The ‘incapacity crisis’ – how can you prepare?
Earlier this month the organisation Solicitors for the Elderly (SFE) published a report warning of the upcoming ‘incapacity crisis’ in the UK. This ‘crisis’ is caused by the gap between the rising number of people facing incapacity compared with the number of people who are planning ahead for such an occurrence.
The SFE focuses on dementia, which is now the primary cause when it comes to the loss of capacity. However, it is important to remember that there are many other conditions that can lead to a loss of capacity whether that be a temporary or permanent loss.
The SFE report shows that the number of people diagnosed with dementia in the UK has increased by just over 50% since 2005/6 and now stands at around 540,000 people; this does not include those who are undiagnosed or are waiting on a diagnosis. It is estimated, that when you include those who are undiagnosed, that the number of dementia sufferers actually stands at around 850,000 people, and this is set to rapidly increase to 1.3 million by 2025.
One in 14 people over the age of 65 are predicted to develop dementia, and with 12.8 million people currently in this bracket this forecast will increase to 15.4 million by 2025, it is clear that there is an upward trend when it comes to dementia.
These numbers are in stark contrast to the number of people who are putting in place a Health and Welfare Lasting Power of Attorney (H&W LPA), and it is this contrast that is accountable for the so called ‘incapacity crisis’. The Centre for Future Studies (CFS) has conducted research which has found that there are currently only 928,000 H&W LPAs registered with the Office of the Public Guardian. This suggests that there are almost 12 million people at risk of future incapacity who haven’t planned ahead for their future care needs.
But what is a H&W LPA and how can it help me?
Most people will already be aware of Property and Financial Affairs (P&F) LPAs, but in a typically British fashion we are still not talking about our wishes for personal medical care and end of life treatment.
A LPA is a legal document which allows you (the donor) to choose one or more individuals (your attorneys) who are usually members of your family or close friends, to handle your affairs and make decisions on your behalf in the event that you are no longer able to yourself. You will need to execute a LPA whilst you still have the mental capacity to do so, but a H&W LPA will only come into effect once you have lost capacity.
A H&W LPA enables your attorneys to make decisions regarding your personal healthcare and welfare. This includes decisions about medical treatment, where you should live, the activities you engage in and the type of care you receive. You must also choose whether you want your attorney to be able to make decisions regarding the refusal of life sustaining treatment. You can include preferences within the LPA which will act as guidance for your attorneys. Preferences can include the type of care home you would like to be resident in and what your diet should be.
Having a H&W LPA in place will help ensure that your wishes are carried out by the people that you trust. They can also assist your nearest and dearest in making decisions at an emotionally difficult time as you will have provided guidance to them on decisions that are important to you.
We would recommend that in all cases you execute both a H&W and a P&F LPA to ensure that not only your health care needs are catered for, but to ensure that someone is able to look after your financial affairs. If you require long term care it is important that your finances are being managed in a way that will help ensure they continue to meet the associated costs.
What happens if I lose capacity and have not made a LPA?
Property and financial affairs
If an illness or injury affects your ability to make decisions for yourself in relation to your property and affairs and you do not have a LPA in place, it may no longer be possible to make a LPA. When this situation arises, your loved ones may find it difficult to access your finances to ensure your needs are met. You may require assistance with managing your bank accounts, paying bills and dealing with your property, which cannot be carried out without a nominated person or organisation having the relevant authority to do so.
If your income is limited to benefits and/or state pension, an appointeeship may be an appropriate mechanism for a family member or friend to manage your money. Appointees have very narrow powers, limited to managing money from the Department of Work and Pensions (DWP) and to dealing with the DWP on your behalf.
However, the majority of people receive additional income from other sources, such as an occupational pension, income from investments, money from a Trust or direct payments. In these cases, the only legal way another person can make decisions on your behalf in relation to your property and affairs is by applying to the Court of Protection for Deputyship.
The powers conferred by a LPA and a Deputyship are very similar, and share the same guiding principle that any decisions made on a person’s behalf must be made in their best interests. The main differences between the two are:
- Cost: a Deputyship is more expensive than a LPA, with a £385 application fee and £320 annual supervision fee (or £35 where Deputies are managing less than £21,000). LPAs cost £82 each to register and there are no ongoing expenses.
- Time: the Deputyship application process can take up to 6 months, whereas a LPA can be registered within 8-10 weeks.
- Scrutiny: a Deputyship is much more heavily scrutinised than a LPA. For example, a Deputy is required to report to the Office of the Public Guardian (the supervisory body for Deputyships) on an annual basis to show exactly what has been spent during the year. There is no such obligation on Attorneys, which potentially makes LPAs more open to financial abuse.
- Protection: Deputies are required to take out an insurance policy (known as a ‘security bond’) each year, which protects the incapacitated person’s assets should they be mismanaged, whereas Attorneys are not.
Health and welfare
The situation is very different if you lose capacity without having made a H&W LPA. While Deputyships for P&F are very common, Deputyships for H&W are comparatively rare. The Court of Protection is reluctant to grant them and will only make exception in the most difficult cases, for example where there is a history of disputes within the family, there is high risk of abuse, or a need for someone to make a series of linked welfare decisions over time.
This is because decision-making in relation to personal welfare matters is essentially a collaborative process between family members, healthcare professionals, care staff, social workers and anyone else concerned with a person’s care. It does not therefore follow that there should be one individual who is given special legal status to make welfare decisions, in the absence of specific instruction from you that they should be (by a LPA). Where agreement between the relevant parties cannot be reached, the Court of Protection prefers to deal with the specific issue by way of a personal welfare application.
If you feel very strongly about empowering a certain trusted individual to make decisions about your welfare, a H&W LPA is the best way to achieve this. A H&W Attorney will not be the only person able to make decisions in relation to your personal welfare; in practice day-to-day welfare decisions will be undertaken by your primary care team without the need to consult or get permission from your Attorney (section 5 of the Mental Capacity Act protects people providing care so that they may look after you without fear of liability). However, where there is disagreement about any element of your care or treatment, a H&W Attorney’s opinion will carry much more weight than someone without this authority.
How can I prepare for the ‘incapacity crisis’?
At Coffin Mew we have experts who can discuss and advise you on your particular needs and circumstances; whether that is in relation to putting in place a LPA or assisting you with a Deputyship application on behalf of a loved one.
If you would like to know more, please contact a member of our team.