Related Sector: Health & Social Care

The Mental Capacity Act 2005 “came of age” this year – where has the time gone? It is sometimes difficult to believe that 18 years have passed since the Act became statute. Although, if we look at the commencement date, I guess we could say it has just celebrated its “sweet sixteenth”.

Either way, it is certainly not a new piece of legislation, which is why the complaint against North Yorkshire County Council makes for a depressing read.

The Complaint

The complaint involved the Council’s repeated missed opportunities to assess Mrs Z’s mental capacity in relation to her ability to manage her finances. This led to them charging her for the full cost of her care fees for several years before she died, based on incomplete information regarding her financial affairs.

The executor of Mrs Z’s will, Mr X stated that:

  • The Council wrongly charged his deceased relative’s estate more than £21,000.
  • The Council incorrectly calculated what his relative was able to pay towards her care costs. He argued that the Council’s actions caused him frustration and distress.

The Law

The Care Act 2014

The relevant primary legislation is sections 14 – 17 of the Care Act 2014 (Care Act). The Care and Support (Charging and Assessment of Resources) Regulations 2014 puts a bit of flesh on the bones. Both are accompanied by a whole chapter of The Care and Support Guidance, Chapter 8, which aims to explain the meaning of the Act and Regulations.   

Care is an enforceable right under the Care Act but only if you are eligible - unlike NHS care that is free at the point of need. If you are eligible to have your needs met by your local authority, and you are seeking home care, then the Care Act contains a power for the local authority to charge by reference to your means. There are a lot of regulations and guidance about how the local authority should calculate your means. This is to ensure that you pay no more than the rules specify. 

The Care Act 2015 does not contain any right of appeal. A public authority’s decision is valid until it is challenged either by public law or through the complaint system.

Principles of the Care Act

The following overarching principles ensure that people should only be required to pay what they can afford:

  • A financial assessment should ensure that people are not charged more than is reasonably practicable for them to pay.
  • The local authority should undertake a comprehensive, fair, clear, and transparent assessment so people know what they will be charged.
  • The financial assessment should promote wellbeing, social inclusion, personalisation, independence, choice and control, and be person-centred.
  • The financial assessment charging rules should be applied fairly and equitably to minimise differences.
  • The charging policy should be sustainable for local authorities.
  • The charging policy should be compliant with the Mental Capacity Act 2005.

Who is required to pay under the Care Act?

The pay framework is as follows:

  • A person with assets above the upper capital limit can be charged the full cost of their care in a care home.
  • A person with assets between the capital limits will pay what they can afford from their income, plus a means-tested contribution from their countable assets.
  • A person with assets below the lower capital limit will only pay what they can afford from their income.

Local authorities have flexibility and discretion within this framework.

A person’s means is made up of income and capital. 

Charging under the Care Act (section 17)

Where a local authority assesses a person as having eligible needs that it has a duty to meet, it must assess the level and amount of the person’s financial resources, if any, that the person would be likely to pay towards the costs of meeting those needs.

Where a local authority has decided to charge a person, it must carry out a financial assessment of what the person can afford to pay.  Once complete, it must give a written record of the assessment to that person. This should explain how the assessment has been carried out, what the charge will be, how often it will be made, and if there is any fluctuation in charges, the reason. The only exception is where a light touch assessment is permissible. The local authority should ensure that it is provided in a manner that the person can easily understand, in line with its duties to provide information and advice.

If the person refuses a financial assessment or the local authority has been unable to carry out a full financial assessment because of the person’s refusal to co-operate with the assessment, the local authority can treat the case as if they have already carried out a financial assessment. However, they can only do this if they are satisfied that the adult’s financial resources exceed the financial limit.

Light touch assessment under the Care Act

The local authority is to be treated as having carried out a financial assessment, if:

  • with the consent of the adult, the authority has not carried out a financial assessment; and
  • the authority is satisfied from the evidence available to it that the adult’s financial resources do exceed the financial limit.

Mental Capacity Act 2005

The Mental Capacity Act 2005 (MCA) is a significant piece of legislation affecting people who may lack capacity to make their own decisions.  It provides a framework for health and social care professionals to promote and empower people and to protect people, when necessary.

It is essential very early on in the person’s journey through assessment, eligibility, care planning and charging that the issue of capacity is considered.  Identifying who is going to be given the advice, and who is the decision maker is crucial. If this is not done, and if the individual lacks capacity in relation to the management of their finances, any decisions are likely to be unlawful, unless proper steps are taken under the MCA to obtain authority.  Often people are financially assessed based on their relatives’ financial disclosure about them and actions that they take to find financial information. 

Who is responsible for assessing capacity regarding finance under the MCA?

Before providing financial information or advice directly to the person, the local authority should establish whether the person has capacity regarding their finances. If there is doubt about a person’s capacity to make financial decisions, the local authority should take steps to assess the person’s capacity. The local authority can choose who assesses capacity for this decision, but it is likely to be a social worker. 

Where a person lacks capacity, they may still be assessed as being able to contribute towards the cost of their care. A local authority, however, must put in place solid policies regarding how they communicate, how they carry out financial assessments and how they collect any debts that take into consideration the capacity of the person. The local authority should always seek to establish who has legal authority to make financial decisions and engage with that person.

8.19 of the Care and Support Guidance states that:

“people who lack capacity to give consent to a financial assessment and who do not have any of the above people with authority to be involved in their affairs, may require the appointment of a property and affairs deputyship. Family members can apply for this to the Court of Protection or the local authority can apply if there is no family involved in the care of the person. While this takes some weeks, it then enables the person appointed to access information about bank accounts and financial affairs. A person with dementia for example should not be ‘forced’ to undertake a financial assessment, to sign documents they can no longer understand and should not be punished for any incomplete information that is elicited from them.’’

A light touch assessment can be relied on, but this is not possible for a person lacking capacity.

Debt due to Mental Incapacity under the MCA

Debt is frequently accrued by those lacking mental capacity. 

The better the local authority social worker’s understanding and application of the MCA:

  • The easier it will be to prevent debt.
  • The clearer lawful financial decision making will be (i.e., from Lasting Power of Attorney or Deputy).
  • The easier it will be for the local authority to identify and consider when they should apply for deputyship due to conflict of interest, rather than sending out threatening letters demanding payment. 

There is a statutory complaints procedure under The Local Authority Social Services and NHS Complaints (England) Regulations 2009 for families in this situation. This is the most common route.  Alternative routes include judicial review with legal aid. 

The Findings

The key findings from the complaint are as follows:

  • The MCA is clear - councils must carry out mental capacity assessments where a person's lack of capacity is in doubt.
  • A light touch assessment cannot be relied upon for a person who lacks capacity around managing their finances.
  • Key information must be sought from the person or someone with legal power.
  • If the person lacks capacity and there is no one with legal power to make financial decisions, the Council must apply to the Court of Protection for a Deputy.
  • Unless a sound assessment is undertaken the Council is unable to make a safe decision.

The Outcome

The outcome of the complaint is as follows:

  • The Council failed to assess Mrs Z's mental capacity on multiple occasions. The Council was at fault.
  • The Council used light touch financial assessments, which they were not able to do without key documents and continued to charge Mrs Z when they were not entitled to.
  • A failure to assess capacity meant the opportunity for a Court of Protection Deputy was lost.
  • The Council did not make a safe decision due to uncertainty about Mrs Z's finances.
  • On the balance of probabilities, the Council's records regarding Mrs Z's finances were unreliable and they should not have requested the sum of £21,987.06 from Mrs Z's estate.


The MCA is a significant piece of legislation affecting people who may lack the capacity to make their own decisions.  It promotes autonomy and empowerment of individuals, but also protects them if they are unable to make their own decisions.

Understanding the balance between promotion of autonomy and when to protect is often difficult as can be seen in this complaint. Health and social care professionals should ensure that they maintain a robust understanding of the legal literacy around the MCA and are able to integrate the law and process into their everyday practice.

Author: Sue Inker

This article was first published on 12 December 2023

Please leave a comment

  • Susan Greening - Clinical Practice Educator MCA

    14 Dec 2023 08:57

    It is unbelievable that we are still failing with regards to carrying out capacity assessments and recognising a person's needs. As a trainer in this field I an still banging the drum regarding this even in relation to accommodation for care and treatment in healthcare settings.

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