A Child Trust Fund (CTF) is a long-term, tax-free savings account for children. The money belongs to the young person and they can only take it out when they turn 18.
If a young person lacks mental capacity and as a result cannot handle their finances, a parent or guardian must apply to the Court of Protection to allow them to manage these funds. This vital safeguard exists to protect vulnerable people from fraud or abuse.
Parents and guardians who apply to the court before their child’s 18th birthday already do not pay fees, unless the child has other substantial assets. The Ministry of Justice and HM Treasury are working closely with Child Trust Fund providers to ensure that parents are aware of this and can take necessary steps.
Today’s announcement means that families who need to access the money in this fund to help support the young person’s future can now ask for fees to be waived. Those who have already paid can request a refund under the plans. A new working group will also consider what more can be done to streamline the process and make it more accessible for parents.
This follows concerns from parents and campaigners that the system can be stressful and costly for families.
Justice Minister, Alex Chalk said:
We want to reduce the obstacles families face in supporting young people who lack mental capacity.
This fee remission will ensure that families who need to go to the Court of Protection to access these funds will not suffer financially as a result.
Our working group will look at improving this process even further, making it more streamlined and accessible.
Professor Baroness Finlay of Llandaff Chair of the National Mental Capacity Forum, said:
The Mental Capacity Act offers important protections for vulnerable people who cannot make decisions for themselves.
We need to balance the needs of families with children with a learning disability with ensuring appropriate safeguards are in place. Improving guidance and removing the need to pay fees are welcome steps to providing that balance.
Dan Scorer, Head of Policy and Public Affairs at the learning disability charity Mencap, said:
High costs and the complexity of the legal system are stopping families from accessing Child Trust Fund money for young people with a learning disability who can’t manage the funds themselves.
We welcome the government’s commitment that no one will have to pay fees to solely access a Child Trust Fund via the Court of Protection.
We hope that the establishment of an advisory working group will help streamline the legal process to help families access a Child Trust Fund.
Any changes made must both make it easier for family members and protect the best interests of people with a learning disability.
Eligibility for fee remission is based upon the capital and income of the person who is lacking capacity – in this case the child. The vast majority of those applying to the Court of Protection will not have to pay a fee if they:
- apply prior to the child’s 18th birthday
- ask for a fee waiver through the Help with Fees scheme
- ask for a fee waiver due to exceptional circumstances, which includes the CTF being the only asset of the child (regardless of the amount), and where their monthly income is below £1,085
Updated guidance has been provided to the Court of Protection to address these circumstances and when a fee remission is applicable. This will ensure that parents, guardians, and young people do not suffer the consequences of not being informed they need to apply prior to the young person’s 18th birthday.