Adults with Incapacity Amendment Act: consultation

Part 3: Access to Funds (ATF)

Introduction

Part 3 of the AWI Act relates to the ATF scheme run by the OPG.

This part was intended to be a simple way of managing an adult’s financial affairs. It allows an individual supporting an incapable adult to obtain authority from the Public Guardian to withdraw money from the adult’s bank or building society account to meet household and other necessary expenditure for the adult.

Such a scheme is far less onerous than guardianship and we consider there remains a need for something like this. However the present ATF scheme has not been widely used. Only around 200 applications a year are received, and the way the present scheme is set up is viewed by some as complex, overly bureaucratic and inflexible, raising barriers to more people using the scheme.

How the scheme works at present:

An application is made by the applicant to OPG to transfer a set amount of funds from the adult’s current account to a new ‘designated’ account. It is the ‘designated’ account that the withdrawer can use to remove funds to spend on or on behalf of the adult.

A medical certificate and a statement from a person who has known the applicant for at least a year is part of the application and currently a fee of £97 is required. Once authorised the withdrawer has access to the funds in the designated account. The withdrawer uses these funds for direct debits and day to day expenditure of the adult, such as care home fees. This has to be estimated for the month and the amounts required are laid out in the application form.

On receipt of the application OPG will check it has been completed correctly and the correct fee is present. There is a large number of initial rejections such as no or incomplete medical forms, no supporting evidence for the requests made or no or incorrect fee. Once satisfied the application is competent, OPG will intimate the application on the adult and other persons listed in the AWI Act. An application must not be granted without the OPG affording any person who wishes to object an opportunity to make representations. Where the OPG proposes to refuse the application the applicant must get an opportunity to make representations if the applicant objects to this^[29]. In practice, representations can be made in writing, by telephone, in an online meeting (for example Zoom) or in person. OPG will then come to a decision. The Public Guardian can remit an application to the sheriff on her own instance, at the instance of the applicant or at the instance of any person who objects to the granting of the application. Once authorised OPG will add the details to the public register and send a certificate of authority to the withdrawer, which will contain the specific financial amounts in the application form. This can then be presented to the financial institution.

If there are any changes to the amounts requested, a new application has to be made to the OPG. The Public Guardian does not actively supervise withdrawers under the ATF scheme at present. The Public Guardian monitors withdrawers, meaning that a random selection of cases is taken from time to time for checking.

Powers available under The ATF Scheme at present

Authority to provide information about funds.

This application is for a certificate authorising any fundholder to provide the person with such information as the person may reasonably require in order to make a further ATF application.

Authority to open account in adult’s name

This application can be made at the same time as the application to access funds and is to open an account where there is not already one suitable for an ATF application. This would be used in cases where it is known the adult has funds or payments that could be accessed via this scheme if such an account was opened.

Authority to intromit with funds

As it stands this requires specific amounts of money (as detailed in the application form) to be transferred from the adult’s current account to a new ‘designated’ account. From this withdrawals can be made for the specific amounts and purposes detailed in the application. The withdrawer can also continue and set up standing orders and direct debits from the adult’s current account to pay the adults living expenses. The idea is that this transfer from current account to designated account provides some safeguard for the adult’s finances.

Suggestions for change

We don’t intend to change the method of application, as described above. We also propose to keep a separate application to find out what funds the adult has, prior to an application to access those funds, if there are any, as described above. What we are suggesting are changes to the main ATF application. This will allow the scheme to have greater flexibility, with the safeguard of OPG supervision.

We are suggesting that, rather than monitor withdrawers under the scheme, the Public Guardian should actively supervise withdrawers. This will mean taking an annual view of the actions of every withdrawer with respect to the adult’s finances. We think this would look similar to the accounting requirements for guardianships^[30], albeit with a lighter touch. This gives discretion for the Public Guardian to give directions as to the frequency of accounting periods, dispense with the need for submission of accounts, or require the guardian to do anything in lieu of submitting accounts. It also allows the Public Guardian to prescribe the form of the accounts and prescribe different forms for different cases. Given the limited powers of the withdrawer, it is anticipated that accounting will be of a briefer form than the accounting required in terms of the present guardianship scheme, at the discretion of the Public Guardian. Given the lower level of authority given to a withdrawer, the ATF scheme should remain as at present with no remuneration or reimbursement of outlays for a withdrawer.

At present the scheme is very restrictive, with any changes requiring an application to OPG. We understand that this is for safeguarding reasons, however it has also resulted in the scheme being considered unwieldy and difficult to use. Our proposal is for the scheme to grant proforma powers at the outset for the same functions it already does, without the necessity for additional applications to OPG for additional authority or to change amounts. Safeguarding will be provided by a requirement to estimate the amounts required for each purpose at the outset. This will then be checked by OPG on an annual basis to see that the withdrawer has acted appropriately. This will provide a deterrent and will allow OPG to make enquiries if anything untoward is found.

The AWI Act provides that the application must state the purposes of the proposed intromission with the adult’s funds, setting out the specific sums for each purpose^[31]. We think the latter half of this statement can be removed, allowing the withdrawer flexibility to change the amounts depending on circumstances. We would expect an indication of each amount still to be given to OPG, with an obligation in the AWI Act to do so, but the inclusion in the AWI Act of ‘specific sums’ leads to lack of flexibility and a new application being required should amounts change.

In order to make the scheme more usable and flexible our proposal is to remove the requirement for the certificate to reflect the exact finances to be accessed by the withdrawer. These will be to pay for care home fees, holidays, clothing, and other related goods and services for the adult^[32] . An estimate of these amounts can be provided to OPG at the time of application, for supervisory purposes, however they will not be reflected in the withdrawal certificate.

At present for instance, if the care home fees went up from £500 to £600 an application for variation of the amount would be required. Under our proposal the withdrawer can amend this amount for withdrawal, or any other amount that corresponds with the powers they have, without a variation application. There will be no specific limits on the amount any sum can be increased. Any transactions will have to be explained when accounting is provided to OPG. As explained above we think OPG should actively supervise withdrawers and a brief type of annual account, at the discretion of the Public Guardian, should be required.

The certificate will only reflect that the withdrawer has power to set up direct debits and standing orders for specific purposes and the other powers that are available under the scheme. Meaning that if bills go up or down the withdrawer can amend the standing order or payment without another application.

The setting up of a ‘designated’ account and transfer of funds from the adult’s current account to the ‘designated’ account can be confusing for financial institutions. There is mixed compliance with this, with some institutions providing direct access to the adult’s current account. Where institutions do provide access to the adult’s current account, these transactions are at present unsupervised. We think access should be provided directly to the adult’s current account, the risks associated with which can be offset by Public Guardian supervision. This makes for a clearer, less complicated scheme.

Varying pre-existing arrangements on the adult’s account

The AWI Act states^[33] that the withdrawal certificate may (amongst other powers^[34]) “authorise the continuance or making of arrangements for the regular or occasional payment of funds from the adult’s current account for specified purposes (for example: by standing order or direct debit)”

We think this is too restrictive. In order to make any adjustments to any existing arrangements that have been set up on the adult’s current account (for instance a standing order or direct debit), the withdrawer would need to apply for a full variation order^[35].

The wording is limiting and additionally, needs to grant the withdrawer, via the withdrawal certificate, power to vary any prearrangements on the adults account.

What we think the withdrawal certificate should allow

Therefore we think the withdrawal certificate should allow:

• Authority to open or close an account in the adult’s name
• Transfer of funds between the adult’s accounts
• The continuance, variance or making of arrangements for the regular or occasional payment of funds from the adult’s current account for specified purposes (for example by standing order or direct debit)
• The termination of regular or occasional payment of funds from the adult’s current account for specified purposes (for example by standing order or direct debit)
• The withdrawal of funds from the current account for specified purposes
• Administration and disbursement of funds for Self-Directed Support

Questions:

24. Do you agree that the powers and specific amounts should be decoupled?

25. Do you agree that the withdrawal certificate should contain standard, proforma powers for the withdrawer to use?

26. Do you agree that access should be given to the adult’s current account, rather than setting up a ‘designated account’?

Applications where there is a guardian, continuing attorney or intervener with powers relating to the funds in question

The AWI Act states^[36] that an application cannot be made in the case of an adult in relation to whom there is a guardian, continuing attorney or intervener with powers relating to the funds in question.

There are cases where an application for ATF may be necessary where there is an intervener or guardian in place in relation to the same funds. For instance interveners may have a power to transfer funds (perhaps from the sale of a house or other asset) into an account that in accordance with the least restrictive intervention principle^[37] should be administered under Part 3 of the AWI Act. In order to have a seamless transition, it may be preferable for the application to access funds to be made whilst the intervention order is still operative. The intervention order will fall once the powers in it have been used.

There is also the possibility that a guardianship order is granted but the estate has reduced so that it would be more appropriate to be managed by ATF. That would require an ATF application whilst there was a guardianship order in place in order to ensure there was no gap in protection. Transition from guardianship order to ATF is already provided for in the AWI Act^[38]. However the AWI Act itself states that an application for ATF cannot take place whilst a guardianship order for the same funds is in place, rendering the transition provisions inoperable.

We think that the provisions preventing ATF applications when there are attorneys with powers over the same funds should remain in place.

Question:

27. Do you agree that in certain circumstances, applications where there is a guardian, or intervener with powers relating to the funds in question should be allowed?

Application when there is already authorisation to intromit with the same funds

The AWI Act states^[39] that an application cannot be made to intromit with an adult’s funds if a person is already authorised to intromit with the funds of the adult to whom the application relates.

We think the wording “already authorised to intromit” is confusing and rather than refer to applications under this section, could refer to authorisations under other provisions as well, such as DWP appointments. We intend to clarify that a bar to applying under this section only applies if someone already is authorised only under Part 3 of the AWI Act to intromit with the same funds.

Question:

28. Do you agree that we should clarify that a bar to applying under this section only applies if someone is already authorised under Part 3 of the Act to intromit with the same funds?

Account held by fundholder in adult’s sole name

The AWI Act states^[40] that an application must specify an account held by a fundholder in the adult’s sole name which the applicant wishes to use for the purpose of intromitting with the adult’s funds.

We have heard that this may limit organisational use of the scheme. There may be occasions where an organisation, for ease of administration, would want to use a single client or corporate account to hold the funds of a number of people. Although these funds wouldn’t be in an account in the sole name of the adult, they would be clearly identified as the adult’s funds and belonging to the adult.

Question:

29. Does having an account in the adult’s sole name limit organisational use of the scheme?

Transition to ATF from intervention order

The AWI Act refers^[41] to transitions to the ATF scheme from guardianships. Currently there is not an equivalent transition available from intervention orders. Instead, people are encouraged to apply for a guardianship order as it involves less paperwork. However this might not be the least restrictive method according with the principles of the AWI Act.

As it stands a transition to ATF from guardianship requires an application, but it doesn’t need a counter signatory and the Public Guardian may disapply the requirement for medical certificate. We propose that the same applies to intervention orders. For instance, in accordance with the least restrictive principle, there could be an intervention order to sell a house, but then authority under the ATF scheme to deal with the proceeds.

Question:

30. Should we add the same transition provisions to intervention orders as there are for guardianships?

Sheriffs to be able to approve ATF if previously a guardianship order has been applied for and ATF is deemed a lesser intervention.

When a guardianship order is applied for through the court, the court rules provide that the application is served on a number of different persons, including the Public Guardian, in order that they can comment on the application or attend a hearing.

The Public Guardian provides comments regularly to the sheriff court on cases. There are often cases where the Public Guardian comments that a financial guardianship is not required and authority via the ATF scheme would be a lesser, more appropriate intervention. Often guardianship orders are granted in these cases.

We think one of the reasons is that if the financial guardianship application was refused, then the applicant would have to begin making an ATF scheme application from the beginning, denying the adult the protection and access to their finances that a financial guardianship could provide at that point.

We think, only in these specific cases, a sheriff should be able to grant authority via the ATF scheme, rather than a financial guardianship order. That would prevent the hiatus in applications creating a lack of protection and access to their finances for the adult. Our proposal, where the powers given in the withdrawal certificate are not bound to specific amounts, would make this possible.

Question:

31. Do you agree that sheriffs, under certain circumstances, should be able to grant powers to access funds under our new proposal?

Inclusion of authorised establishments in the ATF scheme

The AWI Act allows ‘a body’ to apply for ATF. For example, local authorities can apply. However, it excludes authorised establishments within the meaning of section 35(2) from applying. Authorised establishments under section.35(2) are:

• A health service hospital
• An independent hospital or private psychiatric hospital
• A state hospital
• A care home service
• A limited registration service

This is because they are specifically catered for by Part 4 of the AWI Act dealing with management of residents’ finances. Part 4 is very little used, as described later and we are proposing that it is removed. On that basis we think that authorised establishments should be allowed to apply under the ATF scheme, along with other organisations.

Question:

32. Do you agree that authorised establishments should be able to apply under the ATF scheme?

Intimation of application

As stated previously, the Scottish Law Commission (the Commission) envisaged ATF as being an application where an individual could obtain authority from the Public Guardian to withdraw the adult’s money for the adult’s benefit.

To reflect this intimation on interested parties is carried out by OPG. The most recent OPG statistics show that more than twice the number of applications are received from local authorities, or other organisations rather than individuals.

We are therefore suggesting, to share the administrative responsibility for this, that where the applicant is an organisation, they should provide intimation of the application to interested parties. Where the applicant is a lay person, OPG will provide intimation of the application as they do at present. This will reflect practice in the sheriff courts^[42].

Question:

33. Do you agree we should split intimation of the application between organisations and lay people (OPG)?