Terms & Conditions

[Anonymous]

I have an appeal regarding use of foster payments as income in a CTB case. The applicant receives payment from an independant fostering provider (it’s not a voluntary organisation) but is arguing that the children are in the care of a local authority and the payment he receives via the provider is from the LA and should be disregarded.

We don’t agree and have used the payments in full – can anyine give me any caselaw or guidance to help?

[aeverard]

We have a very similar case and have been to Appeal Tribunal. Our Council solicitor is very happy the £31,500 pa income from fostering is not being paid by a Local Authority so it cannot be disregarded under the regulations as the bank statements show it going into the bank accounts from the private limited company fostering agency not a local authority.

The Tribunal, however, decided that the income must be derived from local authorities but there is no evidence to support this so we have requested a Statement of Reasons, requested the customer to provide copies of the agency agreements so we can see who are actually the parties to the fostering contracts (which the customer says we cannot see as it would breach the Children’s Act) and we are in the process of contacting the DWP for policy advice. Our solicitor is keen to see the Tribunal’s reasoning as she is very sure she can take this to the Social Security Commissioners as she just cannot agree with the Tribunal’s findings at this time.

At this stage we have evidence from the private fostering agency that they work under the ‘aegis’ of local authorities but this could just mean they are supervised by social services which applies to all types of fostering arrangements including private fostering arrangements. It does not mean the children are actually in social services care or being placed by local authorities and funded by local authorities. The fostering income to the CTB claimant comes from a private company. The Tribunal Chair said during the hearing that she thought it unlikely that the private fostering agency was funding these payments from its own profits. This seems a bit of a leap of faith due to the lack of documentary evidence to support this view. The Tribunal was advised of our legal advisor’s opinion and she advised the claimant that it would be helpful if the documents regarding the fostering arrangements could be disclosed to the Council as it could prevent a further appeal to the Commissioners.

We know that the fostering is temporary in nature and is for respite care over weekends and school holidays. As we have no documents from the foster carers in this case we cannot see if the payments are definitely derived from local authorities for the purposes specified in the regulations so can be disregarded.

HMRC have applied the fostering exemption to the self-employed accounts submitted via the foster carer’s accountants. This means that only £100 of the £31,500 pa income from fostering is actually taxable income. There is no provision in the CTB regulations to calculate income tax and NINO on this fostering exemption basis for CTB.

We decided to treat the income as self-employed income and apply the two-thirds disregard for child care (as it was impossible to work out true self-employment expenses) and then work out the tax and national insurance on the remainder. Unfortunately the customer still did not qualify for any benefit. Hence the appeal.

If anyone else has knowledge of this type of private fostering companies and agencies please share your experience.

[Kevin D]

Nothing to add to the issue of the foster payments, but a tangent springs to mind relating to evidence.

If the clmt fails to provide evidence reasonably requested in order to make a decision, the LA is entitled to draw inferences and the clmt may well get less benefit than if the evidence is provided. The test is not (normally) whether a clmt can supply the evidence; it is what is (reasonably) needed to establish entitlement. This approach was confirmed in [b:29ae6a7011]CH/4688/2003 (para 11)[/b:29ae6a7011].

new.hbinfo.org.com/comdecs/ch_4688_2003.doc

In any case, in aeverard’s case, I’m hugely sceptical that the Children’s Act can successfully be used in this scenario. Sounds like deliberate obstruction in an attempt to stop the facts being established.

Regards

[david kearney]

We’ve got one of these now. At intervention, credits picked up which turn out to be foster payments from a private fostering agency (not a charitable organisation) which have been in payment for some years. Neither the payments nor the accounts they were paid into had been previously declared, so no question that if there is an op the cust contributed to it.

Seeking advice from the adelphi and the fostering agency have referred to their legal team but I really can’t see how these payments can be disregarded under reg 26. (whatever aegis’s the payments might have been made under)

26. Any payment made by a local authority to the claimant with whom a person is accommodated by virtue of arrangements made under section 23(2)(a) of the Children Act 1989 or, as the case may be, section 26 of the Children (Scotland) Act 1995(a) or by a voluntary organisation under section 59(1)(a) of the Children Act 1989 or by a local authority under regulation 9 of the Fostering of Children (Scotland) Regulations 1996 (payment of allowances).

Which doesnt seem to give any latitude to ignore payments from a private organisation. Is there any caselaw on this issue? Thoughts from the other side (stainsby/mr bowman) will also be much appreciated

[trace2.0]

Hello,

 

Does anyone have anything to add to this thread regarding self-employed foster parents paid via an agency.

I have such a case and need to know whether the payments are disregarded in full or to apply the two-thirds disregard.

 

Many thanks,

[Kay_Tade]

Disregard in full, as long as the LA conditions are met by the "agency", they will get WTC which is taken into account.

 

https://hbinfo.org/forums/topics/foster-carers-0

 

https://hbinfo.org/legislation/main-regulations/regulations/regulation-28-earnings-self-employed-earners

[trace2.0]

Many thanks,

You are a star!

[Author]

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