Direct payments made by social services for community care are ignored for IS purposes. What do you do when you've got a couple, one of whom will recieve direct payments and will then use this payment to 'employ' his/her partner as a carer? How are these payments made to the carer treated for benefit purposes. My understanding is that for Carers Allowance they are treated as 'earnings' but how are they treated for IS and other means tested benefits?

I'm surprised that the LA are giving DPs to the disabled person to employ their partner as a carer. I don't think most LAs (nor, possibly, the Dept of Health) would be keen on that.

Still, if it happens, then the payments to the carer certainly are earnings. It should be specified in the DP agreement what the payments from the LA are for. It will be clear from the agreement that the disabled person will be employing the carer and ensuring tax and NI deductions (if the wage is high enough), plus making regular returns to the LA accounting for expenditure of the DPs, including, of course, wages paid.

Jim

From April 2003, direct payment can be used to pay spouse or relative even if they live in same household . D of H press release Jan 2004 'some councils are confused over the rules governing how individuals can use direct payments to pay close relatives....in exceptional circumstances, people can also use their direct payments to pay a relative who lives with them.'

Thanks for clearing that point up! I was living in the past, yet again. Clearly the present case constitutes exceptional circumstances.

Jim