Are you a care home provider? Covid and a loss of capacity of a resident can impact on your business
A care home provider’s regular flow of income inevitably comes from residents paying their fees on time. Care home providers have been, and will continue to be, affected by residents losing the capacity to authorise payments and by them not having the appropriate lasting power of attorney (LPA) in place to enable someone to arrange payment on their behalf.
Over the past year, Covid has also been an extremely challenging time for care home providers. Restrictions have meant that residents have had to stay indoors and family members have not been able to visit their loved ones until recently. As a result, we have seen care home providers struggle with their cash flow due to residents not having put in place a LPA for property and financial affairs.
The ability to collect in residential fees promptly is essential for many care homes to remain open, not least during difficult times such as the Covid pandemic. By a resident having a LPA, this facilitates payment. It is essential that care homes ensure provision is made for payment of fees as the effect of late payments can impact heavily on the day-to-day running of the business.
As a matter of course, a care home provider will assess the mental capacity of its residents and will discuss how payments are to be made. However, it should also be established whether the resident will retain responsibility for his or her own financial affairs or whether he or she would like to appoint someone else (known as an “attorney”) to act on his or her behalf via a LPA should he or she lose capacity in the future to deal with property and financial matters. The resident can also give consent for the LPA to be used before a loss of capacity if he or she wishes. Using the LPA with his or her consent can assist in circumstances where Covid restrictions continue to be in place. The attorney could be a trusted family member, friend, or a professional advisor. By a resident having a LPA in place, this will ease the burden on care home providers to pursue outstanding fees. Even if the resident is unable to arrange payment for whatever reason then, depending on the circumstances and the how the LPA has been drafted, the resident’s attorney can arrange payment. There are so many advantages for both the care home provider and the resident, for the resident to have a LPA in place.
Should a resident lose capacity without a LPA in place, someone will have to apply to the Court of Protection to become a deputy in order to ensure that the care provider’s fees are paid from the resident’s funds. An application to the Court of Protection can be a lengthy and expensive process. This can have a further huge impact on care home providers who need to ensure that wages, maintenance and other fees are paid in order for the business to run efficiently.
To avoid the potential difficulties that can arise if a resident loses capacity to deal with his or her own affairs, it is worthwhile for the care home to discuss LPAs from the outset with the resident and put a plan in place in case the resident needs someone to assist him or her.
Paul Collingwood is a senior associate in the specialist Wills, Trusts & Estates team at Sintons. To speak to Paul about this or any other matter, contact him on email@example.com or 0191 226 3713.