Can anyone enlighten me about what happens if the claimants 16th birthday comes while they are in hospital, does the DLA stop 84 days after the admission date or 28 days after the sixteenth birthday?

I would suggest that it would be 28 days from admittance to hospital. My reasoning as far as it goes would be that up until his or her 16th birthday the disregard would be as you say 84 days. From the age of 16 the disregard is 28 days. However there doesn't seem to be any provision ignoring the earlier period in hospital so that the two periods would be linked.

See regulation 10 SS(DLA) regulations 1991

for example, If the young person was in hospital for 60 days on their 16th birthday then those first 59 days would have been disregarded and from the 16th birthday DLA stops.Because the linked periods in care past the 16th birthday is greater than 28 days.

I would of course be happy to be wrong.

Thanks for the advice, I think you are right, Reg10(2) says that the 84 days only applies to a person 'who has not attained the age of 16 years for the first 84 days' so this would exclude someone whose birthday came within the 84 days.