The appointment of a deputy under the Mental Capacity Act is a significant responsibility and a responsibility which continues to grow. All deputies who act as employer must now also be sure that the legislative obligations under the Pensions Act 2008 are fully considered and met.
In many cases and especially where ‘P’ is in receipt of a damages award, the deputy is involved in the establishment of a private care regime. Rather than commissioning care via an agency, for reasons of continuity and of cost, many deputies consider the direct employment of carers.
Under the generally wide terms of Court of Protection orders that are now provided to professionals, the deputy, on behalf of the client, will be authorised to contract for the engagement and provision of services to the client.
A deputy is the statutory agent of the person for whom they are appointed. As such, any duties or legal obligations ‘P’ may have, must be fulfilled by the deputy. The spectrum of responsibilities will include compliance with all employment legislation requirements, health and safety at work regulations and best practice.
The provisions of the Pensions Act 2008 provide deputies with an additional layer of responsibility.
Pensions Act 2008 - A brief background
The Pensions Act 2008 places a duty on all employers, irrespective of size, industry or sector, to provide, and make minimum contributions into, a workplace pension for their employees. These contributions will start at 1% of qualifying earnings, rising to 3% by 1 October 2018.
Certain criteria must be met before contributions need to be made. The employer must begin by assessing their workforce to see whether they meet the criteria; this not a one-off task but an ongoing responsibility.
The phasing in of these employer duties started in October 2012 with the largest employers, and will run through to 2018 by which time every employer will be required to comply.
The government have created a new pension scheme, the National Employment Savings Trust, or NEST, which is available to any employer.
However, whilst designed for automatic enrolment, NEST is just a pension scheme that an employer can offer to employees. It does not assist an employer to meet their responsibilities of assessing the work-force up front and on an on-going basis, undertake the necessary communication, or ensure that each employer’s records and compliance duties are met. This is the responsibility of the employer, although NEST does of course provide guidance, material and resources to assist.
The majority of deputies will not be pension experts. Therefore, deputies may wish to commission the services of a company, with appropriate expertise, resources and software, to assist in carrying out all tasks and duties to comply with the new legislation at a sensible cost.
There are numerous responsibilities set out in guidance notes from the Pensions Regulator. These obligations required include:
- Assessing the work force, both at the outset and on an on-going basis. Workers must be categorised into three types: Eligible job holders; non-eligible job holders; and entitled workers.
- Information specific to each category of work must then be produced and issued by employers; communications can be subject to deadlines.
- Choosing a pension provider.
- Data management; keeping records of employees’ categories; communications that have been issued and the choices that have been made by the employees. Bearing in mind the nature of the work-force that deputy would be employing (care workers and support workers) many will have fluctuating earnings, and therefore there will be on-going changes to eligibility. This must be monitored.
- Collection of contributions from those employees who are auto-enrolled, ensuring that contributions are calculated correctly. Employers must ensure that a qualifying pension plan has been arranged, and that a default investment has been chosen. There does of course need to be proper governance in place for any scheme.
- The coordination of all records and compliance both for scheme administration and regulatory purposes.
- Failure to comply with the new pensions rules to include financial penalties, including a fixed penalty of £400 as well as escalating penalties at a daily rate.
- Wilful non-compliance can indeed lead to criminal prosecution.
Currently, there are few companies able to offer a solution to ‘micro-employers’ because it is not cost effective for them. Some have designed a service that will ensure all responsibilities under the pensions legislation will be met, and some payroll providers may be able to assist with the ongoing administration.
There is currently no easy solution for deputies and there is little guidance offered by the Court or the OPG. However, how best to meet responsibilities and obligations under the new legislation must be considered and addressed by all deputies who act as employer, whether lay or professional.
Whilst employees can decide to opt-out of auto-enrolment, for employers this is simply not an option.
© Jordan Publishing 2015. This is an edited version of an article that was first published in the Elder Law Journal  2 Eld LJ 115 and is reproduced with permission of Jordan Publishing.