Can anyone out there tell me whether i am correct in saying that if a client is in receipt of ROA and is also in receipt of IS, which still includes the child element, then anything upto the child's personal allowance and any disabled premiums are taken into account in full?

The client i have is still in receipt of IS with the children still on his claim.

The client took over the care of 2 children in 2002 (one is his biological child, the other is not). He receives ROA for only one child.

This particular child is also in receipt of low rate Mobility, and High rate Care DLA.

Client says that he was advised by Social Services that he did not have to declare the ROA as other income to the DWP.

Client has now been hit with an enormous overpayment in the region of 20K.

Am i correct in thinking that the client should request to have the children taken off his IS claim and start claiming CTC instead? The info in CPAG suggests that HMRC will ignore all of the ROA.

Help... This is not an area that i am familiar with, and I'm not sure whether this is a benefit issue or a Community Care one.

Many Thanks

Jackie

Initial thoughts:

1. Client should claim CTC immediately. Payments of RO allowance are then disregarded completely, for both IS and CTC. This has been the case since April 2004.
2. Appeal the o/p decision obviously. Grounds to include challenging whether there was an explicit instruction issued with IS to declare RO allowances, which I doubt, and if not, disclosure not reasonably to be expected given Social Services advice. Also mention that there is no net overpayment of taxpayers income since April 2004 - Tribunal can't deal with this but is paves the way for other action
3. Get client to give as many details as possible of advice from Social Services - who said what and when
4. Depending how strong client's evidence is on this complain to Social Services and consider either Ombudsman complaint or an action for negligent advice, if appeal fails in whole or in part - will need to consult solicitor for latter.

Richard Atkinson

Your an absolute star! Thank you for your prompt reply. My One concern is the timeframe involved as the next Tribunal date (has been adjourned once already) is on 7th May. may ask taht it be adjourned for a 2nd time whilst waiting on response from Socail Services.

Many Thanks again

Following my last message, I contacted HMRC and was advised that they also take into account ROA! Was told that as the client is being paid by "a government agency" already then they would not be entitled to any CTC.

They seemed unable to provide details of which part of their 'guidance manual' they were quoting this from.

Am i being led up the garden path?

If the above advice from HMRC is incorrect then I am interested in anyones opinion as to out of all of the agencies involved - Social Services, DWP or HMRC which one of these could it be argued was potentially at fault for not advising the client that he would have been better off by taking the children off his IS Claim & claiming CTC.

Clutching at straws, but the appeal is tommorrow

Never believe what the TCO say on the phone.

Reg.19 Table 6, para.11(b) provides for the disregarding of ROA payments (CPAG Vol.IV, p.444).

The only exclusionary provisions in the CTC Regs are in Reg.3, para.4.1, Cases A - F (CPAG Vol IV, pp.453-5)and none of them apply to cases where the Court has made an RO. TCTM para.2202 refers:
http://www.hmrc.gov.uk/manuals/tctmanual/TCTM02202.htm.

Social Services were clearly incorrect if they advised, before April 2004, that ROA did not need to be declared to DWP when claiming IS. They should also have advised claiming CTC if they were purporting to give benefits advice. DWP couldn't really be criticised since they presumably didn't know about the ROA payments - hence the overpayments. HMRC only at fault for misadvising you, assuming client never contacted them.

If the Tribunal are sympathetic, try getting them to make reccommendation in their decision that the DWP should use their discretion to seek to recover only the net overpayment, after notional CTC entitlement - ie. the actual loss to the public purse.

Richard Atkinson