By Belinda Schwehr
It’s a common problem these days that people who either have their own direct payment (or hold one, as an authorised person, for a person lacking capacity to request one) are building up an underspend, through not being able to find the staff to meet the assessed need.
In some cases, of course, it will be because the holder or owner of the DP will have an entrenched view about the quality of worker they want to find; and the rate will not be enough to cover the market rate for such a worker, but the DP holder is willing to compromise on the number of hours they were supposed to be being funded for, if they can only find the right worker.
That’s a choice that they can probably take, without offending against any principle of the Care Act that would be held over them. If they take that choice, then they must take responsibility for it.
Many others, however, will have taken a rate from the council that was not even feasibly, conceivably enough to pay the going rate for staff who are even half-way competent, whether the needs were basic or more complex in character.
They won’t necessarily know that they should have challenged the council about the sufficiency of the rate being awarded within the DP. The Court of Appeal decision in the Davey case may have deterred them further, in so far as it suggests that if the going rate is the minimum wage, that’s the rate that the DP needs to calculated against (allowing for all other legally required on-costs of course).
It is a fundamental tenet of the Care Act that the personal budget must be rationally sufficient to meet the assessed eligible needs. There will always be evidence about the going rate for care (for employees or from an agency selling to an individual purchaser) from local papers or a quick survey of the market. So a client’s putting up with an indefensible rate when it’s not lawful, is a choice too, albeit maybe an inadvertent one.
Lack of available staff
In yet other cases, there will be still be situations where there are literally no staff available – and the problem is not merely one of the rate to be paid but also extends to a skills and experience void. Whilst that is a breach of the market-shaping duties of the council in question under section 5 of the Care Act too, what’s worrying me is what is happening in the meantime to the care needs of the eligible client, and with regard to the status of the underspend.
It’s common for a council to allow a person with fluctuating needs, or a reasonable explanation for an underspend, to hold on to a month’s worth of money, because of contractual obligations to staff and out of respect for contingencies and the notion of flexibility – the ‘saving up the budget’ approach to person-centredness in care planning.
However, if the underspend is large, in very difficult times, one can envisage two things happening: a reclaim of the whole lot, on the basis that all the council needs to do is to ask for the money back; or the assumption, on review, that the budget was ‘not actually needed’ and therefore should not be repeated for the following care planning period.
In the cases that are coming my way at the moment, what I am seeing is that it is ageing parents who are actually doing the care, for free, even though they are going well beyond ordinary love and affection and doing the equivalent of paid care work. One couple, for instance, with a daughter needing two to one care, does 100 hours a week between them, unpaid.
The council in question there, on review, quite fancied checklisting the client to project the daughter over the continuing healthcare eligibility line, at the same time as wanting the underspend to be paid back on the basis that it clearly hadn’t been ‘needed’.
After a bit of exploration, it turned out that the parents do not live in the same household as the client, and the agency which one parent, as authorised person, had engaged as the service provider, was independently willing to employ both parents, retrospectively, to use up a good deal of the underspend.
Paying a relative through a direct payment
If one looks at the Care Act direct payment regulations, one finds that there is no rule against a parent not living in the same household, being paid to do the care. There is a presumption against any spouse or cohabitee or other specified close relative living in the same household, including a parent, doing the care, but even then, a discretion may be exercised to permit it, if it is necessary.
The rules in the NHS
When the regulations on direct payments in the NHS were issued in 2013, there were, at first, no rules about close relatives doing the work at all, and being paid out of the budget, but this was by mistake.
The regulations were then amended in the same year to say that a health body may only permit an individual living in the same household as the patient, a family member or friend being paid out of the budget, if this was necessary. However, this was interpreted by some clinical commissioning groups as placing a restriction on paying family members or friends who were not living in the same household as the patient, contrary to the government’s intention.
So the regulations were amended again in 2017 to ban paying a connected person to meet the needs, unless it was necessary. However, a presumptively banned connected person is defined only as one who is living in the same household, meaning that if a person is not living in the same household, it does not matter that they are close relatives, or even spouses.
The guidance on direct payments in healthcare, dated 2014, reflects the position prior to the 2017 amendment to the regulations and implies that living in the same household is not the determinative key part of the test for the prohibition (see paragraph 153 of the guidance). But the explanatory memorandum to the 2017 amendment strongly suggests that the 2014 guidance requires urgent amendment as well.
Public law principles require a council refusing permission to a person to spend the DP on a prohibited person, to state its reasons, and to make sure that they are rational reasons, after taking all relevant considerations into account.
To my mind, if a council’s award of a budget has been set on the basis of the formula in the Supreme Court’s judgment in R(KM) v Cambridgeshire  – a rational nexus between the eligible needs and RAS points, between the points and the pounds allocated to the points, and as between the pounds and the actual going rate for that type of care in the rough amount in which it is going to be needed – then it’s not feasibly defensible to refuse permission to the relative to meet the needs, if the evidence is cogent that staff cannot be found for the amount being paid.
I would be asking, rhetorically, as follows: how could any human rights public authority, in making that decision, suggest that it promotes the wellbeing of the client, for it to refuse permission? All the more so, it seems to me, if it has not secured the means, itself, to commission for sustainability, diversity and quality, as per the section 5 Care Act commissioning and market shaping duties, and where it cannot seem to stimulate the local market for DP purchasers, either.
Why are there rules against spending the money on relatives?
It is thought that the rules are most likely based on the public policy that there’s no need to pay relatives for that which they would willingly do for free, out of ordinary love and affection.
The point here though is that no relative’s willing and capable informal care can be assumed 24 hours a day; people have to take difficult economic decisions in this day and age, and a carer’s interest in working is a statutory part of any carer’s assessment.
Where the person who wants to do the caring is the authorised person, I can well see that if that person sought to employ themselves, pretty much any council would choke on the absence of accountability involved in such a set-up: the employer/employee would be disciplining him or herself; awarding themselves a salary hike, and eventually making themselves redundant! One can well see that HM Revenue and Customs would struggle with the concept too, being obsessed currently, it seems, with the idea that it’s virtually impossible ever to be a self-employed PA, let alone a PAYE employee employed by oneself.
So I can see that a council would want to find someone else to be the employer in that situation and make a special condition to that effect, that would probably be upheld if it were challenged.
However, there is another legal possibility which might meet the concern, in my view.
Ways around the presumption against employment of relatives
The person in question could take up a role as a formal regulated care worker for an agency, and the same person could still commission the service through the mechanism of a contract with that agency, and thus not directly employ anyone, in person.
Agencies that will readily do that (eg HCD, Solo etc) are often called the third party option, in NHS England speak but all such agencies have to be regulated by the Care Quality Commission. This is because they are the provider of the service, employing staff to discharge the obligation; they have no option but to be registered, even if they offer other services such as managing the budget, or managing the payroll for other directly employed staff of the DP holder.
Most agencies in that situation would require the DP holder to ask permission first of the council, it is felt, if the relative who wanted to be paid was a spouse or cohabitee or a relative on the social care regulations prohibited list who was living in the same household. And as a person who believes that it is no bad thing to check such things out first, I could not disagree with that course of action.
What does not have to be sought, however, is the permission of the funder, if the relative in question does not live in the same household, in either an NHS or a social care situation (in the latter case, that is, if the relative is not a spouse or cohabitee). The contract for the service in that situation is between the holder of the DP and the agency, and nothing to do with the council at all. If it were to be discussed by the agency with the council, that could be a breach of confidentiality with regard to the client’s and the DP holder’s affairs, to my mind.
Of course it may be said that regulation 4 of the Care Act direct payment regulations allows a council a free hand in forbidding a DP client or holder from employing anyone they think is unsuitable – the wording is that ‘conditions may, in particular, require that the needs may not be met by a particular person’, after all. But if a relative has been forced into doing the care, unpaid, and now wishes to be employed, it seems to me that no reasonable council could possibly expect to be upheld in the imposition of that sort of condition, having taken the benefit of the free care.
The agency solution imposes governance, quality standards, a DBS check and ongoing training obligations onto whichever agency is chosen, which would seem to meet the concern about one person’s wearing of too many hats.
I believe that given the corporate veil doctrine, civil lawyers would say that that sort of a structure avoids the mischief sought to be prevented by the rule against use of the money on a relative for providing the care and support service, within the council DP regulations. Public lawyers might suggest it’s arguable that the rule is still thereby offended, however, and that a council terminating a direct payment being used in that manner would not be challengeable. I can’t find a case dealing with that question, as yet.
Giving up the role of authorised person in favour of taking up employment
In a case where permission to be paid for care to an incapacitated person has been given by the council, despite the presumption, or in a case where the presumption is not actually applicable but the proposed employee is already the authorised person, another solution is that the authorised person gives up that role and is employed by a new authorised person.
Giving up the role would be by their choice if they were an appointed deputy, or by dint of force, if the council would otherwise withdraw the direct payment. The authorised person role could pass to an alternative candidate who is acceptable to the council and to anyone else whose views must be considered under the rules.
The hierarchy, set out in section 32 of the Care Act, as to ‘dibs’ on the role of authorised person is as follows:
“(4) A person is authorised for the purposes of this section if—
(a) the person is authorised under the Mental Capacity Act 2005 to make decisions about the adult’s needs for care and support, [ie a deputy or holder of a power of attorney of either kind, it is thought]
(b) where the person is not authorised as mentioned in paragraph (a), a person who is so authorised agrees with the local authority that the person is a suitable person to whom to make direct payments, or
(c) where the person is not authorised as mentioned in paragraph (a) and there is no person who is so authorised, the local authority considers that the person is a suitable person to whom to make direct payments.”
It seems to me that if a parent is a deputy, they cannot simply be de-appointed from being an authorised person, as such.
They are an authorised person under the above rule. I do not think that a council would seek removal of that person’s status as deputy, when the person was actually taking up employment to meet the person’s needs that would otherwise go unmet.
All an objecting council could do in that case would be to withdraw the direct payment, to meet its concern for the prudent management of public money, and that would be likely to be unreasonable, in public law terms. So there could be an impasse if there was indeed a pressing need for the care to be done by the relative, and no other prohibition standing in the way of that course. The agency route for employing the relative at least offers an alternative to a dispute, it is suggested, in terms of promoting the impact on the person’s wellbeing.
Checks required when the authorised person is not a family member or friend
According to the Care Act direct payment regulations, in a case where the authorised person is a body corporate or an unincorporated body of persons, an enhanced criminal record check must be obtained in respect of whichever individual who will, on behalf of that body, have overall responsibility for the day-to-day management of the adult’s direct payments. If an authorised person is a friend of the service user involved in that service user’s adult’s care or one of the family members of the service user listed in regulation 3(3), then no such check on that person before they take on that authorised person role is required.
In terms of the person chosen to provide the care and support, there are rules about checks on them when the person choosing the worker is an authorised person who is not friends or family.
Under regulations 3(4)(b) and (5), if the role of authorised person is taken on by an unincorporated body, such as a circle of support, or a corporate body, or a person who is not one of the prohibited categories of people prevented from doing the actual work in regulation 3(3), or is not a friend of the adult who is involved in the provision of care for the adult, that person or entity is obliged to do criminal record checks on anyone it employs, just like an agency.
An authorised person who is a family member listed in regulation 3(3) or a friend of the service user who is involved in the provision of care, does not have to obtain a certificate for anyone he or she employs to do the actual care.
Belinda Schwehr, Care and Health Law
Tel: 01252 725890