Looking after someone else's finances

If someone you care for has mental health problems, it can be easy for them to fall into debt for many reasons.

• They may not be able to cope with bills or paperwork.
• They may not be able to control their spending.
• They could risk eviction if they don’t pay their rent/mortgage or miss out on income by not claiming any benefits they may be entitled to.
• They may be vulnerable to exploitation from other people.

We understand that someone you care for might not be a member of your family, however we have referred to the person you are caring for as ‘your relative’ and to you as ‘their carer’.

How can I help?

If your relative loses the ability to make decisions about their financial affairs and you, as their carer, are going to deal with their affairs for them, it is important to ensure their priority payments continue to be made.

Information about priority and non-priority debts can be found in the How to deal with debt section 

If your relative can afford all their priority payments and also has enough money left to pay non-priorities then they should also be paid.

However, if it appears your relative will not have enough money, perhaps because their income has reduced due to leaving work and moving onto a benefit income, or their benefits may have been reduced if they have been in Hospital, then it is possible to try and negotiate with the non-priority creditors. See What are my options for dealing with my debt I can't pay? for more information.

Can I act on my relative's behalf?

There are several ways you can formally arrange to act on your relatives behalf or take over certain responsibilites they feel unable to cope with which are detailed below.

The Court of Protection may allow you to become a Deputy or get a Lasting Power of Attorny, see Becoming a Deputy through the Court of Protection

Third Party Mandate

If your relative is worried that they will be unable to get access to funds in their bank account, perhaps because they are worried about going into hospital or sometimes their mental illness means they may not be able to leave their home, they can give you authorisation to have access to their bank account.

They would have to sign a third party mandate and give this to their bank. This mandate is a formal instruction to the bank to allow someone else to access the account.

Appointeeship

If your relative is finding it difficult to deal with the benefits system, you may be able to claim their benefits on their behalf. This is called being an ‘appointee’.

If you want to become an appointee you need to notify your relative’s local Department of Work and Pensions (DWP) office and fill in form BF56. The DWP may say they have to visit you and your relative to decide whether to make you an appointee. 

You can also contact the local authority with regard to housing benefit and/or council tax benefit claims. If the local authority has made you an appointee, you should be able to provide evidence of this to the DWP so they can also make you an appointee for other benefits, and vice versa.

You can also claim tax credits for your relative.  There is a specific section on the tax credit application form which asks you to explain why your relative can’t complete and sign the form.

Once you have become an appointee it is your job to:

• Find out about any benefits your relative may be entitled to.
• Make a claim for those benefits by filling out all the appropriate application forms as if you were your relative (including housing benefit, disability living allowance, income support, tax credits, and child benefit).
• Receive the money in your own name, but you must use it in the best interests of your relative.
• You must notify the DWP/ Her Majesty’s Revenue & Customs(HMRC) of any changes of circumstances and co-operate with the DWP/HMRC at all times.
• If a benefit or tax credit is overpaid you must also ensure it is paid back.

Sometimes people suffering from a mental illness are very wary of people coming to visit them. They may refuse to co-operate or they may not think they have a mental health problem and therefore do not think that claiming benefits is necessary.

This can often cause problems if the DWP insist on visiting both you and your relative before making a decision.

It may help if you have written evidence from your relative’s doctor, psychiatrist or community mental health worker.

If you have any problems trying to become your relative’s appointee you can complain to the DWP. You could also contact the Rethink's Advice and Information Service on 0300 5000 927 for further advice.