child care costs -amount to take into account

Hi
In HB can you confirn the amount of child care costs that should be taken into account. I assumed it was the amount being charged by the child care provider (up to the £175 /£300 limit) and not the amount being paid by the claimant. In this case the claimant is being charged say £100 per week but has not been paying her bill in full and has arrears with the child care provided.
The LA have deemed that only the monies paid by her can be disregarded e.g. only paid £20 towards the bil of £100 so that is all they will allow?

This does not seem correct to me?

Any further opinions?

Thanks
Alan

Hi Alan,

I think that the Local Authority have got this one wrong. Reg 27(c) of the HB Regs 2006 governs the calculation of income and provides for “any relevant child care charges to which Reg 28 (treatment of child care charges) applies, to be deducted from a claimant’s average weekly income. Reg 28 then deals with the treatment of child care charges and goes on to list the categories of claimants who are eligible to have child care charges deducted from their weekly income up to the maximum weekly amount.

Reg 28(1) states that “This regulation applies where a claimant is incurring relevant child care charges…”
From what you have said your client is incurring £100 pw in child care charges, i.e. she is liable for the full charge, but is only paying a lower amount of £20 presumably because that is all she can afford to pay at the moment. Now the Regs talk about the eligible amount to be deducted from earnings as the amount that is incurred, not the amount that is actually paid. She will still be incurring costs of £100 p.w. even though she is only paying £20.

I suppose if this arrangement has continued for some time with your client only paying £20 pw then the LA might deem that to be the contractual amount that has been eventually accepted by the childcare provider and made a decision on that basis. That would be unusual though as presumably the childcare provider will have a normal hourly rate and £20 is a bit different to £100!

The Local Authority appears to have deemed that the child care charges are eligible charges as they have allowed the £20 that she is paying as an eligible disregard, whereas they could have decided that the childcare charges were not eligible at all and not allowed any disregard in this respect.

Even if they have averaged the charges over a longer period of up to a year to arrive at a more accurate estimate, according to the Regs it is the charges that should be averaged not the amount that the client is actually paying towards those charges. There is no discretion afforded to the LA, as far as I am aware, to use a different amount than the charges that the care provider specifies are applicable to the childcare arrangements in place.
The only qualification that appears in the Regs with regard to payment of child care charges is that “the charges must be paid by the claimant or by the claimant’s partner”. It does not specify whether the charges that must be paid are the full charges in order for them to be eligible, as presumably the issue of payment or non payment of such charges is a matter for the child care provider to address with the parent, not for the LA. They simply decide whether they are relevant childcare charges that are eligible to be disregarded from weekly income.

The only thought that has crossed my mind is whether the LA have just allowed the higher standard earnings disregard of £20 and have knocked back the childcare disregard altogether or simply not taken it into account. This needs to be clarified. It could just be coincidental that she happens to be paying £20 pw towards child care charges at the moment?

I hope this helps.

Mark