substantial minority carer in the same household? 

We have granmother, daughter and grandaughter who live at the same address. Gran receiving CTC for grandaughter and JSA ( CB)  Mother receives Child benefit and income support as a lone parent of child under 5 for daughter.  Gran receiving CTC came from when she was working to qualify for WTC at 16 hours.
Gran lost job in May and submitted claim for JSA and qualified for JSA ( CB). HB did not make a decision on the claim until 17th of September and CTC are being treated as excess income. This is creating a significant shortfall in HB and family already in arrears.
I have had conflicting advice but grandmother as far as I can see can not qualify for an ammount in her HB for grandchild because babies mum recives IS and CB and baby is part of her mothers “household” It looks to me like the family are in practise one household and budget, cook, shop, plan childcare together. However,  I am concerned if I push the point this is one household that mothers income support might be affected.
I wandered whether anyone has any experience of this situation and if this is likely outcome?  I dont know if its clutching at straws but if the mother reciving Child Benefit and Income support means the child is preclused from being in another hosushold would it be possible to argue that the gran should qualify for Hb for the child as a substantial minority carer?

The HB Regs are not terribly clear about the proper approach to means-testing in this kind of case: Reg 20 relies on Child Benefit as the “tie-breaker” when there is uncertainty about which “household” the child lives in, but that doesn’t provide an adequate answer when there is only one household.

I think if the Regs are applied literally the grandmother should have the granddaughter included as a dependant (which would mean her applicable amount includes allowances for the child) on the basis that the child is “normally living with” her and does not belong to any other “household”, despite the fact that the child’s mother gets Child Benefit.  Even if the CTC claim switched to the daughter I think that would still be the case actually. Reg 20(3) says that a child can only be the responsibility of one person “for the purpose of these Regulations” (i.e. can only be included as a dependant on one HB claim), but as for who that one person is ... well I can see no reason why it isn’t the grandmother here.

The counter-argument would be that the child is not “living with” the grandmother even though it belongs to her “household”.

It is clearly perverse to have a situation where CTC is taken into account as income but no allowance is made for the child.  I would be interested to hear the Council’s legal argument for arriving at this conclusion - have you requested a statement of reasons for the decision?

Thanks for the reply. I have not requested a statement of reason for the decision but will go ahead and do this today. There have been a lot of issues with delay in decision letters and tenant stated she only received HB award letters re the decisioons last week when they said they were dated 17/09/14 so the first time I saw formal decision was last week.