Hi,

I’ve been looking into payments made to carers as part of a personal budget under The Carers and Disabled Children Act 2000.

An example would be a carer who is given money by the LA specifically to buy a washing machine, a computer or to pay for gym membership.

All the info I can find (mainly various LAs websites) states confidently that any of these payments made to carers will not affect benefits. But looking at the regs I can’t find anything to confirm this.

The IS regs specifically list types of payments that are disregarded and don’t include this 2000 act. The DMG tells DMs to look at what legislation the LA is paying the money under before deciding to disregard.

Any one got any ideas?

thanks

Jane

I can't see it either, but as it is one-off payments it looks a lot more like capital than income in the hands of the recipient.

My gut feeling is that you may looking at a resulting trust sort of scenarion (a real Quistclose v Barclays Bank case, which DWP never understand). In other words the money is paid to the carer on the express terms that it is used for a specific purpose and cannot be used for anything else: that if it is not so used within X months it is repayable. Is that so?
If so, then the payee does not have the right to the money except for that purpose and will hold it on what is called a "resulting trust" - meaning that the equitable interest in the property "bounces back" (same root as "resilient") to the donor if they do not so use it.

Quistclose itself was a commercial case about money lent for a particular purpose: when the borrower went into liquidation the question was whether the unspent loan was to be treated as part of the borrower's assets and could thus be used to pay out to all the creditors, or whether the lender was entitled to get the lot back. The Court found on the express terms of the agreement that it was the latter, on the basis of the principle of resulting trusts.

Now how many of you knew what that case - which is referred to, totally irrelevantly, in every overpayment-due-to-excess-capital submission - was actually authority for?

Hi

Section 5 of the above 2000 Act amended the Community Care (Direct Payments) Act 1996 to have these payments to carers counted as Direct Payments. They are disregarded for Income Support under para 58 of Schedule 9. Again the Health and Social Care Act 2001also amended the 96 Act and they are disregard as capital under para 67 of Schedule 10.

Shaun

Hi

Replying to myself. I've looked at latest consolidated version of the blue volumes and for both income and capital disregards they now refer to the Health and Social Care Act 2001.

Shaun

Thu 22-Apr-10 12:46 PM by nevip

I posted this in a discussion on here several years ago.

"Quistclose Investments LtD v Barclays Bank (1970) House of Lords.

Rolls Razor LtD had a £484,000 overdraft with Barclays Bank. However it needed to borrow a further £210,000 in order to pay dividends to share holders. Rolls Razor borrowed this money from Quistclose Investments with the express provision that it was to be used solely for the purpose of paying the dividends. Rolls Razor then deposited the money in a special account with Barclays separate from the company’s main business account. However Rolls Razor went into liquidation before paying the dividends. Then Barclays held the money and used it to reduce Rolls Razor’s overdraft.

Held:

Until the purpose of the loan was carried out then Rolls Razor held the money on trust for Quistclose Investments. Thus the money could never become part of Rolls Razor’s resources and therefore Barclays Bank, as a creditor of Rolls Razor, could not lay claim to it. Consequently the money had to be returned to Quistclose Investments.

Note, the fact that the money was held in a separate account was conclusive in this case but subsequent cases have held that there is no requirement for the money to be held separately as long as the intention behind the loan or gift is clear.

Thus the principle established in the Quistclose case is clear for Social Security law. Because a gift or loan advanced in such circumstances is held on trust for the lender/donor until its purpose is carried out then it is never part of the claimant’s resources and thus the claimant cannot possess it.

I would argue that each payment was impressed with a trust".

Thanks everyone. You are as always a mine of valuable information.