Terms & Conditions

[ralph]

We have a case where the claimant has stated that instead of receiving ongoing maintenance payments from her ex-partner, he’s agreed to pay her car loan of £125 per month plus all insurance, servicing and costs arising from MOT.

On 1st thought this comes under payments to a 3rd party per HBR42(6)(b).

However the Reg appears to state that this “income” can’t be taken into account.

Can we take it into account, or not?

[Anonymous]

Voluntary income, disregarded in full…?

[Anonymous]

Refer to previous thread…

https://hbinfo.org/forum/viewtopic.php?t=7038&highlight=maintainance

hope that helps.

[Anonymous]

It certainly helps where payment is [i:cd50971edb]due to be made[/i:cd50971edb] for maintenance…but there is, as Kevin pointed out, a rather obvious loophole.

[Anonymous]

If the ex-partner was giving the claimant the cash we would treat it as ‘maintenance received’.
If the claimant then decides to spend this maintenance on her car loan, etc.. then it would still be treated as ‘maintenance received’.

The fact that the ex-partner is removing a financial transaction.. i.e. he pays for ‘the car’, instead of her, [i:8dabac2a8d]should not[/i:8dabac2a8d] make a difference to how we treat it.

I’m sure the intention of the regulations (however badly written) was to [i:8dabac2a8d]not[/i:8dabac2a8d] allow ‘loopholes’ such as this to be exploited.

I would treat as ‘maintenance received’.

IMHO.

[Anonymous]

But the very reason why loopholes exist is because legislation is sometimes badly written, never mind what the intention actually was! I would expand further, but as Kevin also pointed out, this is a public forum, even if it is now subscription only.

[Kevin D]

Worse – there is another even more unpleasant loophole….. 😥

*sigh*

[Anonymous]

Perhaps these identified ‘loopholes’ should be collated and forwarded onto the ‘policy-makers’ so that the relevant legislation can be rectified in line with [i:fdebb0fee7]intended[/i:fdebb0fee7] policy…

[seanosul]

That is what our LA representatives are supposed to do. It is also the role of Ministers and the House to check legislation as it is passed (although much of our governing legislation is secondary and therefore goes unchecked). Some “loopholes” are intentional and thinking of the consequences of “closing” this one, I can see many reasons for not doing so.

Policy intentions are one thing, but as local authorities we must work to legislation as passed, not LA procedures, or what we believe legislation to be.

[ralph]

I put this case to Adelphi, and referred to a similar one where the claimant’s mortgage is being paid by her ex-partner, and have received the following reply (which, surprisingly for the Adelphi, is quite helpful):

[quote:592504434d]I think one of the starting points would be whether or not these payments can be classed as “maintenance” in which case they would be taken into account as income, apart from the £15 disregard. If you look at HB Sch 5 para 47, you may note that the scope of “maintenance” is relatively broad. The term is not defined, and the paragraph states that it applies to payments “whether under a court order or not”. I would argue that this allows a fairly generous everyday meaning to be applied to the term, so that when asked similar queries, I have said that an acceptable test may simply be whether the claimant regards it as a payment of, or made in lieu of, maintenance. In this particular case, another necessary precondition might be that the vehicle is the claimant’s own car, and that the ex-partner does not have any legal interest in it.

I also do not think there is anything in para 47 which limits its meaning to the items specified in HB Reg 42(6)(b) (which, as I’m sure you are aware, does not include mortgage payments.)

I have also previously argued that para 47 may be interpreted in a way to cover maintenance payments made to someone other than the intended beneficiary. The provision specifies the person who should make a qualifying payment, but does not specify that the payment has to be paid to the claimant (although admittedly this may be implied in all the income rules.) This may be a point open to legal question, although I don’t recall any challenge based on it. But the policy intention is clear – if a payment is regarded by the parents as a payment of maintenance, then the para 47 provisions can apply and the way in which the payment is made should not make any difference.

[I would also argue that if para 47 only applied to payments actually received by the claimant, in cases like this one there may be a need to consider the provisions of HB Reg 42(1) – deprivation of income. I know from my experience of similar provisions in child support that such cases can be problematic, because it can be difficult to establish whether a method of payment was specifically chosen to obtain a more favourable position. I would imagine that such cases could be equally contentious in HB – and perhaps the Reg 42(1) provisions should only be used in the most clear-cut cases.]

The one possible difficulty I can see with this case is deciding the amount which could be treated as maintenance, since it appears that these cannot be realistically foreseen. If an ex-partner has undertaken to pay the mortgage on a former matrimonial home or make other loan repayments, then it will be more or less clear from one period to the next what the amounts involved will be. But if in this case, the ex is paying for certain running costs, the amount to be treated as maintenance may depend on the condition or reliability of the vehicle. This could be problematic for the LA if the claimant were to keep coming to them asking for the latest bill to be given consideration. However, ultimately it will be for the decision maker to decide what should or should not count.[/quote:592504434d]

So we can quite happily take it as maintenance under HBR 40, so long as we disregard £15/week per Sched 5 para 47 🙂

[seanosul]

[quote:f6fcdb41e7=”ralph”]I put this case to Adelphi, and referred to a similar one where the claimant’s mortgage is being paid by her ex-partner, and have received the following reply (which, surprisingly for the Adelphi, is quite helpful):

[quote:f6fcdb41e7]I think one of the starting points would be whether or not these payments can be classed as “maintenance” in which case they would be taken into account as income, apart from the £15 disregard. If you look at HB Sch 5 para 47, you may note that the scope of “maintenance” is relatively broad. The term is not defined, and the paragraph states that it applies to payments “whether under a court order or not”. I would argue that this allows a fairly generous everyday meaning to be applied to the term, so that when asked similar queries, I have said that an acceptable test may simply be whether the claimant regards it as a payment of, or made in lieu of, maintenance. In this particular case, another necessary precondition might be that the vehicle is the claimant’s own car, and that the ex-partner does not have any legal interest in it.

I also do not think there is anything in para 47 which limits its meaning to the items specified in HB Reg 42(6)(b) (which, as I’m sure you are aware, does not include mortgage payments.)

I have also previously argued that para 47 may be interpreted in a way to cover maintenance payments made to someone other than the intended beneficiary. The provision specifies the person who should make a qualifying payment, but does not specify that the payment has to be paid to the claimant (although admittedly this may be implied in all the income rules.) This may be a point open to legal question, although I don’t recall any challenge based on it. But the policy intention is clear – if a payment is regarded by the parents as a payment of maintenance, then the para 47 provisions can apply and the way in which the payment is made should not make any difference.

[I would also argue that if para 47 only applied to payments actually received by the claimant, in cases like this one there may be a need to consider the provisions of HB Reg 42(1) – deprivation of income. I know from my experience of similar provisions in child support that such cases can be problematic, because it can be difficult to establish whether a method of payment was specifically chosen to obtain a more favourable position. I would imagine that such cases could be equally contentious in HB – and perhaps the Reg 42(1) provisions should only be used in the most clear-cut cases.]

The one possible difficulty I can see with this case is deciding the amount which could be treated as maintenance, since it appears that these cannot be realistically foreseen. If an ex-partner has undertaken to pay the mortgage on a former matrimonial home or make other loan repayments, then it will be more or less clear from one period to the next what the amounts involved will be. But if in this case, the ex is paying for certain running costs, the amount to be treated as maintenance may depend on the condition or reliability of the vehicle. This could be problematic for the LA if the claimant were to keep coming to them asking for the latest bill to be given consideration. However, ultimately it will be for the decision maker to decide what should or should not count.[/quote:f6fcdb41e7]

So we can quite happily take it as maintenance under HBR 40, so long as we disregard £15/week per Sched 5 para 47 :)[/quote:f6fcdb41e7]

Err what the DWP are suggesting is that they accept that maintenance not paid to a claimant is not their income but count it as such anyway and see if they challenge it legally. Hmmm. Not sure the role of Local Authorities is to decide whether to follow their own laws and wait until they are legally challenged.

[Kevin D]

Just a thought: If the arrangements to pay income are to avoid it being taken into account for HB/CTB, there is the small matter, potentially, of Notional Income……

Regards

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