Court order payment to a child

My client’s partner died in a car accident. The case has settled and a sum of money has been paid by the insurer to the client’s child for loss of her father. Would it be possible to pay a regular sum of money to the child from the court, through my client, without it affecting her benefits? The money would be for holidays, clothes, treats etc? Would this be disregarded as the money is for the benefit of the child and not the parent. If not, could it be claimed that the money is child maintenance and should be disregarded as income?

Has anyone got any thoughts on this?

Thanks

not particularly re effect on benefits,  would have to check out rules etc re child’s money in relation to parent’s claims, have no doubt there are some somewhere…..

but an application can always be made to court for payment out of a specified sum for a specified purpose .. e.g., if child needs a computer for school or whatever….the solicitor should be able to advise about this…

Can’t be too precise on these details but as I see it, as the fund is the child’s, any payment’s from it should be accepted as the child’s even if directed through the mother. The general rule is that a child’s income or capital is not counted for universal credit and legacy benefits / tax credits (although it may be counted as income under certain conditions if the parent still has child amounts in their IS or JSA).

Even with the mother receiving payments from the court, as long as she has a clear record these are intended for her child, she should then in turn be accepted as acting as a trustee for the money for the child (maybe worth setting up a child account with her as trustee to make it easier to show DWP / HMRC this is, and remains her child’s income). Even if there was a question about whose money it was, if payments are coming from a discretionary trust, income is ignored normally as voluntary income for IS, ESA, JSA and HB anyway, although can be taken account of for universal credit.

The CPAG handbook at p356 onwards has a useful summary of trusts and how payments impact on benefits.

Thank you for the replies. I had already recommended setting up an account for the child. The reason I don’t want to advise them to go back to the court each time they want to purchase something is because of the cost.

Any thoughts on the child maintenance idea, just in case they become awkward?

This all makes me quite uneasy. I don’t have any particular expertise in this area but my recollection is that where any sort of sizable settlement is obtained for a child it is paid into court with the general idea being that nobody touches it until the child is 18.

Claire might correct me on this, but my understanding would be that the parent isn’t supposed to be able to access this money to pay for “holidays, clothes, treats etc” or just as some sort of general maintenance fund. The money is there for the benefit of the child when he reaches adulthood - not to pay for odds and ends.

(I believe as well that there have been plenty of cases where a child has reached adulthood and sued their parents for misapplying these sorts of funds.)

If the client’s solicitor thinks they can obtain some sort of regular payment from the Court, then more power to them. However, it wouldn’t be disregarded as maintenance because there isn’t a liable relative involved. 

The main way to have it disregarded would seem to be to have it paid over into a discretionary trust for the benefit of the child from which appropriate purchases could be made as per Stuart. I think it would be absolutely essential to keep this money separate and to keep scrupulous records of every last thing purchased with this money. Your client would be under a fiduciary duty to apply these funds strictly in the interests of the child.

only time a court will allow funds to be paid out it for a specific purpose, for instance

1. if child needs a computer for school/educational purposes
2. a holiday, but not a routine every day family holiday

or something along those lines where the benefit of the expenditure can be defined in terms of the child’s needs.

a fund in court from a PI award is not for general care costs, unless the injury was such that there were going to be general care costs going forward as a result of the particular injury.  and if that were so, there would have been defined care and probably a care manager…..

it is not for general day to day maintenance