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staying put

dizzymare
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HI

I am a little confused and am hoping that someone can clarify some information. I have just been asked a question relating to young people who are staying with former foster carers under the staying put scheme. In our area, payments will be made by the LA to the carer (under section 23C of the children’s act) so these payments will be disregarded if the carers themselves receive means tested benefits. However, the young person will make a payment from their own benefit towards the costs of meals etc and will claim HB for the rent (which is eligible under a licence agreement) the YP will be treated as a boarder.

Guidance for those under pension credit age is fairly clear that payments made from LA are disregarded if made under section 23 C and payments made for rent will be treated under board and lodging rules and therefore £20 disregarded and 50% of the balance will be treated as income. The confusion arises from the section relating to former carers who are over pension credit age and in receipt of means tested benefits.

This section below is taken from guidance for staying put arrangements from DfE, DWP and HMRC May 2013

“Carers who are receipt of Pension Credit where income from ‘Boarder’ arrangements are disregarded in calculating their entitlement to Pension Credit and Housing Benefit. In these circumstances young people claim Housing Benefit as a contribution towards the “Staying Put” arrangement for the rent element. The fact that there is a commercial arrangement is immaterial as those in receipt of Pension Credit have any income from a ’Boarder’ arrangement (“Staying Put”) disregarded”

However, I cant see that such payments are disregarded. What I am reading in CPAG and DMG implies that such payments are treated the same as for those under PC age.

Can anyone confirm this for me please? 

chacha
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dizzymare - 12 January 2017 03:19 PM

Guidance for those under pension credit age is fairly clear that payments made from LA are disregarded if made under section 23 C and payments made for rent will be treated under board and lodging rules and therefore £20 disregarded and 50% of the balance will be treated as income. The confusion arises from the section relating to former carers who are over pension credit age and in receipt of means tested benefits.

See Reg. 17B :  http://www.legislation.gov.uk/uksi/2002/1792/pdfs/uksi_20021792_300916_en.pdf

 

dizzymare
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HI ChaCha

Thank you for that. Forgive me if im wrong (and I may be) but I read that as saying that payments for board and lodgings are not treated as earnings for self employment (17B 4b) (even though for tax credit purposes, such an arrangement is treated as self employment)

They are however treated as other income under reg 15 (5e). The disregards of £20 plus 50% of the excess of this is shown in schedule 4 (8)

If this is correct and I am not missing anything, then income from board and lodgings falls to be treated in the same way as for working age claimants. I still cant see anything to say such payments are ignored as income for pension credit (of course, I may be missing something blindingly obvious)? I would be happy if you will point me in the right direction if I am

Gareth Morgan
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dizzymare
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Thanks Gareth

I have read the thread and also the guidance/document referred to for the staying put scheme. However, it is that particular guidance that has caused the confusion.

The staying put arrangements do allow the income paid by the LA to be disregarded for means tested benefits. In addition for tax and tax credit purposes, the former carer can be treated as in self employed (as with fostering)

“Children’s Services may therefore find it helpful to distinguish between broad groups of carers within their “Staying Put” Scheme, for example:
1. Carers who are not in receipt of any means tested benefit where setting a commercial rent and young people claiming Housing Benefit would not have an impact on the “Staying Put” carers. In these circumstances young people claim Housing Benefit as a contribution towards the “Staying Put” arrangement for the rent element. The fact that this is a commercial arrangement and the “Staying Put” carers receive part of the payment from section 23C and part from the young person, via contributions, or housing benefit is immaterial as the carer is not claiming any benefits.

2. Carers who are receipt of Pension Credit where income from ‘Boarder’ arrangements are disregarded in calculating their entitlement to Pension Credit and Housing Benefit. In these circumstances young people claim Housing Benefit as a contribution towards the “Staying Put” arrangement for the rent element. The fact that there is a commercial arrangement is immaterial as those in receipt of Pension Credit have any income from a ’Boarder’ arrangement (“Staying Put”) disregarded”
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/201015/Staying_Put_Guidance.pdf

However, everything that I have read to date Cpag P311 and SPC regs as denoted above indicate that where the arrangement is commercial (as it will be because there is a licence agreement) and board and lodgings are provided, that payment will be treated as an income subject to £20 disregard and 50% of the excess) whereas paragraph 2 of the staying put guidance (see above) states that the income is disregarded.

I am thankful that people are taking time to reply but I need to be sure of my answer as I don’t want to mislead people.

Gareth Morgan
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The guidance note does seem to have been written by someone with a ‘sketchy’ knowledge of benefits.  The paragraph, which hasn’t been quoted so far, may be the most illuminating.

“Pension Credits
Where the “Staying Put” carer is over the pension credit age (the pension credit entitlement age
is rising from 60 to 65 between 2010-2020) and is in receipt of Pension Credit more generous
disregard rules regarding income from ‘Boarder Arrangements’ apply and should be explored.
In practice, the whole amount paid (in respect of a ‘Boarder Arrangement’ to the carer in receipt
of Pension Credit is likely to be disregarded, regardless of the young person claiming Housing
Benefit and the source of the payment.”

I don’t recognise ‘more generous’ disregards and, I suspect, the phrasing “should be explored”, “in practice” and “likely to” are weasel words implying “somebody in a pub told me”.

dizzymare
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Sorry Gareth - thought I had quoted that (my brain was addled by it all yesterday)  you have made me laugh (and that is well needed after a day going round in circles with this) weasel words indeed.  I cannot find those more generous disregards either. (only as applies to non commercial arrangements is there a total disregard) and the fact that a licence agreement is signed makes it commercial as far as I am aware.  It is though quite worrying that this is a document to guide LA’s and others involved in staying put arrangements, that has been put together by three govt depts,  and contains misleading information.

I shall go with the rules as I see them and advise the £20 disregard and 50% of the excess (where meals are provided).

Thank you so much for your help and time

chacha
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dizzymare - 13 January 2017 11:48 AM

I shall go with the rules as I see them and advise the £20 disregard and 50% of the excess (where meals are provided).

Sorry, maybe I should have expanded on this a bit, the rent received from the boarder/lodger can be one of 2 things, earnings or unearned income.

If the former carer receives WTC (As is the case for most Staying put cases), it means the care leaver is not a bog standard boarder/lodger, so the income (*Rent* received) is disregarded as the LA responsible is deemed to have employed the former carer.

If that’s not the case, this means the care leaver is a bog standard boarder, then the disregard you have stated applies because it’s just normal income and not earnings.