Understanding how legal authority engages with public care funding is essential for anyone responsible for managing the affairs of a vulnerable individual.
Background:
The legal landscape surrounding public care funding has long created challenges for property and affairs deputies managing care arrangements for incapacitated individuals. Historically, families and professional deputies navigating complex care packages often blended private financial resources with public support. Across various statutory regimes, specifically the Care Act 2014 regulations, NHS frameworks, Special Educational Needs (SEN) provisions, and Children Act 1989 regulations, public authorities can disburse funds directly to enable individuals to receive tailored care rather than directly commissioning services themselves. However, a significant operational hurdle emerged because managing these payments involves distinct care-related decisions as well as administrative obligations, with deputies often operating under the assumption that their general estate management powers were sufficient. This created legal uncertainty regarding fiduciary duties, potential liabilities, and remuneration for management tasks, not to mention confusion over where the boundaries between property management and welfare decision-making lay. A recent landmark ruling has provided much-needed clarity on how these funding streams should be handled legally.
Decision:
The Court of Protection (CoP) ruled that managing public funding disbursements involves welfare responsibilities that fall outside standard property deputyship powers. Under the Mental Capacity Act (MCA) 2005, general appointments do not automatically grant authority to manage these care payments. Consequently, obtaining authority requires a formal court application supported by detailed evidence. Under this framework, individual human deputies may apply for these combined powers, but trust corporations are entirely barred from doing so because they cannot make welfare decisions.
Based on past practices, the Court adopted 11 October 2024 as a "long-stop" date, meaning formal court approval is generally not required for direct payment administration work or costs managed before that date. Moreover, any management costs must only be charged if they were directly caused by managing these public funds, and past court decisions on costs cannot be changed.
Implications:
- Under the Mental Capacity Act 2005, a standard property and affairs deputyship does not automatically grant the right to manage public care disbursements (such as direct payments from local authorities or the NHS).
- As managing public care funds requires personal welfare decision-making, trust corporations are legally prohibited from holding these powers; only individual human deputies may apply.
- Management costs can only be deducted from the individual’s estate if they were directly caused by the administration of the public care funding. Historical, finalised court cost assessments cannot be retroactively altered.
- Deputies and legal practitioners must immediately audit existing court orders to verify whether their explicit legal authority covers public care fund administration. Operating without this creates severe legal vulnerabilities.
- To manage these funds going forward, individual deputies must submit a formal court application supported by a newly standardised, rigorous evidence checklist.
- The strict restriction on fees means that professionals must clearly segregate charges, separating public fund administration from general estate management to ensure absolute transparency for families and public bodies.
- Bypassing these procedures risks triggering costly disputes with local authorities or the NHS, which could jeopardise the continuity and stability of a vulnerable individual's personalised care package.