Terms & Conditions

[traceyf]

We have received a new claim where the applicant states she does not receive any maintence from her ex partner but he pays the mortgage for her of £550 per month. Do we include this as misc. income as she will get a disregard if we include it as maintenance
Thanks

[Stalbansbenefits]

[quote:7fbe7265ea] Any payment of income, other than a payment of income specified in paragraph (7), made—

(b) to a third party in respect of a single claimant or in respect of a member of the family (but not a member of the third party´s family) shall, where it is not a payment referred to in sub-paragraph (a), be treated as possessed by that single claimant or by that member [b:7fbe7265ea]to the extent that it is used for the food, household fuel or, subject to paragraph (13), rent or ordinary clothing or footwear[/b:7fbe7265ea], of that single claimant or, as the case may be, of any member of that family or is used for any council tax or water charges for which that claimant or member is liable;
[/quote:7fbe7265ea]

My view is that if the payment go straight to the mortgage lender, then it is [b:7fbe7265ea]not[/b:7fbe7265ea] counted as income [b:7fbe7265ea]or[/b:7fbe7265ea] maintenance . You will find where a claimant has a mortgage liability but receives maintenance directly, the CAB will often advise the claimant to ask their ex-partner to pay the mortgage instead in order to maximise their benefit entitlement.

[Kevin D]

Interesting post. It may (er, or may not) be of interest that I have previously successfully argued in a submission that the income is the claimant’s on the basis that it is actually her income; simply it is paid by an agent. However, a couple of caveats that may have distinguished it….

1) There was a court order clearly directing that the former partner must pay such sums that met the amount of mortgage due; irrespective of whether those sums were paid to the clmt, or directly to the Bank / Building Society.

2) The same court order clearly envisaged that the money(ies) for the mortgage formed [u:7e4346a731]part[/u:7e4346a731] of the overall maintenance award. The inference being that it was, in any case, maintenance.

[Kevin D]

I’ve bumped this thread up following a read of [b:1c4d4049fb]CIS/2317/2006[/b:1c4d4049fb].
http://www.osscsc.gov.uk/aspx/view.aspx?id=2070

In particular, I wonder if the principle(s?) in this have a wider application?

The CD was about an IS clmt who argued that as she physically received Child Ben, even though the award was to someone else, she must be treated as receiving that Child Ben. The purpose of the argument was to obtain higher applicable amounts by having children included in the claim. The Cmmr found that the Child Benefit belonged to the person it had actually been awarded to – it was not the income of the person actually receiving it.

[Anonymous]

This is a fairly common situation and I think it is overdue for a good piece of up to date case law that looks at the big picture.

I see two issues. The first is whether income that is nominally yours, but which in practice you do not see because it is deducted at source and paid to a third party, should be treated as yours. Particularly in the case of maintenance, this raises issues of double-counting and the social security scheme as a whole could claw back 170% of the income if both payer and payee are getting HB and CTB.

The second point is the list of items that count as notional income when someone else is paying your bills for you out of their money. I know some people think there is a loophole where mortgage payments are copncerned. My view is that mortgage payments are quite deliberately omitted from the HB and CTB list because they have nothing to do with the HB and CTB means test. By contrast, if you look at IS Reg 42 you will see that housing costs eligible for IS are included in the list of third party bills that count as notional income. The thinking here seems to be that for each benefit you will count as income any money that is used to pay for:

– the items provided for by the applicable amount, or
– in the case of HB and CTB, the thing that you are claiming help with

Note in particular the very carefully drafted definition of “rent”.

Payments by a third party direct to your mortgage lender are therefore not the claimant’s notional income … but there is still that messy issue I referred to earlier about such payments perhaps being the claimant’s income to start with – like in a case where there is a court order for £500 a month of maintenance but £300 goes direct to the mkortgage by private agreement between the parties.

Of course many CTB claimants with mortgages do not have someone paying their mortgage for them. These people are caught by a lacuna or absence of provision – if you work more than 16 hours a week you cannot get any help with your mortgage. Welfare rights commentators have long argued that mortgage payments should be included as a premium in the applicable amount for CTB, or there should be a corresponding income disregard, and that should go for shared ownership HB claims as well. But that’s not how it is yet … not until we all migrate to HMRC and start doing unified Housing Credit.

[Author]

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