In the specific circumstances set out in the above case, the LA is acting wholly inappropriately.
I can understand LAs asking for evidence of a child occupying a a property as the normal home. Child Benefit isn't the sole determining factor - it is merely one form of evidence. In this case, there is cogent and credible evidence that the children are occupiers and form part of the claimant's family. That, in law, is sufficient for benefit purposes.
My advice is to submit a formal appeal and, depending on how you view the LA's conduct, a formal complaint at the same time (but keeping the two distinct and separate). Based on the info given, I can't see any Tribunal finding for the LA.
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