Special guardianship allowance and Tax Credits - is it either/or?

Client is in receipt of a Special Guardianship Allowance from the LA for her grandson who lives with her.  Until August she was also in receipt of Tax Credits.  Her payments were stopped because of a failure to return the Annual Declaration.

Today we called the intermediary line to complete the Declaration and I was advised although the payments did not count as income for tax credits she could not receive both so has been overpaid TC

I hurriedly got off the phone (citing a need to check some numbers!) so I could look into it but now I can’t see what stops her receiving both, although I understand the LA will take her benefit into account when deciding her allowance.

This suggests there is no issue - 
http://revenuebenefits.org.uk/tax-credits/guidance/how-do-tax-credits-work/special-circumstances/foster-carers/

Thanks in advance

You are right that there is nothing preventing someone getting tax credits for children under a special guardianship order, that the tax credits will be treated as income when LA assesses special guardianship payments and that special guardianship payments are disregarded for tax credits

Whoever, you spoke to was confusing special guardianship with fostering.

Tony