Section 16: Creation and exercise of welfare power of attorney

65. This section defines a welfare power of attorney, and describes how a valid welfare power of attorney is created. Currently the legal status of attorneys with powers over welfare matters is unclear. This section establishes the right to grant such a power, and establishes various safeguards.

66. Subsections (1) and (2) define a "welfare power of attorney" as referring to a power of attorney granted under this section. A welfare power of attorney confers the authority to make decisions about the personal welfare of the granter, and refers to the individual granted the powers as a "welfare attorney".

67. Subsection (3) and (4) stipulate conditions for a welfare power of attorney to be valid. The conditions for validity are the same as those set out in subsections (3) and (4) of section 15 apart from subsection (3)(b) which specifies that a welfare power of attorney is being made.

68. Subsection (5)(a) limits those who may be granted a welfare power of attorney. Only individuals can be appointed as welfare attorneys; this excludes the officers of statutory organisations, including local authorities.

69. Subsection (5)(b) provides that welfare powers of attorney can only be used to make decisions on the granter's behalf after they lose capacity to deal with the matters covered by the power.

70. Subsection (6) restricts the authority of welfare attorneys preventing a welfare attorney from consenting to the granter's admission to hospital to be treated for mental disorder against their will. Where detention is necessary, the granter can be detained under the provisions of the Mental Health (Scotland) Act 1984. It also prohibits a welfare attorney from consenting to any of the treatments excepted from the general authority to treat, as provided in section48.

71. Subsection (7) is necessary because powers of attorney generally terminate on the granter or attorney's bankruptcy. Under the Bankruptcy (Scotland) Act 1985, a trustee assumes control of the bankrupt's estate and their authority must supersede that of an attorney with financial powers. The authority of welfare attorneys need not be affected by the granter's bankruptcy. Nor need a welfare attorney who becomes bankrupt lose their powers.

72. Subsection (8) provides that a welfare attorney appointed under the law of another country to act for someone who lives in Scotland may not exercise their powers until the granter loses capacity. It also provides that no foreign welfare attorney may have the granter admitted to hospital in Scotland to be treated for mental disorder against their will, or consent to any of the treatments excepted from the general authority to treat, as provided in section48.

Section 17: Attorney not obliged to act in certain circumstances

73. There is no statutory duty for an attorney to use their powers, but this section specifically provides continuing or welfare attorneys with the power to omit actions that are included in their authority, if they consider them to be unreasonable, either on grounds of effort or expense, compared to the value of the action. This protects attorneys from carrying out duties that would be very onerous to them and would confer little benefit to the granter.

Section 18: Power of attorney not granted in accordance with this Act

74. This section provides that after commencement of the Act, a power of attorney that is a continuing or welfare power of attorney intended to have effect during the granter's incapacity must be a validly granted continuing or welfare power of attorney according to this Act. This ensures that powers that continue on the granter's incapacity can only be granted by opting into the provisions in the Act.

Section 19: Registration of continuing or welfare power of attorney

75. This section provides for a new statutory process under which continuing and welfare powers of attorney are to be recorded in public registers by the Public Guardian, so that information about the powers is openly available. Subsection (1) provides that continuing and welfare powers of attorney are only valid after registration.

76. Subsection (2) sets out the action required by the Public Guardian to register a continuing or welfare power of attorney. The Public Guardian must be sure that the nominated attorney is prepared to accept the appointment and will then enter the details of the granter and attorney in the public register.

77. Subsection (2)(b) provides for the Public Guardian to issue a certificate of registration, which the attorney may subsequently need to use to confirm that they are validly exercising their powers.

78. Subsection (2)(c) provides for the Public Guardian to inform the Mental Welfare Commission of every registered welfare power of attorney. This will allow monitoring of welfare attorneys by the Mental Welfare Commission.

79. Subsection (3) provides for so called "springing" powers of attorney. It allows documents conferring continuing or welfare powers of attorney to be sent to the Public Guardian, but registration to be postponed until after a specified event has occurred. This event could be the granter losing the capacity to manage his or her own affairs; however it could also be another trigger, such as moving out of their own home. It will be the Public Guardian's duty to check that the event has occurred before registering the continuing or welfare power of attorney, thus allowing the power to be exercised.

80. Subsection (4) establishes that a copy of the continuing or welfare power of attorney, validated by the Public Guardian, will have the authority recorded in it, as intended by the granter.

81. Subsection (5) places a duty on the Public Guardian to inform the granter, by sending a copy of the document, when the continuing or welfare power of attorney is registered. The document conferring power of attorney may also specify up to two individuals or officials that must also be sent a copy of the power of attorney when the Public Guardian registers it. This could be used to ensure that a relative, for example, or the local authority social work department, were aware that the granter now had a continuing or welfare attorney acting for them.

82. Subsection (6) allows appeals to the sheriff against the Public Guardian's decisions on whether an attorney accepts their appointment and on whether a springing event as at subsection (3) has occurred.

Section 20: Powers of sheriff

83. This section outlines the powers that sheriffs will have in relation to continuing and welfare attorneys.

84. Subsection (1) establishes the right to apply for an order from the sheriff. Anyone who claims an interest in the property, financial affairs or welfare of an adult who has granted a continuing or welfare power of attorney can apply. This provides a forum for interested parties to express their concerns about the attorney.

85. Subsection (2) limits the sheriff's power to intervene to cases where the granter has lost capacity and it is necessary to promote or safeguard the adult's interests. If a granter still has the capacity to supervise the attorney, it would be unnecessary to give the sheriff authority over that arrangement, as the granter can supervise their own affairs.

86. Subsections (2)(a), (b), (c) and (d) set out what orders the sheriff can make to safeguard the granter's interests. The sheriff may order a continuing attorney to be supervised by the Public Guardian, or a welfare attorney to be supervised by the local authority. The sheriff may order a continuing attorney to submit accounts for audit by the Public Guardian. These accounts may be requested for any period when the attorney has acted, even while the granter retained legal capacity, to allow an overall picture of the attorney's management of the granter's estate. The sheriff may also ask a welfare attorney for a report on the exercising of their powers.

87. Subsection (2)(e) gives the sheriff the right to make an order revoking any of the powers the attorney is allowed to exercise, or to terminate their appointment. The Act does not, however, allow the court to vary the attorney's powers, since this would run counter to the granter's original intention.

88. Subsection (3) provides for the communication of any order the sheriff has made to the Public Guardian. The Public Guardian will record the order in his register and notify those listed in subsection (3)(b).

89. Subsection (4) states that the decision of the sheriff to order Public Guardian or local authority supervision of an attorney or requiring accounts or reports from a welfare attorney or that such an order is not required, is final.

90. Subsection (5) provides for the court to make orders as in this section to apply to foreign, as well as Scottish, continuing and welfare attorneys. This provides safeguards for granters who live or are present in Scotland, but who have appointed an attorney under the law of another country.

Section 21: Records: attorneys

91. This section requires continuing and welfare attorneys to keep a record of their actions. A continuing attorney is not required to keep formal accounts, merely a record of transactions that could be used to draw up accounts should a court require them. The code of practice for attorneys will contain general information about record-keeping for both continuing and welfare attorneys.

Section 22: Notification to Public Guardian

92. This section provides for the updating of the Public Guardian's registers and notification of statutory bodies and, in particular circumstances, of the granter of the power of attorney when an address recorded in the registers is changed, or the power of attorney comes to an end for any reason. In the circumstances set out in subsection (1), it is the attorney's duty to notify the Public Guardian, and in subsection (2), where the attorney has died, it is the duty of their representative to notify the Public Guardian, if they are aware of the power of attorney.

93. When the Public Guardian is notified under subsection (1) or (2) of a change to the power of attorney registered, he will update his registers and inform the local authority and, in particular circumstances, the Mental Welfare Commission of the changes, allowing them to update their records. When it is an event the granter could be ignorant of, the Public Guardian will also notify them of the new details or the coming to an end of the power of attorney.

Section 23: Resignation of continuing or welfare attorney

94. This section provides that once a continuing or welfare power of attorney has been registered by the Public Guardian, according to section 19, the attorney must give notice of their intention to resign, in order to safeguard against any lapse in administering the granter's affairs.

95. Subsection (1) lists those who must be notified. This ensures that the granter, and key people looking after them are aware of the impending change. If necessary, a guardianship application could then be made. Notification also ensures that the Public Guardian can maintain the register of continuing and welfare attorneys accurately.

96. Subsection (2) provides that an attorney's resignation becomes effective 28 days after the Public Guardian receives written notice as above, unless the attorney was a joint attorney, or a substitute attorney was also appointed, in which case subsection (4) may apply. When the attorney's resignation is effective, the Public Guardian will record this in the register.

97. Subsection (4) waives the need to wait 28 days for the resignation of an attorney to be effective, where the Public Guardian has received notice that a remaining joint attorney, or substitute attorney is prepared to act. The resignation would then be effective from the date the Public Guardian receives such notice.

Section 24: Termination of continuing or welfare power of attorney

98. Subsection (1) provides that, where the granter and attorney are married, the appointment as attorney will be automatically revoked on a decree of separation, divorce or declarator of nullity, unless the power of attorney states otherwise.

99. Subsection (2) establishes that where a guardian is appointed to deal with the same matters as a continuing or welfare attorney, the authority of the guardian shall supersede that of the attorney, whose appointment in that area is effectively terminated. The Public Guardian will be aware of this through notification of the appointment of the guardian, and will be able to amend the relevant register.

100. Subsection (3) provides that foreign attorneys' authority should also be superseded by the appointment of a guardian by a Scottish court.

101. Subsection (4) protects people who deal with attorneys without realising that their powers have terminated, particularly where the person concerned has acquired heritable property, unaware of circumstances provided in subsections (4)(a) and (b). Subsection (4)(a) provides for the situation where the attorney's appointment has terminated because their marriage to the granter has ended. Subsection (4)(b) provides for circumstances in which the attorney has been superseded by a guardian.

PART 3: ACCOUNTS AND FUNDS

Section 25: Authority to intromit with funds

102. This section provides for a new statutory scheme under which the Public Guardian may grant authority for individuals to have access to and use (intromit with) the funds of an adult with incapacity who cannot look after those funds properly. Those who apply are expected to be family members or carers. Staff of social work departments or other statutory bodies cannot be given authority. The scheme applies to funds held by any individual or organisation in an account where the adult is the sole holder of the account. It is envisaged that the scheme will apply mainly to bank and building society accounts, although it would extend to any similar organisation.

103. Subsection (2) requires the adult's account to be specified clearly and clarifies that only one authority to have access to the adult's funds can be granted at any one time. It would not, therefore, be possible for two people to have access to the adult's funds for different purposes.

Section 26: Application for authority to intromit

104. Subsection (1) sets out the information required for applying for authority to use the adult's funds. Subsection (1)(a) requires the application form to detail what the funds will be used for and how much is required for each item, for example, gas, electricity, Council Tax, food. It will be necessary to include information about the extent to which funds are to be used for shared household expenses.

105. Subsection (1)(c) provides that an application must be countersigned. The Scottish Ministers are to have the power to make regulations prescribing who is entitled to countersign. It is envisaged that the class of persons concerned will be similar to those entitled to authenticate passport photographs, for example, teachers, ministers, doctors. Subsection (1)(c) sets out further requirements of the person countersigning the application who must know both the adult and the applicant and must not have a personal interest in the application.

106. Subsection (1)(f) requires the application to be accompanied by a medical certificate, in a form to be prescribed in Regulations, confirming that the adult lacks the capacity to look after the funds concerned

107. Subsection (1)(g) requires details to be given of the new account set up by the applicant, the "designated account", into which the approved amounts are to be transferred from the adult's account. It is envisaged that this account will be clearly identified as the adult's account, although it will be operated by the person authorised to use the adult's funds.

108. Subsection (3) requires the Public Guardian to inform the adult and others who might be expected to have an interest, that an application has been made and that they have a right to make comments on it. The Public Guardian is obliged to take these into account before reaching a decision on whether to grant authority for access to the funds.

109. Subsection (4) provides for the Public Guardian to issue a statutory certificate confirming that an application has been granted. Details are to be entered in the register. The certificate is required by the person or organisation holding the adult's funds (the fundholder) to allow transactions on the account to take place. Otherwise, it is generally the practice to freeze the account of an adult who loses the capacity to operate it. The certificate will include details of the adult's account, the designated account to which funds are to be transferred and the period for which the Public Guardian's authority is to last.

110. Subsection (5) says that the certificate will require that neither the adult's account nor the designated account is to be overdrawn.

111. Subsection (6) clarifies that the certificate of authority will have the effect that only the authorised withdrawals are to be made from the adult's account and no other transactions on the account are to be permitted. Existing direct debit and standing order arrangements will be cancelled, and any cheque books and cards will be withdrawn.

112. Subsection (7) requires the Public Guardian to give the applicant a chance to make representations if it is proposed to refuse the application.

113. Subsection (8) allows for an application to be referred to the sheriff to be determined. The Public Guardian may decide to refer the matter to the sheriff, or may do so at the request of the applicant or anyone who objects to the application.

114. Subsection (10) defines a withdrawer as a person who is authorised in this Part of the Act to intromit with the adult's funds.

Section 27: Notification of change of address

115. This section requires the withdrawer to inform the Public Guardian of a change in their permanent address or that of the adult, so that the Public Guardian can update the register of authorisations under this Part of the Act.

Section 28: Purposes of intromissions with funds

116. Subsection (1) sets out the types of expenditure that may be authorised by the Public Guardian under this Part of the Act. These include day to day household and living expenses and care costs, such as payments for home help services or for residential care. The Public Guardian's fee for processing the application may be met from the adult's funds but not the applicant's legal fees or any other expenses incurred in relation to the application.

117. Subsection (2) allows the Public Guardian to authorise payments for items not included in subsection(1), at his discretion, for example, payments for small gifts to family members. Any such discretionary payments would have to fall within the general scope of the scheme for access to funds.

118. Subsections (3) and (4) clarify that the adult's funds must be spent on the adult's own requirements, although they may be used for shared household expenses, for example, where the withdrawer is the adult's partner and lives in the same house.

Section 29: Withdrawal and use of funds

119. Subsection (1) allows the fundholder of the adult's account to release to the designated account the amounts authorised by the Public Guardian's certificate of authority.

120. Subsection (2) confirms that the fundholder of the adult's account is liable to repay to the adult any amounts it has released from the adult's account after the Public Guardian's authority has been withdrawn. Although the fundholder is liable to make repayments to the adult, they may subsequently attempt to recover the sums concerned from the withdrawer.

121. Subsection (3) allows the Public Guardian to authorise other payments from the adult's account, for example a one-off payment to a supplier for goods or services

122. Subsection (4) allows an appeal to the sheriff against a decision of the Public Guardian not to allow access to the adult's funds, either for one of the specified purposes on a regular basis, or for an exceptional payment. The sheriff's decision will be final.

Section 30: Records and enquiries

123. Subsection (1) provides for regulations to be made by the Scottish Ministers requiring those with access to the adult's funds to keep records of how they have used the funds. regulations may also be made enabling the Public Guardian to require such records to be released for inspection on demand.

124. Subsection (2) allows the Public Guardian to make checks on how the adult's funds are being used. This includes asking for documentation, including receipts and notebook records that have been kept by the withdrawer.

125. Subsection (3) clarifies that the Public Guardian may make enquiries to the relevant fundholder about transactions on either the adult's or the designated account. The fundholders must release their records to the Public Guardian on request, for the purposes of investigation or spot check. This provision is required, because such information is normally released by the fundholder only to the account-holder.

126. Subsection (4) allows a fundholder who releases records to make a charge for this and to recover it from the adult's or the designated account as appropriate.

Section 31: Duration and termination of registration

127. Subsection (1) provides that authority for regular payments from the adult's account should normally last for 3 years, at which point a fresh application to the Public Guardian in the same form as the original application would be required. Subsection (2) allows the Public Guardian to vary the period of the authority and to allow any other period, including an indefinite period, as he thinks fit.

128. Subsection (3) allows the Public Guardian at his sole discretion to suspend or terminate an authority to have access to funds. The suspension or termination would have to be notified to the withdrawer and, through a formal certificate, to the fundholder.

129. Where the Public Guardian terminates the authority to withdraw, he may under subsection (4) grant an interim authority for a period of up to 4 weeks, provided the adult still lacks capacity to operate their account. The interim authority would allow payments specified by the Public Guardian to be made from the adult's account, in order to prevent hardship of the adult, and of the withdrawer where the relevant expenses are shared. An interim certificate of authority is to be in the same format as a normal certificate and particulars are to be entered in the register.

130. Subsection (6) allows an appeal to the sheriff against a decision of the Public Guardian to suspend or terminate an authority. Suspension or termination of the authority is to remain in effect notwithstanding any appeal to the sheriff until it is reversed on appeal.

131. Subsection (7) clarifies that the authority to have access to the adult's funds automatically terminates where a guardian with the relevant powers is appointed, or an intervention order is granted, or an attorney acquires authority to act. If someone continues to act under the Public Guardian's authority in good faith, however, they will not have to repay to the adult the amounts they have spent.

132. Subsection (8) clarifies that access to funds shall be terminated by the appointment of either a foreign guardian recognised under the law of Scotland or a foreign attorney, with relevant powers.

Section 32: Joint accounts

133. This section applies to "either/or survivor" joint accounts, in other words those enabling any account holder to operate the account without a signature being required from the other holder(s). It does not apply to joint accounts where all the joint account holders have to sign every cheque or withdrawal document. The purpose of the provision is to ensure that one holder of such an account can continue to operate the account if the other holder becomes incapable of doing so, unless the account holders have specifically agreed to opt out of this provision. The purpose is to ensure that fundholders do not freeze a joint account on becoming aware of the incapacity of one of the account holders, thus preventing any withdrawals from the account and requiring the appointment of a guardian to gain access to the funds held.

134. The continued authority to operate will not apply if the joint account holders have previously agreed to opt out of the scheme by confirming with the fundholder that the incapacity of one of them should terminate the authority of the other account holder(s) to operate the account. Nor will the provision apply where the account holder(s) with capacity is/are prevented by a court order from operating the account.

Section 33: Transfer of funds

135. This section allows the Public Guardian to approve the transfer of the adult's funds to a different account. This might be convenient, for example, if the adult or person with access to their funds moved to a different address. The Public Guardian might also authorise movement of the account to allow funds to be lodged in an appropriate high interest account, from which payments under the scheme could be made directly.

Section 34: Disapplication of Part 3

136. This section confirms that authority to have access to the adult's funds will not be granted where there is a guardian with powers over the account, or a continuing attorney or person appointed under an intervention order with relevant powers. This provision applies to both the Public Guardian's authority and to the continued authority to operate a joint account.

137. Subsection (2) clarifies that subsection (1) applies to foreign guardians and attorneys if their powers are recognised in Scotland.

PART 4: MANAGEMENT OF RESIDENTS' FINANCES

138. This Part deals with the management of the financial affairs (defined at section39) of adults with incapacity, by the managers of care establishments (hospitals, nursing homes, residential care homes) and by a small number of establishments which will be able to apply to be registered only for the purpose of managing residents' finances.

Section 35: Application of Part 4

139. Subsection (1) sets out the categories of establishment which will be able to manage the finances of residents with incapacity.

140. Subsection (2) distinguishes between "registered establishments" and "unregistered establishments". "Registered establishments" includes those which currently have to register with local authorities or health boards in order to operate as care establishments (most independent sector care homes, nursing homes), and will also include those which have applied for and been granted the new form of limited registration under section36 for the specific purpose of managing residents' finances. "Unregistered establishments" are those which are presently exempt from registration (local authority homes, NHS hospitals). Both registered and unregistered establishments will be able to manage residents' finances and are collectively referred to in the Act as "authorised establishments". The references to paragraphs(ca) and (cb) of subsection(1) are to an earlier version of the Act and may be ignored as they are now meaningless. Under subsection(3), registered establishments, but not unregistered establishments, may opt out of managing their residents' finances. Subsection (4) allows regulations to be made to amend the list of authorised establishments.

141. Subsection (5) provides definitions of "the managers", by reference to schedule 1, and of "resident" as someone whose current main residence is the care establishment or someone who has been detained under the Mental Health (Scotland) Act 1984.

Section 36: Registration for purposes of managing residents' finances

142. This section amends the Social Work (Scotland) Act 1968 to provide a new form of limited registration, for the specific purpose of managing residents' finances. It is expected that establishments applying will include some offering forms of sheltered accommodation.

Section 37: Residents whose affairs may be managed

143. Subsection (1) provides that managers may manage the matters set out in section 39 on behalf of any resident where a medical practitioner has provided a certificate to the effect that the resident is incapable of doing so.

144. Subsection (2) provides that where the managers of a care establishment have considered alternative approaches to managing a resident's financial affairs, but decided that the most appropriate is management under this Part of the Act, the managers must ask a medical practitioner to assess that resident's capacity. If the medical practitioner finds that the resident is incapable of taking decisions about their funds, or of managing those funds properly, a certificate will be issued accordingly.

145. Subsection (3) requires that the managers of a care establishment must tell residents and their nearest relative that it is intended to assess their capacity.

146. Subsection(4) requires the managers and the supervisory body to notify the resident and their nearest relative of matters relating to a certificate of incapacity issued under subsection(2), and of the managers' intention to look after the resident's financial affairs.

147. Subsection (6) prohibits a medical practitioner from providing a certificate of incapacity if the medical practitioner is related to the resident or manager or has any financial interest in the establishment.

148. Subsection(7) requires that certificates of incapacity under this Part of the Act are to be reviewed as required, and that they should expire after 3years.

149. Subsection (8) provides that a resident need not be told of the intention to assess capacity, nor be given a copy of the certificate of incapacity if there is evidence that this would be seriously detrimental to the individual's health. Subsection(9) allows for regulations to prescribe the type of evidence that the supervisory body would require before deciding that the adult should not be informed.