Supporting Young People with Money Management

Some young people are able to manage their own finances and bank accounts with minimal support.  However for some, a level of support is needed from the Service to develop money management skills.

If a young person has difficulties with money management and a Best Interest decision has been made around a young person’s finances (please see Mental Capacity Act, Making a Best Interest Decision), there are a few options that can be looked at with the placing authority to support finances.

These options may be:

1. The local authority/young person’s social worker could  provide a weekly allowance to the Service to administer to the young person and to pay for the support they receive;
2. A Property and Financial Affairs Deputy. This  is a person or organisation appointed by the Court of Protection for managing money; claiming benefits; managing bank accounts and utilities; managing debt, tenancies and property;
   See also Deputies: Make Decisions for Someone Who Lacks Capacity (gov.uk).
3. An Appointee could be used. This could be a family member, previous foster carer etc. who is appointed by the Department for Work and Pensions (DWP) to be responsible for making and maintaining any benefit claims on behalf of a young person who lacks capacity.  

The Appointee role involves:

1. Claiming all DWP benefits that the young person may be entitled to;
2. Collecting all benefits into a bank account;
3. Reporting changes in circumstances; and
4. Managing and spending benefits in the Best Interests of a young person.

The Appointee could then provide money to the Service and/or the young person.

For Further details please see DWP information around Appointeeship.

Planning for When a Young Person turns 18

When a young person turns 18, they may be entitled to various welfare benefits and the social worker/personal assistant should look with the Service at who is going to support the young person with claiming these benefits and how their money should be managed. This should be considered well before the young person turns 18.

If a young person does not have capacity or there are safeguarding issues, a number of options can be used.

1. Corporate Appointeeship - Organisations can become the designated Appointee to a young person who is unable to manage their own finances. Corporate Appointees are local authorities, firms of solicitors or other advocate organisations such as Money Carers Foundation that provide an Appointeeship service when a family member or friend is unavailable or unsuitable.  All Corporate Appointees need to be approved by the Department for Work and Pensions;  
2. A Property and Financial Affairs Deputy.

All financial arrangements and agreements should be recorded in the Care Plan and monitored by the Service and the social worker/Personal Assistant.

If the young person has the capacity to make decisions about finances, they can decide where they would like to keep their cash and any bank cards. Any potential risk of theft from others should be explained to them, so that they can consider this as part of their decision-making process.

If a young person lacks the capacity to decide where to store their cash, and there is no way of storing it securely in their room, it would normally be in their best interests to keep it in a closed cupboard, preferably one that can lock.

If possible, the young person should be discouraged from storing large quantities of money at the accommodation as this increases the risk of abuse and/or financial anomalies.

If the young person has the mental capacity to make decisions about how to spend their money, they must always be permitted and supported to do so. They may need staff support with shopping, paying bills and budgeting or to access online banking facilities.

If the person lacks the capacity to make spending decisions, these must be made in their best interests by applying the principles of the Mental Capacity Act 2005 (see Mental Capacity Act). The young person’s social worker should be consulted on any decisions regarding finances particularly if it is not everyday funding such as a holiday, purchasing a large item etc.

Note: An Appointee cannot decide about how to spend monies. Their role is limited to receiving benefits and ensuring the young person’s financial obligations are met.

If the young person has the mental capacity to manage their finances and has their own bank account, staff may need to support them to liaise with the bank and any utility providers to make payments or set up a direct debit/standing order.

If the person lacks the capacity to make financial decisions, an Appointee, or Deputy (when over the age of 18) can make arrangements to pay any bills from the young person’s account.

Money in the Young Person's Accommodation

If the young person has the capacity to make financial decisions, there does not need to be a record kept of their spending, unless they ask staff to do so or there are safeguarding concerns around the young person.

If the young person lacks the capacity to manage their finances, all purchases made with staff support must be recorded. If receipts are available, and the young person does not need to keep them they should be attached to records.

The record should include a starting balance (which should reflect the end balance of the previous record), details of the incoming or outgoing money and an end balance.

Staff should sign and date each record.

Monitoring of financial records for anomalies should form part of the registered person’s quality assurance and monitoring processes.

Money in the Service’s Account

If the Service receives money from an outside source via a bank transfer, there should be a method of identifying which money belongs to which young person. For example, the use of a reference number only identifiable by the Service. The young person’s name should not be used as a reference number.

All money that enters and leaves the account must be recorded at the time that the movement occurs.

Cross referencing of statement information against records should form part of the registered person’s quality assurance and monitoring processes.

All financial irregularities should be reported to the registered person at the time they are noticed.

Recording processes should be sufficiently robust to allow a back-tracking of records in order to identify at which point the anomaly occurred, and what the potential reason for it was.

Unexplained financial discrepancies may warrant a safeguarding concern being raised.

Substantiated cases of dishonesty, theft or fraud are gross misconduct and staff involved can be dismissed and/or face possible criminal proceedings.

The young person should be encouraged and supported to store all bank statements, benefits letters or other financial documents securely in their property/home.