URGENT DILEMMA _ Can care charges be refunded without affecting individual’s Income Support entitlement…............?

A situation may have arisen where a refund of care costs may be due to a client currently receiving Income Support and the ‘refund’ is highly likely to be in significant excess of the 16K capital limit.

As the refund is not a benefit arrears payment there is significant concern any such payment will have a detrimental impact on client’s IS claim as DWP likely to treat as capital from date of payment.

A Local Government ombudsman report regarding a similar situation in Bradford states as follows:

‘the payment for Mr A recommended….....should be administered by Mr H and made in such a way as to ensure Mr A does not lose any of his welfare benefits. this should be possible by a ring-fenced account being set up by the Council that Mr H can draw on when needed.’

My concern is that DWP may well view such an arrangement as being a deliberate attempt to manipulate the system…............however duty of care to client means that they should surely not be disadvantaged through circumstances beyond their control…...??

All thoughts/suggestions/advice appreciated

If it is a third party who decides to arrange the resources such that the claimant’s benefit is not affected, and the claimant does not ask them to do so and couldn’t reasonably prevent their control of the arrangements, then I don’t see how the claimant himself can be found to have deliberately deprived himself of capital?

As I understand it, the general test is of the claimant’s decisions, not anyone else’s..

It isn’t deprivation if the client didn’t have the money in the first place. It isn’t deprivation if, in this case, the local authority decides not to pay him/her directly what s/he is owed.

However, it sounds as though the client in this case has a legal right to repayment of the charges and I don’t think it is the role of the local authority to dress up its obligations and attempt to disguise the money it should pay in some way. My own personal view is that the local authority should consider not only paying what is owed, directly to the person to whom the money is owed, but also assessing further payment(s) to recompense the client for any subsequent loss. It all originates from the original error in over charging.

In truth, this is a similar situation to the banks paying compensation for wrongly sold loan insurance. If that sum affects a client’s benefit, unfortunately that is what it does