Child Trust Fund and Junior ISA consultation on withdrawals for those lacking mental capacity

Former_MSE_James_F

Families with disabled children will be able to withdraw up to £2,500 from Child Trust Funds (CTFs) or Junior ISAs without first needing court permission, in a move by the Government to try and reduce the financial burden for parents and guardians with vulnerable kids.

Read the full story here:
'Families with disabled children set to be allowed to withdraw £2,500 from Child Trust Funds and Juniors ISAs without the need for court approval'

Click reply below to discuss. If you haven’t already, join the forum to reply.

TezW30

Hello,

I am a newbie so please excuse me if these are stupid questions but I am struggling to understand. The article says the plans are rejected so does this mean the £2,500 cannot be withdraw without court approval? Also does this apply to all junior ISA's where the child is classed as not having the mental capability.

Thanks 

eskbanker

TezW30 said:

I am a newbie so please excuse me if these are stupid questions but I am struggling to understand. The article says the plans are rejected so does this mean the £2,500 cannot be withdraw without court approval? Also does this apply to all junior ISA's where the child is classed as not having the mental capability.

That seems to be what it's saying, yes:

Plans to allow the families of disabled children to more easily access funds in Child Trust Funds and Junior ISAs will not go ahead, the Government has confirmed. It means the existing court of protection process will remain in place.

[...]

Under current rules, those responsible for children who do not have the mental capacity to manage their own money must apply to the court to gain access to funds. This can incur costs of hundreds of pounds and take many months to finalise.

Malthusian

To save others a bit of looking up and down: the article was first published in November 2021, when the idea was proposed. (The article confusingly says "parents will be allowed" when "would be allowed" would be better.) It was updated on 26 April 2023 when the proposal was rejected.

lotti_bosman

If a child with a severe learning difficulty or lacking mental capacity has money in a trust fund or JISA and turns 18, I'd be interested to know whether the money would be under consideration regarding means tested benefits. This is if the (now) adult is still under the care of his/her parents, who (as things stand) would actually be unable to access the money (without costly implications) for the benefit of their child.

Malthusian

lotti_bosman said:

If a child with a severe learning difficulty or lacking mental capacity has money in a trust fund or JISA and turns 18, I'd be interested to know whether the money would be under consideration regarding means tested benefits. 

Yes. At least for a JISA, bare trust or other money to which they are absolutely entitled. A discretionary trust might be different.

This is if the (now) adult is still under the care of his/her parents, who (as things stand) would actually be unable to access the money (without costly implications) for the benefit of their child.

Looking after a disabled child or adult is very expensive, but I don't think accessing the child's money should have an additional cost in this instance. If the parents are going to be caring for their now-adult child long term, they will presumably need deputyship from the Court of Protection anyway to manage their finances, and they can use that to access the money. If the parents and the child have very little savings and income, the Court of Protection's fees may be discounted or waived.