The legal context surrounding the management of client funds

The Guardianship, Protection Order and Mentoring (Amendment) Act

Following some abuses in the healthcare sector, where client funds were lost through bankruptcies, the government has tightened the rules for managing client funds. The law changes receivership, protective guardianship and mentorship.
An important rule of thumb is that the client's assets remain strictly separated from organisation and there is adequate supervision of this. The Guardianship, Protection Guardianship and Mentoring (Amendment) Act ensures that this is monitored.
The tasks of a care institution often extend far beyond client care. Financial tasks are often involved as well, when the client is unable to do this himself. As a client often has several sources of income, these need to be managed properly.
The managing client funds can range from providing pocket money to budget management, legal support or even guardianship.
To separate the actual care from the financial care, the management activities can be transferred to a legal entity. Who also knows the in's and out's of Act amending guardianship, protective guardianship and mentorship.
Many organisations choose to work with a so-called management foundation. This separates management and supervision from its own organisation. Any healthcare organisation offering management services for client funds will need to discuss its practices extensively with a legal adviser and have them reviewed regularly.
This will ensure that all necessary permissions for management and any necessary exemptions are organised in time.

The Guardianship, Protection Order and Mentoring (Amendment) Act

While a management foundation should, in principle, have the right (legal) capacity to handle all this, it turns out that there is still a need for tightening up to protect vulnerable adults financially.
A law has therefore been passed to give extra protection to people who can no longer take care of themselves, such as psychiatric patients or the elderly. The cantonal judge can also appoint someone to represent the client's interests on request.
With the Guardianship, protective guardianship and mentorship amendment act, which came into force in January 2014, the government wants to prevent people with disabilities from getting into financial difficulties.
Administrators have regularly gone wrong in the past, which was a major reason for the passing of this law. At the time, it involved the bankruptcy of a protection administrator, which highlighted the need and set up additional quality requirements.
The quality requirements mainly concern the set-up of the organisation and the establishment of procedures in an organisation. The primary aim of the legislative amendment is to ensure that people who are insufficiently self-reliant receive even more financial protection. The amendment is based on the following principles:
❯ It promotes client self-reliance;
❯ Those involved in the immediate area are supported;
❯ Legal representatives are checked for quality.
Unfortunately, things have gone wrong again recently. In 2019, many clients have again suffered and lost thousands of euros due to the bankruptcy of an administrator.
With the legal protection measures, effective steps have been taken in recent years to achieve the intended goals. Nevertheless, there is always room for improvement.
Therefore, there are still a number of challenges to optimise the operation of the laws and regulations surrounding guardianship, protective guardianship and mentoring.

New bill in 2019

Following a evaluation report in 2019, a new bill has been introduced to strengthen the Guardianship, Protection Guardianship and Mentoring Amendment Act. The new draft law on advisory rights Namely, it gives municipalities the right to advise the court on whether guardianship is needed for a client.
Often, municipalities are now unaware when the court is asked to institute debt management. This is crazy because they do have a responsibility to properly support clients facing debt.
By now giving municipalities advisory rights, they are trying to nip this in the bud. From now on, when debt administration is applied for, all parties involved will be informed.

More grip and control as an administrator

The daily work as a guardian consists of many different activities: contact and advice towards the client, processing client data and arranging all financial matters.
The financial part involves various calculations, such as the amount to be left free (also called living allowance or pocket money), the repayment capacity of any debts, checks and payment proposals.
To keep a grip on all client funds, it is important to have sufficient insight into all income sources.
The above legal context provides some guidance on how to properly organise around client funds. The practical problems, such as the organisation of cash and less administrative burden, can be addressed with the help of SimpledCard.
With SimpledCard, each client can have their own payment card, on which preset budgets can be put.
Client and administrator always have real-time visibility of expenses, and the administrative burden of working with cash will be drastically reduced. This can be a big leap forward in organising client funds.

Key key points in managing client funds:

1. Ensure strictly separate cash flows from the client and organisation;
2. Have management services regularly checked by a legal advisor;
3. Work with insightful reports for each client so that they can be submitted to the court;
4. It is about other people's money. Make sure its management is always correct, traceable and reliable.

Contact one of our financial experts for more information on the Guardianship, Protective Guardianship and Mentoring Amendment Act.
We will answer your questions and jointly identify your needs and help to find the best set-up of a modern client money card system.