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DLA for a child - claimant saved it for child’s future care. Does resultant capital belong to claimant or child?
My client saved her child’s DLA in order he could access care in the future if needed. The LA has created an overpayment of HB/CTB calculated on this excess capital. But does the DLA belong to the child or the parent?
Any thoughts?
Whose bank account is the money in?
and
If the capital is held in your clients account is the account used for any other purpose?
Has the capital all been accumulated from the regular DLA payments, or was some of it paid in a lump sum of arrears (and if so when paid)?
[ Edited: 18 Apr 2011 at 05:49 pm by Robert Haigh ]Don’t know if this will help or not.
Reg 43 SS(claims and payments) Regs 1987 as ammended sets out how DLA is paid to children. It basically says that the SoS can appoint someone to exercise the right the child may have and to receive and deal with any sums (very simpilstic version). It would appear to me to be a similar situation to if someone is unable to make a claim for themselves and appoints a third party to do it.
The question i found myself asking is, is the money the property of the child therefore and if so is the mother simply holding it on trust for the benefit of the child? If it is the property of the child and it is a trust then it would not be the mothers capital.
If it is (as asked above) being paid into one general account then it may be difficult to prove.
If anyone else has any thoughts on this please let us know
[ Edited: 18 Apr 2011 at 07:08 pm by Matthew Simpson ]I had a similar case, which I lost (sorry), but I think that was down to differences in Scottish law (trusts involving only two people should be in writing in Scotland) and that my client made no effort to separate the money from their own!
The money is clearly paid to the appointee (usually the parent) and is legally theirs not the childs, BUT the appointee could legitmately feel that the money should be kept in Trust for the child. I think that could be a constructive trust, which requires no formal trust deed
“A constructive trust arises by operation of law whenever the circumstances are such that it would be unconscionable for the owner of property (usually but not necessarily the legal estate) to assert his own beneficial interest in the property and deny the beneficial interest of another.”
(Paragon Finance v D.B. Thakerar & Co [1999] 1 All E.R. 400, 409a-b)
Where this argument will come unstuck is if money is pooled into the appointee’s account and not declared!
If the money is in a separate account, accruing interest to the benefit of the child, and if any withdrawals from that account can be demonstrated to be have been used for the benefit of the child and not the appointee, then it could be argued that it is held in trust even though no formal document exists to that effect
Where this argument will come unstuck is if money is pooled into the appointee’s account and not declared!
Just a couple of observations - one for the clmt; one against.
Against: once there is prima facie evidence that a person holds capital, the onus then switches to him/her to show it is not his/hers.
For: If the monies are beneficially owned by the clmt rather than the appointee (or if a trust argument is successful) AND the appointee/guardian already believed those to be the facts, there would be no excess capital to be notified - a duty to notify a change in circs is only engaged where the change is one the clmt (or appointee / guardian) might reasonably be expected to know was a change that might affect entitlement.
On the issue of whose it is first. I remember dealing with a DLA appeal where the claimant was a (very severely disabled small) child who had no recourse to public funds, but the father (a Gurkha) had indefinite leave to appeal and was getting child benefit. DLA was refused as it is public funds. Dad could claim ChB, as this was HIS benefit and he wasn’t subject to the public funds rule, but DLA was the child’s benefit and he was. Don’t know if that helps.
I would have said that an appointee is in the nature of a fiduciary, like a trustee, an attorney or a deputy in the Court of Protection, and I always understood that DWP like a separate bank account to be opened for the child’s benefit to be paid into so that it doesn’t get mixed with the appointee’s money.
On the constructive trusts point, if the DLA really is the child’s money but the appointee has been playing fast and loose with it, that would be a classic example of when a constructive trust would be imposed against the appointee, over his own property to the value of the misappropriated funds.
Surely ther must be some case law on this point - it can’t be the first time it has arisen. If the money really is the child’s, then the fact that Mum may have dipped into it for her own purposes doesn’t make it hers. That argument would work with money from another individual, but not with benefits . If I’‘m right.
Thank you for your responses - they are a great help,.
Wondering if any one has any experience of this or knows of any case law, as I have a similar case where the parent has saved up the child’s DLA in their own account to create a college fund for the child and the total in the account is now over the Capital Limit.