Client, over 60, sold her property (on a commercial basis - not to a relative) and remains living there, with a life-long rent free lease. The purchase price is being paid by instalments of £419 pcm, with £58k outstanding.

There is an appeal hearing pending) - the LA considers that the monthly payment counts as income; I say that it counts as capital paid by instalments and therefore should only affect the total amount of our client’s capital. .

If she was under 60 I would accept that reg 31(1) of the 06 CTB regs would mean that the monthly payments would be treated as income. However, there is no equivalent regulation in the "over 60" version of the CTB regs: the definition of “income in reg 19(1) is a closed list.

Any thought will be welcome.

I think you are right, but am not certain this helps your client.

The effect of reg 41(1) of the 2006 (under 60) regs is to effectively transform capital that would otherwise make the claimant not entitled due to the capital limit into income.

In your client’s case the amount of capital is £58K, well over the capital limit so without this reg he/she wont qualify.

aand see this:

"Lillystone v SBC <1982> FLR 52 by way of example. To raise money for repairs to her house, a widow living on supplementary benefits sold her house for a capital sum payable by monthly instalments. It was contended (1) that these instalments took her income above the threshold for entitlement to benefit and/or (2) her capital resources were above the relevant threshold. This court held the latter to be so. Importantly for present purposes, however, was the holding that the regular payments of the capital were not income. Lord Denning MR said:

"Wien J was quite right in saying that the £70 a month could not be treated as income. He said: 'It is self-evidently a payment of capital by instalments.' That would be quite right."
And Oliver LJ said:

"Let me say straight away that I agree entirely with the judge that what this case is concerned with is capital and not income."
So in that case "that which came in" was not income."

which i quote from chandler v sec of state
http://www.bailii.org/ew/cases/EWCA/Civ/2007/1211.html