I am not sure that the Hockenjos case is what you need to look at in this case.
There are a number of situations where the parents have agreed for whatever reason that the father for example can continue to receive the Child Benefit, but that the children remain with the mother for most of the week. Not being in receipt of Child benefit is not a good enough reason not to include a child in the household. Having said that it is the Local Authority who has to decide in these cases who has "primary responsibilty"
In your situation although the mother does not receive the Child Benefit it seems clear that she has Prime Responsibility for the children taking account of the amount of time they spend with her. Reg 20 does refer to who should be included and uses whoever is in receipt of Child Benefit as a guide to making the decision about whether to include a child or not. However it is not always that simple so para 2 (b) ii) refers to prime responsibilty. This is what you need to argue the case for your client.
I hope this helps and know have not been quoting the regs in a formal manner, however I have come across a few cases like this and we have made the decision in favour of the parent who has prime responsibilty even if they do not receive the Child benefit
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