Immediate Need Annuity

Hi.  Client in residential care and receiving PC since 2006. In 2007 family purchased an Immediate Needs Annuity also known as Immediate Need Care Fee Payment Plan but before proceeding checked with Pension Service who told them it would be ignored like a funeral plan and would not affect PC. They recently discovered that SDP was missing from PC award and was told they were due £13K arrears.  All good news until the accuracy team decided that no arrears were due and in fact PC should not have been paid at all since 2007.  Everything I have read confirms my general belief that annuities are counted as income but I can’t find anything specifically relating to this type of annuity.  Can anybody help me please?

... or you could provide information here that might be useful to others.  Isn’t that the idea?

If I do eventually find the answer to this, I will share it.  I have since discovered that this type of annuity appears to be exempt as far as HMRC are concerned but still can’t find anything relating to benefits.