MHCC Mental Health Rights Manual

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Chapter 5 Section C: Financial Management

A Financial Manager is a substitute decision-maker for financial and property related decisions only.

In this section you can find out more about:

5C.1: When will a financial manager be appointed?

A Financial Manager may be appointed when a person is considered, at law, to be incapable of managing his or her financial and property related affairs.

A Financial Manager may be appointed either by the Guardianship Division of the NSW Civil and Administrative Tribunal (NCAT) under the Guardianship Act 1987 (NSW) by the Mental Health Review Tribunal or the Supreme Court under the NSW Trustee and Guardian Act 2009. However, the circumstances in which these Tribunals and the Court exercise this power varies somewhat, and the legal tests that have to be met before a Financial Manager can be appointed also vary to some degree.

Before it can appoint a Financial Manager for a person under the Guardianship Act 1987 (NSW), the Guardianship Division of NCAT must be satisfied that a person is not capable of managing their financial affairs, that there is a need for a Financial Manager to be appointed, and that it is in the best interests of the person with a decision-making disability that a Financial Manager be appointed. Under the NSW Trustee and Guardian Act 2009, the Supreme Court and the Mental Health Review Tribunal must simply be satisfied that a person is not capable of managing their financial affairs.

Any person with a genuine concern for the welfare of a person with a decision-making disability can apply to the Guardianship Division of NCAT under the Guardianship Act 1987 (NSW) for the appointment of a Financial Manager. A person must have a ‘sufficient interest’ in the financial affairs of the person with decision-making disability to apply to the Supreme Court or the Mental Health Review Tribunal under the NSW Trustee and Guardian Act 2009 for the appointment of a Financial Manager. The Supreme Court can also appoint a Financial Manager on its own motion – that is, without anyone making an application. This might happen, for example, if the Court awards a person a large amount of money for damages for an injury and the Court is concerned about the person’s ability to manage those funds.

The Mental Health Review Tribunal only has the power to hear an application for a Financial Management Order for a ‘patient’ currently being treated in a Mental Health Facility. The term ‘patient’ refers to both voluntary and involuntary patients of Mental Health Facilities. However, when a Financial Management Order is made for a patient it continues when that person is discharged from the Mental Health Facility. The Guardianship Division of NCAT and the Supreme Court can hear an application for a Financial Management Order for any person with a decision-making disability (including a patient of a Mental Health Facility).

The Guardianship Division of NCAT and the Supreme Court can appoint either a Private Financial Manager (who might be a family member or friend of person with a decision-making disability over the age of 18 years) or the NSW Trustee and Guardian (which is a public official). Private Financial Managers are supervised in the performance of their functions by the NSW Trustee and Guardian. The Mental Health Review Tribunal is only able to appoint the NSW Trustee and Guardian as Financial Manager.

A Financial Manager may be appointed to manage all of a person’s financial affairs, or particular parts of their estate. For example, a person may be viewed as capable of managing their day-to-day financial affairs but as incapable of managing a large share or property portfolio they have received under an inheritance.

Once a Financial Manager Order is made by the Supreme Court or Mental Health Review Tribunal, it continues until such time is it revoked. It is not time limited or subject to review. The Guardianship Division of NCAT can require, at the time it makes a Financial Management Order, that the Order be subject to review at some time in the future, but it does not have to do so.

Both the Guardianship Division of NCAT and the Mental Health Review Tribunal can also make an Interim Financial Management Order. An Interim Financial Management Order is for a specified length of time up to six months. These orders protect a person’s financial affairs while information is being gathered about their capacity to manage their own affairs. A final decision about whether a Financial Management Order is needed must be made before the Interim Order lapses. If an Interim Financial Management Order is made by the Mental Health Review Tribunal, and the patient is discharged from the Mental Health Facility, the Interim Order lapses at the end of the period specified. The Mental Health Review Tribunal has no power to make a Financial Management Order following the patient’s discharge even if they continue to be subject to an Interim Order for a period following their discharge.

5C.2: What powers does a financial manager have?

The person appointed as your Financial Manager has the authority to make decisions about all of your financial affairs that fall within the scope of their appointment, including, if relevant, the authority to operate your bank accounts, pay your bills, make investments for you and approve payments for items or services you may need. Your Financial Manager is able to make decisions in legal proceedings on your behalf and to ensure your interests are protected in legal matters.

The Guardianship Division of NCAT and the Mental Health Review Tribunal can exclude part of a person’s estate (money and property) from the Financial Management Order, which means you keep control of part of your financial affairs and the Financial Manager has authority over the rest of the estate.

If a Financial Management Order is made, it stops the operation of any Power of Attorney, including any Enduring Power of Attorney that you may have put in place earlier.

Financial managers are sometimes permitted to charge a fee to manage your finances. If the Public Trustee and Guardian is appointed as your financial manager, they will always charge a fee to manage your financial affairs. However, in some circumstances you may be able to apply for a fee waiver or reduction for a period of time. Usually, Private Financial Managers are not permitted to charge you a fee to manage your finances. However, this may be permitted if your Private Financial Manager is a trustee company, or the Supreme Court has authorised it.

Click here to find information about the fees charged by the NSW Trustee and Guardian.

5C.3: The NSW Public Trustee and Guardian: role as financial manager

The financial management role of the NSW Trustee and Guardian was until 2009 carried out by the NSW Protective Commissioner. The functions of the Protective Commissioner have been taken over by the NSW Trustee and Guardian but there remain many Financial Management Orders appointing the Protective Commissioner as financial manager. The NSW Trustee and Guardian now has responsibility for these Orders.

The NSW Trustee and Guardian will always charge a fee to be your financial manager. However, in some circumstances you may be able to apply for a fee waiver or reduction for a period of time.

Click here to find information about the fees charged by the NSW Trustee and Guardian.

Click here to find contact details and office locations for the NSW Trustee and Guardian

5C.4: Enduring power of attorney

If you are considered, at law, to have legal capacity, you can give a person over the age of 18 years your ‘Power of Attorney’, which will enable them to make financial decisions on your behalf. The Power of Attorney could relate to all of your financial affairs, or to particular financial transactions for example, you could give your Attorney authority to sell your house, or operate your bank account while you  travel overseas.

In NSW, if you are considered, at law, to have legal capacity, you can also create an Enduring Power of Attorney appointing a person over the age of 18 years to act as your Power of Attorney if you cease to have legal capacity in the future. An Enduring Power of Attorney may give your Attorney power to deal with all of your financial affairs or particular parts of your estate.

An Enduring Power of Attorney granted in NSW is recognised in Queensland, Victoria and Western Australia, but not in any other state or territory at this stage. The law is progressively changing in this area so you should check to see if this information remains up to date. If you have property in other states or territories, then you should get legal advice as to whether the granting of the Power of Attorney will be valid where you have property or other assets. You may have to prepare another Enduring Power of Attorney for that state or territory. If you have made an Enduring Power of Attorney in another Australian State or Territory it will be recognised in NSW. However, an Enduring Power of Attorney which has been made in another country will not be recognised in NSW.

If at all possible, you should get legal advice, and have a lawyer prepare the document granting an Enduring Power of Attorney. This document is then registered. Follow this link to find out about getting legal help.

The NSW Trustee and Guardian can also give you advice about, and can prepare and register an Enduring Power of Attorney for you. The NSW Trustee and Guardian will charge you for this service, follow this link for more information.

The Guardianship Division of NCAT, and the Supreme Court can both review, and if appropriate cancel, an Enduring Powers of Attorney. The Guardianship Division of NCAT or the Supreme Court may do so if the person you have granted your Enduring Power of Attorney is not acting in your best interests. If you think this is happening, you should apply to the Guardianship Division of NCAT or to the Supreme Court requesting a review of the Enduring Power of Attorney. If the situation is urgent, you are probably best advised to contact the Guardianship Division of NCAT immediately as it may be more capable of dealing with the matter immediately:

Freecall*: 1800 463 928
Phone: (02) 9556 7600
Telephone typewriter (TTY): (02) 9556 7634

* Remember, mobile phone calls to freecall numbers (numbers starting with 1800) are charged to the caller at the usual mobile rate.

When you contact the Guardianship Division of NCAT, you should make it clear that you think you are in danger of losing your assets or property. The Supreme Court can also deal with applications on an urgent basis. However, you will probably need the help of a lawyer to bring the matter to the Court.

The person who is exercising the Power of Attorney (called ‘the Attorney’) must act in your best interests, not in their own interests or in the interests of other people or organisations. For example, they are not allowed to sell your house and then use the proceeds for their own benefit or the benefit of someone else other than you.

The Guardianship Division of NCAT and Supreme Court of NSW have the power to cancel or change an Enduring Power of Attorney or remove the Attorney and appoint someone else in their place. They can reinstate an Enduring Power of Attorney that has lapsed because the Attorney has ceased to act (for example, if the Attorney dies) and replace the original person with another suitable person. They can require an Attorney to provide accounts, bank statements and so on, so that an audit can take place. They can also ask the Attorney to have a financial management plan for you.

The Guardianship Division of NCAT and Supreme Court of NSW have the power to cancel or change an Enduring Power of Attorney or remove the Attorney and appoint someone else in their place. They can reinstate an Enduring Power of Attorney that has lapsed because the Attorney has ceased to act (for example, if the Attorney dies) and replace the original person with another suitable person. They can require an Attorney to provide accounts, bank statements and so on, so that an audit can take place. They can also ask the Attorney to have a financial management plan for you.

If there is a dispute as to whether an Enduring Power of Attorney is valid, the Guardianship Division of NCAT and the Supreme Court can also decide whether you had legal capacity when you first signed the document granting the Enduring Power of Attorney. They have the power to declare the granting of an Enduring Power of Attorney invalid if you did not have capacity at the time you signed it. The Guardianship Division of NCAT and the Supreme Court can also make an Order to the effect that the Enduring Power of Attorney has come into force because you have become incapable, at law, of managing your financial affairs even if you disagree that this is the case.

Follow this link for more information about hearings before the Guardianship Division of NCAT

5C.5: Powers of the Mental Health Review Tribunal to make financial management orders

If you are a patient under the Mental Health Act 2007 (NSW), the Mental Health Review Tribunal can make a Financial Management Order appointing the Public Trustee and Guardian to manage your financial affairs. The Tribunal can’t appoint a Private Financial Manager. The Tribunal may make this decision at a Mental Health Inquiry or at a hearing convened following a specific application to the Tribunal for such an Order.

For more information about the Mental Health Review Tribunal and its hearings, follow this link.

The Tribunal can also make an Interim Financial Management Order, which is an Order that lasts for a short period of time (up to a 6 month maximum). An Interim Financial Management Order can only be made to enable more information to be gathered and assessed about your capacity to manage your financial affairs.

A Financial Management Order, except for an Interim Financial Management Order, made by the Mental Health Review Tribunal does not lapse or expire if you stop being a patient in a Mental Health Facility.

Click here to find the form for requesting cancellation of a financial management order and other information about the Mental Health Review Tribunal and financial management.

5C.6: Powers of the Mental Health Review Tribunal to make a financial management order at a Mental Health Inquiry

Single members of the Mental Health Review Tribunal conducting Mental Health Inquiries have the same powers as the full Mental Health Review Tribunal to make a Financial Management Orders for people who are made involuntary patients. For more about these powers, click here.

5C.7: Review of financial management decisions

If your Financial Management Order was made by the Guardianship Division of NCAT (or the former Guardianship Tribunal) it may be subject to automatic review because the Tribunal decided that it would be reviewed when it made the Order. When it reviews the Order the Tribunal can decide to continue, cancel, or change the terms of the Order.

Otherwise, if you want the Guardianship Division of NCAT to cancel or change the terms of your Financial Management Order you must ask the Tribunal to conduct a review. You do this by filling in a form which requests this review. The Guardianship Division of NCAT has developed an Easy-English kit which explains what you need to do and how to about it. Follow this link for information about the Guardianship Division of NCAT.

Follow this link to find the easy-English kit that explains how to request a review of a Financial Management Order.

Follow this link to obtain the form you need to request a review of your Financial Management Order

5C.8: Cancelling a financial management order

If you want the Guardianship Division of NCAT to cancel or change a Financial Management Order that it (or the former Guardianship Tribunal) has made, you need to request a review of the Financial Management Order.

Follow this link for information about how to request a review of a Financial Management Order.

If you are no longer a person subject to a Guardianship Order and are no longer a patient in a Mental Health Facility, the NSW Trustee and Guardian has power to terminate a Financial Management Order if it believes you are now capable of managing your own financial affairs. You can ask the NSW Trustee and Guardian to terminate your Order.

If you remain a person under a Guardianship Order, or a patient in a Mental Health Facility, and the NSW Trustee and Guardian believes you have become capable of managing your financial affairs, the NSW Trustee and Guardian must refer your case to either the Guardianship Division of NCAT or to the Mental Health Review Tribunal which will decide if the Financial Management Order should be cancelled. The NSW Trustee and Guardian and you will need to prove to the Tribunal that you are now capable of managing your affairs.

If your Financial Management Order has been made by the Mental Health Review Tribunal, you can apply to that Tribunal to have your Financial Management Order cancelled (‘revoked’). You will have to prove to the Tribunal that you are now capable of managing your affairs or that it is in your best interests that your Financial Management Order is revoked. You do not have to be a patient in a Mental Health Facility to make such an application to the Tribunal.

If your Financial Management Order has been made by the Supreme Court, you must apply to the Supreme Court if you want this Order cancelled or changed. You will probably need the help of a solicitor to do so.

If the Guardianship Division of NCAT or the Mental Health Review Tribunal has made a Financial Management Order for you and you believe that this decision is wrong, you can appeal this decision either to the NSW Civil and Administrative Tribunal or to the Supreme Court.

You are strongly advised to get legal advice before you begin this process.

 DISCLAIMER

  • The legal and other information contained in this Section is up to date to 30 Jan 2015
  • This Manual only refers to the law and practices applying to the Australian state of New South Wales (NSW) - unless it states otherwise.
  • MHCC does not guarantee the accuracy nor is responsible for the content or the currency of the content of external documents and websites linked to this Manual.