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5.8.6 ‘Capacity’ and Financial Arrangements for Children Looked After and Care Leavers Aged 16 & 17

SCOPE OF THIS CHAPTER

This guidance sets out the financial processes and arrangements where a 16 or 17 year old child looked after is assessed to lack ‘Capacity’ in respect of their ability to manage their financial affairs.

This guidance should be read in conjunction with the Mental Capacity Act Procedure in this manual, that deals with the application of the Mental Capacity Act 2005 in regard to 16 & 17 year olds.

AMENDMENT

In March 2017, Section 1, Background, was revised and updated.


Contents

  1. Background
  2. Financial Arrangements
  3. Benefits and Allowances for 16 & 17 Year Olds
  4. Case Transfer Arrangements
  5. Safeguarding and Financial Arrangements


1. Background

This guidance sets out the financial processes and arrangements where a 16 or 17 year old child looked after is assessed to lack ‘Capacity’ in respect of their ability to manage their financial affairs. This guidance should be read in conjunction with section 4.10 of the Hertfordshire Social Work Procedures Manual that deals with the application of the Mental Capacity Act 2005 in regard to 16 & 17 year olds. The underlying principle of the Mental Capacity Act 2005 is that a person is presumed to have ‘Capacity’ to make decisions. Arrangements for assisting them to manage their finances should only be put in place where a ‘Capacity’ assessment has been completed and evidenced that they lack ‘Capacity’.

Mental Capacity Assessments are decision specific, and in regard to this guidance relate to a child looked after or care leavers ability to manage a) their benefit claim/s, b) their savings and bank accounts and c) their financial assets and affairs.

For further details please also see ACS765 Hertfordshire Policy on Mental Capacity and associated forms ACSf765a Assessment of Capacity and Form ACSf765b.


2. Financial Arrangements

In situations where a foster carer has been acting as the child’s (under age 16) ‘benefit appointee’, in respect of the child’s Disability Living Allowance or the Brokerage Service has been acting as the corporate appointee, a ‘Capacity’ assessment should be completed when the child reaches the age of 16. If the young person is assessed to lack ‘Capacity’ (in regard to managing their benefit claim and associated payments) the previous arrangements can continue, i.e. the ‘benefit appointee’ or ‘corporate appointee’ can continue to manage the child’s benefit claim.

The ‘Capacity’ assessment must be undertaken in a sensitive manner, with recognition given to the delicate nature of personal finances. Where it is deemed that a young person lacks ‘Capacity’ to manage their benefit claim and financial affairs, consideration must be given to supporting the young person to have as much choice and autonomy as possible regarding the use of their benefits and allowances.

Where a foster carer is acting in the role of ‘benefit appointee’ they must understand what the role involves. In effect, a ‘benefit appointee’ ‘stands in the shoes’ of the claimant under the benefit regulations and can sign forms, make appeals and deal with the child/young person’s benefits claim as if it was their own. Even though the young person may not be able to manage the whole claim process or the management of their benefits and allowances, it is important that they are involved as much as possible with decisions about how their money is spent and used.

All money paid to the ‘benefit appointee’ must be used for the sole benefit of the child/young person, for whom the ‘benefit appointee’ is acting.

See “The Management of Disability Benefits Children Looked After 2016-2017” and the use of the “Disability Benefits – Expenditure and Audit Sheet” to evidence the use of the benefits.

It should be noted that all Disability Living Allowance (DLA)/Personal Independence Payment (PIP) should be used to meet any disability needs of the child/young person and all Employment and Support Allowance (ESA) (16 & 17 year olds) should be used to meet any additional and day to day needs. How the DLA/PIP/ESA is to be used should be set out in the child/young person’s placement plan and must be agreed by the social worker with the carer/keyworker.

In the exceptional situations where there is an amount of unused or accrued DLA/PIP/ESA, this should be added to the child/young person’s Junior ISA.


3. Benefits and Allowances for 16 & 17 Year Olds

It should also be noted that young people who are in receipt of DLA are required to transfer their claim to a PIP claim, on, or shortly after their 16th birthday.

In addition, young people aged 16 & 17 (regardless of being looked after) who are deemed ‘sick and disabled’ are eligible to claim ESA. From the age of 18, young people who have a liability to pay rent may be eligible to claim housing benefit to cover the cost of the rent.

Children looked after (and care leavers) aged 16 or 17 continue to be eligible for a range of in care and leaving care allowances despite claiming a means tested benefit. Once a young person is in receipt of ESA, their pocket money, or leaving care maintenance allowance and their clothing allowance ceases. The ESA should be used to cover these allowances.

Where a foster carer is acting as a ‘benefit appointee’ (for a child/young person with an ongoing learning difficultly) it is expected that the carer has a bank account in their name into which all of the child/young person’s benefits are paid. This enables the foster carer to manage the child/young person’s benefit income and also provides a convenient method to audit benefit income and expenditure. A child/young person should not have an account in their name, given the risk of fraud and the difficulty of managing a third parties account.

The Brokerage Support Service can set up a Work Breakdown Structure (WBS) account on behalf of the child/young person where they require a ‘corporate appointee’.

Where a young person aged 16 or 17 lacks and regains ‘Capacity’, on an episodic basis, the social work responsible for the case should use the ’Capacity’ and ‘benefit appointee’ or ‘corporate appointee’ process to ensure arrangements are in place to manage the young person’s finances and benefits.


4. Case Transfer Arrangements

Throughout the process of transition from a Children’s Service to an Adult Service, consideration should be given to planning the transfer of all financial, benefit and appointee responsibilities. Young people and families should be made aware of the Health and Community Services (HCS) ‘Fairer Charging Policy’ and that a charge may be applied where HCS is acting as the young person’s ‘corporate [benefit] appointee’.


5. Safeguarding and Financial Arrangements

Consideration must be given to the risk of financial exploitation where a young person lacks ’Capacity’, is in receipt of a range of benefits and their finances are managed by a third party, i.e. a ‘benefit appointee’. Robust arrangements should always be in place for those who lack ‘Capacity’, in order to limit the possible risk of financial exploitation. Arrangements could include the young person having an advocate and a regular audit of their finances been undertaken.

End