Who Is Exempt From LPA Fees?

This article provides essential information about UK Lasting Power of Attorney (LPA) fees. It specifically focuses on who is exempt from these fees. This topic is critical as the cost of setting up an LPA can often be a significant barrier for many people.

Reading this article will help you to:

• Understand why it is essential to know about LPA fee exemptions.
• Learn about the criteria for total exemption from LPA fees and partial fee remission.
• Understand the critical topics related to LPA fee exemptions.
• Recognize the benefits of understanding these topics for managing your financial affairs.
• Decide on the actions to take after reading the article.

Who Is Exempt from LPA Fees?

The cost of setting up an LPA can be a concern for many. However, the Office of the Public Guardian (OPG) exempts specific individuals.

These exemptions are primarily based on an individual’s financial situation. You may be eligible for a total exemption from the LPA fees if you receive certain means-tested benefits.

An individual with a low gross annual income may also be exempt from the LPA fees. The OPG has established income thresholds for fee exemptions, which are updated regularly. It is essential to keep updated with the latest information from the OPG.

Finally, there are certain exceptional circumstances where an individual may be exempt from LPA fees. For example, if an individual has received personal injury damages above a certain threshold, they may be eligible for fee exemption.

It is essential to seek legal advice from a solicitor regulated by the Solicitors Regulation Authority to understand these exceptional circumstances.

Understanding Lasting Power of Attorney (LPA) Fees

A Lasting Power of Attorney (LPA) is a legal document that allows you to appoint someone you trust to make decisions on your behalf if you lose mental capacity. There are two types of LPA: one for property and financial affairs and another for health and welfare.

The application fee for registering an LPA is fixed and set by the OPG. This fee is required for each LPA form you register. For example, you must pay two fees if you register both a property and financial affairs LPA and a health and welfare LPA.

Criteria for Full Exemption from LPA Fees

1. Eligibility Based on Means-Tested Benefits

You may be eligible for full exemption from LPA fees if you receive certain means-tested benefits. These benefits include Income Support, income-based Employment and Support Allowance, income-based Jobseeker’s Allowance, Guarantee Credit part of State Pension Credit, and Housing Benefit.

You must provide evidence of your benefit entitlement, such as an official letter from your benefit provider.

2. Impact of Personal Injury Damages on Exemption

Suppose you have received more than £16,000 in personal injury damages that were disregarded when determining eligibility for a means-tested benefit.

You may also be eligible for an LPA fee exemption in that case. However, it is essential to note that this is a complex area, and it is recommended that you seek legal advice to understand if your situation qualifies for this exemption.

Steps to Determine Your Eligibility for LPA Fee Exemption

This section provides a step-by-step guide to help you determine if you are exempt from LPA fees. It is essential to know how to navigate this process, as it can save you money when setting up your LPA.

This guide will take you through the key steps in checking your eligibility for LPA fee exemption and provide you with the necessary actions.

Before you start, it is crucial to understand that fee exemptions are granted based on your financial situation and other exceptional circumstances. Therefore, gathering relevant financial information and documents is essential before you begin this process. Now, let’s dive into the steps.

Step 1: Check Your Benefits

The first step in determining your eligibility for LPA fee exemption is to check if you receive any means-tested benefits.

These include Income Support, income-based Employment and Support Allowance, income-based Jobseeker’s Allowance, Guarantee Credit part of the State Pension Credit, and Housing Benefit.

You will likely be eligible for a total LPA fee exemption if you receive these benefits. To confirm this, you will need an official letter from your benefit provider to provide evidence of your entitlement. Remember, each benefit has its criteria, so it’s a good idea to get advice if you’re unsure.

Step 2: Review Your Personal Injury Damages

You might also qualify for an LPA fee exemption if you have received more than £16,000 in personal injury damages that were disregarded when determining eligibility for a means-tested benefit.

This is a complex area, and it is always recommended that you seek legal advice to understand if this applies to your situation.

You must provide documented evidence of your injury and the damages you received. This evidence could be a court document or an official letter from an insurance company.

It is also a good idea to record any correspondence relating to your injury and damages, as this could be useful if there are any queries.

Step 3: Assess Your Gross Annual Income

Your gross annual income can also affect your eligibility for an LPA fee exemption. If your income, before tax, falls below a certain threshold, you may qualify for a 50% fee reduction. This is known as a ‘remission’.

To assess this, you will need to gather evidence of your income. This can be in bank statements, wage slips, or a letter from your employer. If you’re self-employed, you might need a statement from a qualified accountant or a tax calculation document from HM Revenue and Customs.

Partial Fee Remission: Who Qualifies?

Partial fee remission is another option the OPG provides for those who may not be eligible for a total exemption. This involves a 50% reduction in the LPA registration fee. The critical criterion for partial fee remission is income-based.

If your gross annual income, which is your income before tax, falls below a certain threshold, you may qualify for this fee remission. This includes income from employment, non-means-tested benefits, pensions, interest from savings and investments, and rental income.

It is important to note that your partner’s income is not considered unless you’re married, in a civil partnership, or living together and sharing income.

3. Income Threshold for 50% Fee Remission

The OPG sets the income threshold for a 50% fee remission. If your gross annual income is less than £12,000, you may qualify for a 50% reduction in the LPA registration fee. This income limit is subject to change, and you should check the latest information from the OPG.

If you qualify for a 50% fee remission, you must pay half the application fee for each LPA form you register. If you register both a property and financial affairs LPA and a health and welfare LPA, you must pay half the fee for each.

4. Evidence Required for Income-Based Remission

To prove your income-based remission eligibility, you must provide evidence of your income. This can include wage slips, bank statements showing pension payments, or documents showing income from savings and investments.

If you are self-employed, you may need to provide a document from a qualified accountant or a tax calculation from HM Revenue and Customs. In all cases, it is essential to provide the most recent evidence of income, such as consecutive wage slips from the last three months.

Applying for LPA Fee Exemption or Remission

Once you have determined your fee exemption or remission eligibility, the next step is to apply. The process involves filling out the appropriate LPA forms and providing evidence for your exemption or remission.

When applying for a fee exemption or remission, it is important to accurately fill out the LPA forms and provide all the required information.

This includes personal details, information about the attorneys and replacement attorneys you appoint, and information about the certificate provider who will confirm that you have the mental capacity to make an LPA.

The forms also include a section where you indicate whether you are applying for a fee exemption or remission. You must provide evidence of your eligibility, such as an official letter from your benefits provider or documents showing your income.

Research on LPA Fee Exemptions in the UK

Recent statistics from the UK Office of the Public Guardian (OPG) provide insight into using LPA fee exemptions and remissions. According to the OPG’s 2019/2020 report, approximately 18% of LPA applications received fee remissions or exemptions.

This suggests that many people benefit from these provisions to reduce the financial burden of establishing an LPA.

The same report from the OPG also revealed that more than half of the fee remissions were granted to applicants with a gross annual income of between £12,000 and £18,000.

This income bracket represents a significant portion of the UK population. It includes individuals receiving non-means-tested benefits such as Attendance Allowance and Disability Living Allowance, which are crucial in determining eligibility for LPA fee exemptions and remissions.

However, despite the availability of these exemptions and remissions, many eligible individuals are not applying for them. This finding highlights the importance of raising awareness about LPA fee exemptions and remissions and providing clear and accessible information to those who stand to benefit.

A Case Study on Exemptions from LPA Fees

Let’s consider a brief case study to bring the topic of LPA fee exemptions to life. This real-world example should make the subject more relatable and easier to understand.

Consider the case of Mary, a 74-year-old lady living in a care home in the UK. Mary receives the Guarantee Credit part of the State Pension Credit and Attendance Allowance, both non-means-tested benefits.

Mary has decided to set up an LPA as she wants her daughter to manage her financial affairs and welfare decisions if she loses mental capacity. However, Mary is worried about the cost of setting up an LPA.

After seeking advice from a solicitor, Mary learns about the option of fee exemptions for those receiving certain benefits.

She provides an official letter from her benefit provider as evidence of her entitlement. As Mary gets the Guarantee Credit part of the State Pension Credit, she qualifies for a full exemption from the LPA fee.

With the help of her solicitor and her daughter, Mary completed the LPA form, including the section stating that she was applying for a fee exemption.

This case study highlights how the knowledge of LPA fee exemptions can help individuals like Mary manage their financial affairs without the burden of additional costs.

Key Takeaways and Learnings

This article has covered significant points about exemptions from LPA fees in the UK. The information provided should help you understand who may be exempt from these fees and the steps to determine eligibility. Now, let’s summarise the key points to remember:

• LPA fees can be significant, but the Office of the Public Guardian (OPG) provides eligible individuals full exemptions and partial remissions.
• Full exemptions are available for those receiving certain means-tested benefits, such as the Guarantee Credit part of State Pension Credit, and those receiving personal injury damages of more than £16,000.
• Partial fee remissions are provided to individuals with a gross annual income of less than £12,000.
• It’s essential to provide evidence of your income or benefits to support your application for a fee exemption or remission.
• A case study has shown how knowing LPA fee exemptions can help individuals manage their financial affairs without the burden of additional costs.

Understanding who is exempt from LPA fees is crucial for individuals considering setting up an LPA.

By being aware of the available exemptions and remissions and the steps to apply for them, individuals can make informed decisions and potentially save money. It is always worth seeking legal advice to ensure you are fully informed about your options.

Frequently Asked Questions

To help answer other vital questions that you may have, here are some frequently asked questions related to the topic of LPA fee exemptions.

1. What is the role of the Public Guardian OPG in LPA fee exemptions?

The Office of the Public Guardian (OPG) is responsible for setting and collecting the LPA registration fee and providing exemptions and remissions to eligible individuals. They assess each application for a fee exemption or remission and decide based on the evidence provided.

2. Can I apply for an LPA fee exemption if I receive a working tax or universal credit?

Yes, receive the disability element or severe disability element of the Working Tax Credit or the Universal Credit equivalent. You may be eligible for a full LPA fee exemption. You must provide evidence of your benefit entitlement, such as an official letter from your benefit provider.

3. How does the Mental Capacity Act relate to the LPA fee exemption?

The Mental Capacity Act governs the requirements for setting up an LPA. An LPA can only be established if the individual has the mental capacity to make this decision.

The Act does not directly relate to the LPA fee exemption. Still, it does stipulate that the individual setting up the LPA must have the capacity to understand the implications of the fee exemption or remission.

4. Can someone with an enduring power of attorney apply for an LPA fee exemption?

Yes, if you have an existing Enduring Power of Attorney (EPA) and wish to set up an LPA, you can apply for a fee exemption or remission. The criteria for fee exemptions and remissions apply to both LPAs and EPAs.

5. Does receiving Personal Independence Payment qualify me for an LPA fee exemption?

If you receive the Personal Independence Payment (PIP) or the Disability Living Allowance (DLA), you may be eligible for a full LPA fee exemption. You must provide evidence of your benefit entitlement, such as an official letter from your benefit provider.