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Mental Capacity Act: Small Payments Scheme

View profile for Lucy Allen
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Proposals for third party access to limited funds belonging to individuals who lack mental capacity:

The Ministry of Justice has launched a consultation, proposing to allow third party access to funds belonging to individuals who lack mental capacity, without the need for a Lasting Power of Attorney or Court of Protection order. The aim of the proposals is to make it easier for family, friends, and carers of vulnerable people to access funds on their behalf, to help them to improve their quality of life.

The Mental Capacity Act 2005 (MCA) enables individuals who have capacity to plan for the future by making a Lasting Power of Attorney (LPA). An LPA allows individuals to appoint one or more persons to make decisions relating to property and affairs or health and welfare on their behalf if they lack capacity to make such decisions in the future. In cases where an individual has lost capacity without making an LPA, an application can be made to the Court of Protection for the appointment of a deputy to make decisions relating to property and affairs or health and welfare on their behalf.

Since coming into force the MCA has been a vital piece of legislation, protecting vulnerable individuals and supporting families to prepare for the future. However, the reason for the consultation follows concerns over the Court of Protection process for obtaining a deputyship order, more specifically in relation to the length and complexity of the application forms and the time the Court takes to issue the final orders, which is 10-12 months at present.  

The proposed new process could see limited funds being accessed by third parties, without the need for an LPA or application to the Court of Protection. Payments would be permitted for a fixed period of 6 months from one account up to the value of £2,500, with a single extension permitted only if the full allocation of funds has not yet been requested. The scheme would be run by banks and building societies, allowing payments or withdrawals to be made primarily from cash-based accounts by someone who can prove their suitability; this is not restricted to family members.

The new scheme is intended to be simple and more efficient but contains adequate safeguards to ensure that vulnerable people are protected. The proposals are not intended to replace the recognised legal authority provided by an LPA or Deputyship Order, rather it would be an interim measure whilst waiting on long term arrangements.

An overview of the proposals:

  • Payments or withdrawals would be permitted for a six-month period from one account.
  • Payments or withdrawals would be allowed up to the total value of £2,500.
  • A single extension for a further six months would be permitted only if the value of £2,500 has not already been withdrawn from the account.
  • Applicants would need to prove their suitability to access the funds on behalf of the individual lacking capacity. Applicants do not have to be family members of the person lacking capacity.
  • Once the limit of £2,500 has been reached no further withdrawals would be permitted from the account.
  • The same account or other accounts belonging to the individual lacking capacity could not be accessed a further time by the same or different applicant.
  • The scheme would be controlled by financial services such as banks and building societies.
  • In cases where longer term maintenance is required, family members and guardians would be encouraged to consider an application to the Court of Protection for a Deputyship.

Link to the consultation document:

For more, please do get in touch with our Court of Protection Team on 01562 820181 or by emailing the team below.



Lucy Allen