Child Trust Funds

Debate between Lord Wolfson of Tredegar and Lord Flight

Monday 11th October 2021 Lords Chamber

[Lord Wolfson of Tredegar (Con)]

My noble friend does not have to impress on me the need for urgency. I have been working hard on this matter since it was first raised. The problem with the industry scheme is not that it is not endorsed by the Government but that it is inconsistent with the Mental Capacity Act, a piece of legislation passed by Parliament.

[Lord Flight (Con)]

This issue has been raised five times by my noble friend Lord Young and this is the second time that I have supported him. It is a travesty that those with learning difficulties who are over 18 cannot access their child trust funds. It should not be necessary for parents to apply for a Court of Protection order on behalf of their adult children. As my noble friend Lord Young pointed out, only a handful of parents have negotiated the Court of Protection route successfully. There are surely less demanding ways to protect their beneficiary children’s interests. Some financial institutions have released funds using a streamlined procedure. Hopefully, this will be refined in the consultation paper, but it is not currently endorsed by the Government. The issue currently affects 10,000 children with trust funds who cannot simply access their cash when they reach the age of 18 without a court order. Can the Minister advise the House as to whether the DWP working group has considered this issue?

[Lord Wolfson of Tredegar (Con)]

My Lords, let me give a short answer to a long question. It is not a question of whether going to court should or should not be necessary: it is necessary because Parliament passed the Mental Capacity Act, which requires it. In 1995, the Law Commission recommended a small payments scheme. That was not taken up by Parliament, but I am now consulting on it, because it seems to me that that is the right way forward.

Child Trust Funds: People with a Learning Disability

Debate between Lord Wolfson of Tredegar and Lord Flight

Tuesday 22nd June 2021 Lords Chamber

[Lord Wolfson of Tredegar (Con)]

My Lords, the right reverend Prelate is absolutely right: the focus should be on people applying before the young adult turns 18, at which point the legal position changes. We are engaging with industry providers to make sure that parents are aware of that change. We have put material on the GOV.UK pages, HMRC has also published material and my ministerial colleague Minister Chalk will host a round table on 15 July, bringing together relevant stakeholders to enable us to progress this work further.

[Lord Flight (Con)]

This is the fourth time that my noble friend Lord Young has asked this question. It is a travesty that children with learning difficulties who are over 18 cannot readily access their child trust fund. The Government need to grasp and solve this problem. I do not see why parents should need a Court of Protection order to access funds on their adult children’s behalf. There is now all the more reason for enacting legal changes to solve this problem, which faces 200,000 children with trust funds who cannot access their cash when they are 18 because of their disability. I do not see the DWP working group readily solving the legal problems here. The crucial need is to be able to access balances without requiring a Court of Protection order. This needs special legislation to achieve. Can the Minister update the House on what the group has achieved?

Child Trust Funds: Children with Learning Disabilities

Debate between Lord Wolfson of Tredegar and Lord Flight

Thursday 25th March 2021 Lords Chamber

[Lord Wolfson of Tredegar (Con)]

My Lords, the position is this: in 1995, when the Law Commission reported on this, it recommended a small claims exception to the Mental Capacity Act. Parliament did not do that; it put in a Mental Capacity Act with no exceptions at all. That is the legislative background against which I now have to operate.

[Lord Flight (Con)]

My Lords, increased legal requirements have made it ever more expensive to gain access to children’s trust funds. The Government justify the extra costs as providing the necessary protection needed for those who lack the mental capacity to act for themselves. More straightforward and less expensive access paths to child trust funds are needed. Does the Minister agree that a more robust approach is now justified in dealing with the Mental Capacity Act?

[Lord Wolfson of Tredegar (Con)]

My Lords, the short answer is yes. We have put in place mechanisms on fees to ensure that anybody applying to the Court of Protection, in respect of a child trust fund only, does not have to pay any fees. I know that the court is looking at the forms to make sure that they are suitably accessible, so that one can fill them in and make an application without having to pay a solicitor.