Capital

I am currently advising a client on capital disregards.
I have read in the DRH that capital belonging to dependent children is disregarded.  Does this depend on how the capital is held?
For example if the capital is in an ISA which is locked away for the child until they are 18 then I am assuming this is disregarded because it cannot be accessed.
If it is in a normal child savings account does this still count as capital as the parent can still access and withdraw money from it ?
I cannot find the information in the regulations

The child’s capital isn’t really ‘disregarded’ as such. Capital which belongs to the child is not the claimants and therefore never factors into the calculation of benefit for UC at all. Certain legacy benefits are affected to a limited extent by dependent child’s capital.

For social security purposes, what is important is who holds the beneficial interest in the asset involved - the nature of the specific instrument is not particularly crucial. The person with the beneficial interest is, in principle at least, entitled to benefit from the money and can therefore be expected to apply it to meeting their own expenses before coming to rely on state support. If you are not the beneficial owner of the funds, you are not entitled to use them to meeting your own expenses so they aren’t relevant.

If you are talking about something which has been set up and advertised by a mainstream bank as being a junior account, then almost certainly that is sufficient to establish that the child holds the beneficial interest in the account, so I would think that in either of the scenarios you provide the capital is the child’s and would be ignored. At the other end of the scale, if the parent has just put some money away and asserts that this is to buy the child a car at some later date, that is unlikely to be sufficient to establish a change in the beneficial ownership.

One thing which is worth noting is that deprivation of capital is still relevant, so if the claimant has been paying into the account before making their claim, they can expect to be asked to explain this.

Another thing to be aware of is that income from the child’s capital may be taxed on the parent (if the parent gifted the capital to the child). In that case the income will count as unearned income for the parent for UC purposes.