not have formally agreed hours, breaks or holidays.
• there is little or no demarcation of work between family members, and no one is responsible for securing contractual terms or service delivery*.

*For example a case manager (regardless of any formal arrangements in place for professional or regulated care).

If the care arrangements are more formal, then it would suggest that the family member is being directly employed as a carer, with employment and contractual rights. The family care payments guidance does not cover these arrangements.

What is a deputy authorised to approve?

Professional deputies are considered by the Public Guardian to have the authority to make decisions regarding family care payments under the terms of the order, whilst following the guidance and principles of the practice note.

The professional deputy will need to provide evidence of a best interests decision being made. Ensure this is saved to your matter and available for provision to the OPG.

If the Public Guardian does not consider that the decision follows the guidance or is not in P’s best interests, they may apply to the court for directions. In extreme cases, an application for removal of the deputy may be made.

When might an application to the COP be required?

If an agreement cannot be reached on the amount to be paid, or if there is a possibility of the decision being challenged by other family members, then the professional deputy may wish to seek specific approval from the court for these payments.

What needs to be considered?

The deputy will need to consider a number of factors in making the decision, which should be recorded within the best interest decision note:

• Is the care needed to meet P’s needs?
• Will the care be of a good standard?
• Is a care assessment required?
• What level of care is required, and should it be provided by a professional?
• Are the payments affordable, considering P’s estate, age, and life expectancy?
• What is the impact on P’s future capital?
• Do the payments reflect the input provided?
• How has the payment been calculated?
• Is the care over and above what a parent would normally give?
• Are there any long-term changes in P’s living arrangements impacting the amount of care provided?
• Do payments represent a saving on the cost of professional care provided?
• Have other household contributions made by P been taken into account?
• Does the carer live in P’s property rent-free or receive other income?
• What is the overall family situation?
• Does P require two people to manage their needs?
• Have the payments been made in consultation with the carer and other family members?

What about the levels of payments?

The deputy will need follow these steps when calculating the payment:

• Where P’s estate is sufficient and the family provide most care, the deputy may consider what allowance would be needed. If the amount is affordable, sustainable, and reasonable in relation to the amount of care provided, then payment can be made.
• Where P’s estate is sufficient and a significant amount of professional care is being provided, then the deputy may wish to calculate the allowance with reference to the approach Senior Judge Lush recommended in the case of Re HC [2015] EWCOP 29. That involves calculating family care by taking the commercial cost of care and reducing it by 20%. This in turn follows the approach taken by the King’s Bench Division of the High Court in quantifying heads of damages in personal injury litigation.The OPG will generally refer to the mean hourly salary (less 20%) for carers in the Annual Survey of Hours and Earnings (ASHE) (Table 26.5a) published by the Office for National Statistics as a benchmark for the commercial cost of care.
• Where P’s estate is limited, then the payment should reflect only what P can reasonably afford.When considering affordability, if there is an annual periodic payment P gets as part of a litigation claim, then such a payment is normally for care and case management. It can also be useful to refer to counsel’s advice on settlement of a damages claim. This helps in accessing an overall budget for family care when any professional care costs and case management costs are eliminated from the equation.

  In some situations, the carer may have given up a well-paid job to care for P. It is the Public Guardian’s view that, in all but the most exceptional circumstances, family care payments are not intended to replace salaries.

When considering an increase to family care payments, the deputy should consider the different factors as set above before approving an increase.

The deputy should agree the frequency of the payments with the carer – either weekly, monthly, or an annual basis.

Are these payments subject to tax?

The deputy should seek approval from HM Revenue and Customs (HMRC) for the payments to be considered as exempt from tax and national insurance (Employment Status Manual – ESM 4016). HMRC will consider a number of factors when deciding if payments are tax exempt, and if approval is not provided by HMRC, family members may sometimes need to be directly employed as carers alongside professional carers, where they will pay tax and national insurance on their payments.

What about reviewing payments?

The deputy should ensure that all best interests decisions are recorded, and that these are kept on file to show evidence on decisions made. When completing the annual report, the deputy should provide the Public Guardian with a breakdown of the care provider, details of hours provided and at what rate.

The deputy should also keep payments under regular review to ensure these are appropriate and affordable. The frequency of reviews will depend on P’s individual circumstances. A review should be carried out if there is a change in circumstances or P’s care needs.

By keeping the payments under regular review, along with the supporting documentation, this will allow your costs draftsperson here at A&M Bacon to demonstrate the necessity of the work when preparing the bill of costs for assessment by the Senior Courts Costs Office.

Our aim at A&M Bacon is to maximise recovery for our clients, whilst delivering expert advice in a friendly and approachable manner. If you found this article helpful, then please ensure you read the articles from my colleagues which cover a number of topics, including internal payroll processing, the importance of attendance notes, and tips to avoid reductions on assessment.

Should you have any queries following this article, please do not hesitate to contact us. Our friendly team is always happy to help.

Jill Thomason-Stewart, Court of Protection Costs Lawyer

14.02.2024