Financial abuse may involve money, property or belongings. It can take many forms and can include:
Financial abuse can often be present alongside other forms of abusive behaviour / abuse. The impact of financial abuse should not be underestimated and can be every bit as significant as other forms of abuse. Financial abuse can have lasting psychological effects for people and has been linked to negative physical health outcomes and a decline in emotional wellbeing, which in turn can increase the risk of further experiences of exploitation.
Whilst a person who lacks mental capacity may be considered to be more at risk of financial abuse, someone with capacity can be equally susceptible. It should not be assumed that if a person who has capacity makes a gift, then it cannot be regarded as theft. Coercion and undue influence, emotional / psychological grooming and predatory behaviour as well as the reasonableness of the transaction all need to be considered.
Most financial abuse referrals to WYFEAT involving adults at risk are perpetrated by people who are known to the victim and this often includes family members, carers, friends and neighbours. Sometimes the abusers have legal authority to manage the victim’s finances (LPA / EPA / Appointeeship / Court appointed deputy). The circumstances may make offences hard to detect.
If you are in a position of trust and use this position for personal / financial gain this is financial abuse.
Having access to a person’s finances can create opportunity for criminal behaviour and abusers may seek to manipulate relationships of trust and deliberately target people who face additional challenges in managing their finances independently. In some cases, an abuser may seek out opportunities to take control of the person’s finances under the pretence of ‘helping’.
You should always seek appropriate independent advice to ensure that you are fully aware of your legal responsibilities before agreeing to act as a legal representative / attorney under EPA / LPA / appointee. These positions of trust carry legal responsibilities which you are required to comply with.
For more information about theft and fraud, see The Theft Act 1968 and The Fraud Act 2006 – both available on www.legislation.gov.uk.
The Mental Capacity Act allows us to use lasting power of attorney to appoint someone called an attorney. This attorney doesn’t have to be a lawyer or someone with specialist knowledge. A partner, a family member, a friend or a professional can be an attorney.
This attorney has the legal power to make certain decisions in a person's best interests if they’ve lost capacity to make decisions themself. In some cases, they can make decisions for before a person loses capacity, if you want them to
Some things your financial attorney can decide include:
- Paying bills
- Claiming or collecting benefits
- Selling your house or flat
- Spending money on your house or flat
- Signing or terminating a tenancy
You can agree to this type of lasting power to be used as soon as it’s registered, if you still have capacity.
Once you start acting as attorney for someone you have specific legal responsibilities and there are rules about what an attorney can and cannot use the donor’s money for. See Lasting power of attorney: acting as an attorney: Property and financial affairs attorneys – GOV.UK (www.gov.uk) for further information.
You must:
You must keep the donor’s finances separate from your own, unless you’ve already got something in both of your names like a joint bank account or you own a home together.
You can be ordered to repay the donor’s money if you misuse it or make decisions to benefit yourself.
You can apply for the right to deal with the welfare benefits of someone who cannot manage their own financial affairs.
As an appointee you are responsible for making and maintaining any benefit claims. You must:
If the benefit is overpaid, depending on the circumstances, you could be held responsible.
An appointee does not have the authority to deal directly with banks or with capital or income apart from welfare benefit income, belonging to the incapacitated person. An appointee does, however, have the authority to deal with an incapacitated person’s Post Office account.
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You can apply to become someone’s property and financial deputy if they lack the mental capacity to manage their own financial affairs. This means they cannot make a decision for themselves at the time it needs to be made. As a deputy, you’ll be authorised by the Court of Protection to make decisions on their behalf.
If you are a property and financial affairs deputy, you’ll have a legal responsibility to look after the person’s finances in their best interests - to do things like pay their bills or organise their pension. If you’re appointed, the Office of the Public Guardian (OPG) will help you carry out your responsibilities and as a deputy, you’ll be supervised by the Office of the Public Guardian. They are authorised to contact you or visit you to check you’re meeting their standards for deputies. They can also give you advice and support. You will have to produce an annual deputy report explaining the decisions you have made.
If you fail to meet their standards, OPG might ask the court to stop you being a deputy.
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Unlike services provided by the NHS, social care is not free at the point of use. Adult Social Care in England is strictly means tested (apart from in very specific cases such as when someone receives free S117 of the Mental Health Act 1983 or if you qualify for full NHS Continuing Care funding).
Your care and support costs are your responsibility, or the responsibility of your legal financial representative. Payment of care fees is not optional.
If you request access to state funded care - either in your own home or in a care home - you must undergo a financial means test and a care needs assessment to determine your eligibility for funding assistance. Anyone with assets of more than £23,250 must pay for all social care themselves, unless they have long term complex health needs, when the NHS may contribute towards funding their care.
If you make an application for financial assistance either for yourself, or on behalf of someone else as their legal representative, to help reduce your care costs, the law requires you to declare your true financial circumstances. Failure to do this could cause you, or your representative, to be subject to legal proceedings.
Your care home fees are your responsibility. You are liable to pay all your care costs yourself from the date of your admission, unless you qualify for financial assistance from your local authority.
You must have a financial assessment to see if you qualify for financial assistance.
The cost of a care home placement will depend on:
Private sector care home providers choose how much to charge for placements if someone is funding the entire cost of the placement themselves ie they are what is known as a ‘self- funder’.
If you are relying on receiving financial assistance from the council to help you pay, the council will consider your care needs and negotiate with the care home to agree the overall cost of the placement. You must pay the amount you have been assessed as being able to afford towards the overall fee. If you are relying on financial assistance, you will only receive assistance up to a maximum of the council’s negotiated rate. If someone is considering choosing a care home placement which costs more than the overall fee the council has agreed, there will be extra charges that the council will not cover. These additional charges are often known as ‘third party top up’ fees.
Third party top up fees cannot be paid from the capital / assets of the person who is receiving care in the care home placement.
Third party top up fees must be met by a third party such as a friend or family member. They must be paid directly to the care home. If a third party does agree to pay top-up fees, their contribution will form part of the contract with the care home for the placement and the third party will be asked to sign the contract. If they stop making these top-up payments it is highly likely that the person in receipt of care would have to move to a cheaper care home.
The law is clear that money or property must not be given away or sold below market value to secure more financial assistance from the state. If this happens, you will be treated as if you still owned it. The money or property is then treated as “notional capital” and it will affect the amount of financial assistance you can get. The people you have given the asset to may also become liable to pay for your care home fees.
Placing a property in trust: the law states that you must not transfer ownership of assets such as a home, or savings, into a trust to avoid or reduce your care costs.
If the council believe you have placed any of your assets in trust with a view to the avoidance of paying care fees, they will decide that you have deprived yourself of your own assets to take advantage of state financial assistance and you will not qualify for state financial help towards the cost of your care.
You should always seek independent legal advice.