Client needs to claim CTC immediately. All the child's income is then disregarded - Reg.23(2), IS (Gen)Regs.
Until then child's income counts unless disregarded under the old form Reg.23(2). Most earnings were so disregarded but I don't think this can be earnings or else the child would be an employed trainee and parents not entitled to CHB. I suspect it's a training allowance with no disregard. Most unwaged trainees in England and Wales now recieve EMA, which is disregarded (para.11, Sch.9) but I think Scotland is different. Worth checking whether this payment can be classed as an EMA, or the Scottish equivalent, though.
Problem is that the IS treatment of children's income predates the April 2006 extension of Child Benefit to trainees. Solution is CTC.
In E+W I would suggest investigating whether the family will be better off if the young person claimed IS and IBY in their own right - although maximum CTC with disability element is usually higher. Not sure that will work here though as, again, the training allowance would probably be taken into account.
Richard Atkinson
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