Mental Capacity Assessment Around Finances | Example

A person’s ability to make specific decisions may be referred to as mental capacity.

So what does a good capacity assessment look like?

Mental Capacity Assessment Report around Finances| Example

In this example capacity assessment around finances, I will show the common features of a report on an assessment of capacity around finances.

However, the one you write for a service user or client is likely to be much more detailed depending on individual circumstances.

Questions you may ask may also differ. 

In social work practice, we refer to a law – the Mental Capacity Act (MCA) 2005 when assessing a person’s ability to make certain decisions.

mental capacity assessments on finances

So what is the Mental Capacity Act (2005)?

As a decision support tool, the Act provides a framework to empower and protect people who may lack capacity to make some decisions for themselves.

For those who have capacity now, there are provisions in this Act to support them make plans for a time when they may not have the capacity to make decisions. 

The MCA 2005 is used alongside the Code of Practice.

What is the Mental Capacity Act Code of Practice?

The Mental Capacity Act Code of Practice provides guidance on how the Act should work in practice.

It describes the responsibilities of individuals who sue the Act such as ‘assessors’, ‘decision makers’ ‘advocates’

While referring to the MCA 2005 in assessments, it is important for social workers to remember the 5 principles underpinning the Mental Capacity Act.

Section 1 of the MCA 2005 reminds us that;

1. We must begin by assuming that people have the capacity to make a specific decision
“A person must be assumed to have capacity unless it is established that he/she lacks capacity.”

2. People must be supported to make decisions.
“A person is not to be treated as unable to make a decision unless all practicable steps to help him/her to do so have been taken without success.”

3. Unwise decisions do not necessarily mean lack of capacity
“A person is not to be treated as unable to make a decision merely because he/she makes an unwise decision.”

4. Decisions must be taken in the person’s best interests
“An act done, or decision made under this Act for or on behalf of a person who lacks capacity must be done, or made, in his/her best interests.”

5. Consider whether the decision can be made in a way that is less restrictive of the person’s freedom
“Before the act is done, or the decision is made, regard must be had to whether the purpose for which it is needed can be as effectively achieved in a way that is less restrictive of the person’s rights and freedom of action.”

Social workers assess capacity around specific decisions.

These may include;

  • Capacity around finances
  • Capacity to revoke a Lasting Power of Attorney
  • Capacity to appoint a Lasting Power of Attorney
  • Capacity to make a Will

As with any decision, those relating to a service user or client’s  finances must be assessed by a social worker if there are concerns.

  • The example below is an illustration of how you may write up your own capacity assessment around finances.
  • Please note that this is not a real case scenario.

In addition, you should refer to your own organisation’s policies and the Act itself when writing your own assessments.

Mental Capacity Assessment Around Finances Template

Background information of individual

Medical records indicate that P suffers from an acquired brain injury and stroke.

He currently lives in supported accommodation with a carer coming in once a day for 2 hours to support with his personal care and nutrition.

Carer and family member recently expressed concerns around P’s ability to manage his own finances.

 What triggered this assessment?

Concerns from carer and family with regards to P not

  • Being on the right benefits
  • Not having a bank account
  • Not having direct debits set up

What is the specific decision?

The decision to be made at this time is whether P can manage his own finances.

What practicable steps have been taken to enable and support the person to participate in the decision-making process? 

  • Support worker present.
  • Advocate.
  • Family member to support.
  • Assessment carried out in P’s home and at a time he preferred.
Functional Test

Is the individual able to understand the relevant information?

P’s social worker and I met with him at his home address. I explained that we are there to have a chat about money, and his understanding of money.

P said “money buys things. I go to the post office, put my card in, I can’t remember my PIN, I want to know how much I’ve got; I want to be aware of how much is in the account”

P went on to explain, “I had a bank account, because of this stroke I had something going on with the account, so I cancelled it. I’m not sure if the bank has completely stopped. I had problems with wages going in/out”.

It was explained to P that money is used to buy things, pay bills, and when you haven’t got money, you struggle in life.

It is important to manage money well. Sometimes things happen to us which affects our ability to manage our own money.

P responded, “that’s why I stopped the bank and went to the post office. They keep my money safe”.


P is able to understand the basic concepts about money and the mechanics in relation to money.

In my opinion, P understands information in relation to his finances.

Is the individual able to retain the information long enough to make the decision?

P was shown the following coins and asked to say the value; £2, £1, 50p, 20p, 2p and a £5 note.

P was able to say the value accurately.

He added, “there’s no point asking me this, I know money”.

P said he had some old pound coins and “they’re not valid anymore”.

P was then asked if he had a £5 note, and was in a shop buying an item for £2.10, how much change

would he expect?

P replied, “£2.90”.

He was then asked if he had £1, and bought milk for 75p, how much change would you expect?

P replied 25p.

P was asked that if he had £10 and wanted to go out with friends but had a bill to pay, what he would do.

P said, “I’d have to stay in so I could pay my bill. I had direct debits set up at the bank, it’s another reason I check the balance. I don’t remember how much money I have from one week to the next. I can’t keep track of money”.

P was asked who pays for the carers who support him.

P said, “it’s who pays for my benefits, paying for the carer, the dole, the council, the NHS. If it wasn’t coming in, she wouldn’t be here”.

P was asked, “do you understand why I’m asking you questions?”

P said, “yes, you want to have an idea of my understanding around money to buy things.

If I want a loaf of bread, I need money. I can’t deal with the complicated bit. I smoke, so they leave money in the purse. It used to be £2 for fags, now it’s £10 for 20 fags, you’re having a laugh”.

P was asked, if it costs £10 for 20 fags, how much does one cost?

He said, “It’s hard for me to work out, I can’t figure out how old I am. This fag business. Hold on a minute, let me work it out in my head. 50p.”


P was able to retain the reason why we were carrying out this assessment.

He was able to tell us what he would use his money for and the fact that he does not have enough money in his account.

He had a general idea of where his money comes from.

In my view, P is able to retain information in relation to his finances.

Is the individual able to retain the information long enough to make the decision?


Want the full capacity assessment report on P’s finances?

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