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Estrangement rules (Reg.13(2)(d), IS Regs) require young people to be estranged both from parents and from "anyone acting in place of parents". By claiming CHB the 'family acquaintance' has in effect said they are acting in place of the parents. Hence the IS refusal. 'Living within a family unit' is something of a gloss on the actual rules but in essence is saying the same thing. The EMA award doesn't say anything by itself since it could have been based on the family acquaintance's circumstances and in any event doesn't affect the benefit decisions.
Suggest the young people and the family acquaintance need to decide how they want to play it. EITHER the acquaintance claims CHB, and CTC if their income is low enough, OR withdraw the CHB claims, set up a more commercial arrangement (which could even involve charging a rent and the young people claiming HB) and resubmit IS claims. Best option will depend partly on the relationships involved (is the acquaintance looking for, and do the young people accept them having, quasi-parental responsibilities, or not) partly on a better off calculation which will depend on the acquaintance's income and other circumstances. Obviously, given the way things have started there will be a credibility problem with changing it now. But they can't do it both ways.
Richard Atkinson
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