Court of Protection approves £23,000 per year payment for gratuitous care
The subject of what family members should be paid for gratuitous care has been very topical recently. The most recent case gives some guidance.
Comment
This is another eminently sensible decision from Senior Judge Lush. Readers will be aware that the question of gratuitous care payments has been very much in the mind of the OPG and the Court of late. This judgment at a human level recognises the huge sacrifice a brother has made to care for his sister and comes to a very sensible conclusion about the way that the finances should be arranged to allow this to continue to happen.
Case Details
This case concerns Helen, an unmarried former secretary who has profound memory loss, impaired executive functioning and intermittent post-ictal psychosis. Helen received a settlement of £600,000 plus periodic payments of £25,000 per year. Because the periodic payments are index linked, the current level is just over £32,500. The NHS also agreed to indemnify Helen if her current care funding was withdrawn or reduced.
At the time of the settlement the gratuitous past care provided by Helen’s family was valued at £105,000. However, Counsel said in their opinion “we note that this sum will not actually be paid out to the claimant’s family, who have chosen not to receive any compensation to reflect their huge efforts in caring for the claimant since 1995, preferring to leave this money within the claimant’s fund.”
Helen’s brother, Adrian, was her Receiver and is now her Deputy for Property and Affairs.
Adrian has an MCs in advanced manufacturing technology and an HND in mechanical engineering. He gave up his job as a team leader in a chemical manufacturing company to be a full time carer for his sister. At the time of the handover meeting with Senior Judge Lush various things were agreed:
(a) Adrian’s gratuitous care allowance as Helen’s primary carer and case manager would be £23,000 a year.
(b) The budgets for the period from 1 September 2006 to 31 March 2007, and for the year from 1 April 2007 to 31 March 2008, which had been drawn up by Adrian, were approved in principle.
(c) Helen would think about whether she would like to make a will.
(d) The family would consider whether they were prepared to invest part of the balance of the lump sum payment (about £300,000) in equity-based products and, if so, to what extent.
(e) Rule 87 of the Court of Protection Rules 2001 (for which there is no equivalent in the current 2007 Rules) would be waived. This rule provided that a lay receiver could not employ a solicitor at the patient’s expense to carry out work that a lay receiver could do personally. The rule was waived because damages cases are usually busy for the first two years post-settlement and legal assistance and advice can be of considerable help to lay deputies.
An application was made by Adrian acting on the instructions of the OPG. Adrian applied to the Court for an Order:
(a) confirming that the court had agreed that he could be remunerated from the periodical payments payable to Helen;
(b) confirming that he had not acted unreasonably or unlawfully in the amounts he had taken;
(c) confirming that he could continue to be Helen’s lead carer and case manager and that he may be remunerated in the same way;
(d) confirming that he is not employed by Helen or providing care to her on a self-employed basis; and
(e) appointing him as deputy to make decisions on Helen’s behalf in relation to personal welfare matters.
Adrian explained what he did for his gratuitous care payment and a consultant neuropsychiatrist commented that “[Helen] has been largely dependent on carers and unable to live independently. She continues to suffer from periods of acute psychosis. … In addition to all this, she unfortunately continues to experience frequent seizures. Her family brought a record of recent seizures covering approximately a 6 year period. This suggests that on average she continues to experience 4 or 5 seizures per month of varying length and severity. She now lives in Bognor Regis where she has 24 hour care, which is carried out by a group of 8-10 carers, who work shifts. Her family, particularly her brother Adrian, have been very involved in her care and it is clear that they have campaigned long and hard to get her the best possible care in the circumstances.”
The OPG was happy with payments up to 2009/2010 but thought that the Order form 2010, which is when Adrian became a Deputy rather than a Receiver, did not actually allow Adrian to take those payments. The OPG wanted an Order to clarify whether the Court was happy that Adrian should be paid for the years from 2010 onwards.
Senior Judge Lush directed that everything up until 2nd November 2015 was retrospectively authorised. He asked Adrian to arrange for a brain injury case manager to quantify the value of the care and case management services he provided. The instructions were “the brain injury case manager shall evaluate and quantify the services provided by the deputy to Helen as if they were being provided by a professional carer and case manager of the same age as the deputy, rather than by a member of the family, and the court shall make any adjustments that may be necessary taking into account the fact that the deputy is not a professionally qualified carer or case manager and that no income tax or national insurance contributions are payable on the payments made to the deputy”.
The findings were as follows:
“I instructed Judy Crocombe of Independent Living Solutions Ltd (‘ILS’) and Judy’s CV is attached as exhibit ATL2. As directed by the court, Judy attended with myself to fully assess the care and case management I provide to Helen, as if I were doing this as a professional.
Section 2 of Judy’s report details the duties and estimated costs of case management input required by Helen per month. The court will see that the total estimated costs per annum where a suitable qualified, experienced and supervised care team leader is not available equals £47,565.60. The estimated costs per annum where a suitable qualified, experienced and supervised care team leader is available, and pharmacy visits and supervision can be provided by him/her, equals £36,138.40.
Section 3 details the care support required by Helen per week. The total estimated costs per annum based on the hours identified for the usual care support that I provide, equals £9,705.00. The estimated costs per annum including hours that can be completed by a case manager or care team leader equals £10,657.30. In sections 2 and 3 it is noted that 24 hour on call costs are not included in the calculations.
I can confirm that in respect of future payments for the care and case management services I provide, I would not seek to ask the court for more than £23,000 per annum, which is significantly lower than the total amounts detailed in Judy Crocombe’s report. If Helen were to receive care and case management services from a professional, then I wholly agree with Judy that the duties detailed in her report would be necessary to ensure Helen is safe and well. A couple of times historically I have tried to decrease the amount of care and case management that I provided to Helen, as I wanted to see whether this was possible and whether I could try and have paid employment as well. Unfortunately, there was an almost immediate clear deterioration in Helen’s physical and mental well-being and I could not bring myself to continue at the decreased hours. I found that I was soon providing the same amount of hours as I had been previously.
Historically, it has been difficult for me to undertake privately employed work, as well as to ensure that Helen’s needs are met sufficiently. I would always wish to prioritise Helen’s well-being and it has only been recently that I have been able to commence private tuition for a few hours each week, earning approximately £50 per week term time (approximately £20 per hour). I am teaching adult GCSE Maths Class Wednesday evenings for 2½ hours and attending college Wednesday afternoons for 4 hours to do a PGCE. I am therefore not available for Helen during these times and I have had to reschedule a couple of her medical appointments already. I will be monitoring any effect on Helen’s well-being closely, but this is less demanding on time than previous attempts.
I have previously made the court aware of my personal situation in respect of the amount of time I spend with Helen, both providing direct care to her and also in the administrative work that she is unable to do herself. I can confirm that I am not asking the court to authorise payments to me for the total amount stated by Judy Crocombe in her report.
I confirm that I am in agreement with Judy’s report insofar as the background and current situation is described. I do not propose to comment on the estimated hours that she has detailed, as this is very much outside my expertise and is within the remit of Judy Crocombe herself.”
The detail of Judy Crocombe’s report is contained in the Judgment and is a very useful guide. Judy’s conclusion was “as detailed above, Adrian is providing an incredible service to his sister Helen, acting as her deputy, case manager, care support worker and care team leader. I have no doubt, from the information I am party to, that he completes this to a very high standard, which can only be an absolute asset to Helen. Adrian is in the difficult position of juggling many roles both for/with Helen, and his own family, whilst ensuring that he is able to care as he wishes both for her and his own family. Whilst what Adrian does naturally cannot be fully quantified, this report aims to identify his many different roles and quantify his input in order to inform the court as requested above.”
Senior Judge Lush explained the law in relation to gratuitous care payments:-
“In Re HC [2015] EWCOP 29, which was published on the BAILII website on 23 April 2015, I summarised the principles relating to gratuitous care payments as follows :
“When it calculates a ‘gratuitous’ care allowance for family members who provide care to someone with an acquired brain injury, the Court of Protection broadly applies the criteria applied by the Queen’s Bench Division of the High Court in quantifying this head of damages in personal injury litigation. Accordingly, as long as such an allowance is affordable, the court will take the commercial cost of care as the ceiling and reduce it by 20%.”
In Housecroft v Burnett [1986] 1 All ER 332, at 343e, Lord Justice O’Connor held that:
“In cases where the relative has given up gainful employment to look after the plaintiff, I would regard it as natural that the plaintiff would not wish the relative to be the loser and the court would award sufficient to allow the plaintiff to achieve that result. The ceiling would be the commercial rate.”
The 20% reduction from the commercial rate largely reflects the fact that no income tax is payable in respect of a gratuitous care allowance. HM Revenue & Customs’ Employment Status Manual describes the tax status of such an allowance as follows:
“ESM4016 – Particular occupations: care workers – payments under Court of Protection Order or from trust fund
Payments towards the cost of maintenance of a husband, wife or other close relative or dependant out of the income of a severely incapacitated person who receives funds under an order of the Court of Protection are regarded as voluntary payments and not as income of the recipients. Therefore, there will be no tax or National Insurance Contributions consequences on such payments made for caring duties. Similarly, where payments emanate out of a Trust Fund set up for this purpose there is unlikely to be an enforceable contract, therefore, there should be no question of tax being assessable as employment income or of a liability for Class 1 NICs. Caring activity under these circumstances would not be gainful employment so there will be no liability for Class 2 NICs. The services provided are unlikely to be regarded as commercial in nature or amount to valuable consideration so there will not be a charge to tax on trade profits or on income not otherwise charged to tax.”
Senior Judge Lush also discussed index linking. He also confirmed that a Deputy should always apply to the Court for authority to pay themselves a gratuitous care allowance and a lay Deputy should always apply to the Court if they intend to pay a gratuitous care allowance to any members of the family.
Senior Judge Lush commented that “it was patently obvious that Adrian is an exemplary deputy who has consistently acted in good faith and in his sister’s best interests”.
Senior Judge Lush was satisfied that:
(a) the care and case management services that he provides are reasonably required to meet her needs and are of a high standard. As Judy Crocombe remarked, he “is providing an incredible service … to a very high standard” and is “an absolute asset to Helen.”
(b) the payments are affordable taking into account Helen’s resources, age and life expectancy. They are being met entirely out of her income in the form of periodical payments and involve no encroachment on her capital.
(c) the payments represent an enormous saving on the commercial cost of these services, which, according to Judy Crocombe’s report, is double the amount of the gratuitous care allowance that Adrian is actually receiving.
Senior Judge Lush therefore confirmed that Adrian should be paid an allowance of £23,000 a year tax free in accordance with ESM4016 until further order. Because Helen’s periodic payments are linked to RPI rather than ASHE (because her case settled before the Thompstone case), Senior Judge Lush said it was most appropriate to link the payments to that index.
Senior Judge Lush also discussed the balance between reviewing the level of the payment and the costs of an application and he said:
“In our initial discussions, the OPG suggested that these payments should be reviewed regularly. However, a review process of this kind is not cheap and, inevitably, it will have a knock-on effect on the amounts sought by claimants in respect of Court of Protection costs in future claims for damages for personal injury and clinical negligence. In this case, I would be surprised if the total bill came to less than £2,500. In addition to the court’s application fee of £400, Judy Crocombe charged £942.60 for her report, and no doubt Foot Anstey will shortly be presenting Adrian with an invoice for their advice and assistance in this matter, if they haven’t done so already.
In Helen’s case, because of the wide gulf between the commercial value of the services Adrian is providing and the actual payment he is receiving, I consider that it would be disproportionate to go through this process too frequently, and I suggest that Adrian’s gratuitous care allowance should be formally reviewed again in 2022 or earlier, if necessary, because of a change in his or Helen’s circumstances”.
December 2015
HNL, Re [2015] EWCOP 77 (19 November 2015)
