I'me sure that there have been similar threads to this but I can't seem to find them.

Claimant's former spouse has been making regular monthly payments towards her mortgage since 2003 under a consent order following divorce, but this has been paid into her personal bank account rather than directly to the lender. Payments have been made by the claimant to the lender via monthly direct debit from that same account.

LA has superseded decision back to 2003 classing this as undeclared 'other income', taking it into account in full and creating a large overpayment of CTB.

Shouldn't this payment be disregarded in the same way as if it was paid direct to the lender?

I would argue that the Quistclose principle will apply as much to income as it does to capital and so the amounts paid towards the mortgage are not income at the claimants disposal that can be taken inton acount.

The Court of Appeal held in Leeves v CAO (R(IS)5/99 ) that in the case of a student grant no constructive trust had beeen entered into, but the Court held that to be so only on the facts of the particular case before it.

This was not the case in CFC/21/1989 where a claimants father paid her an amount each month to meet her mortgage obligation to her building society. The Commissioner accepted that the money was impresed with a trust and so the income was not at the claimants disposal

Quistclose Investments LtD v Barclays Bank (1970) House of Lords.

Rolls Razor LtD had a £484,000 overdraft with Barclays Bank. However it needed to borrow a further £210,000 in order to pay dividends to share holders. Rolls Razor borrowed this money from Quistclose Investments with the express provision that it was to be used solely for the purpose of paying the dividends. Rolls Razor then deposited the money in a special account with Barclays separate from the company’s main business account. However Rolls Razor went into liquidation before paying the dividends. Then Barclays held the money and used it to reduce Rolls Razor’s overdraft.

Held:

Until the purpose of the loan was carried out then Rolls Razor held the money on trust for Quistclose Investments. Thus the money could never become part of Rolls Razor’s resources and therefore Barclays Bank, as a creditor of Rolls Razor, could not lay claim to it. Consequently the money had to be returned to Quistclose Investments.

Note, the fact that the money was held in a separate account was conclusive in this case but subsequent cases have held that there is no requirement for the money to be held separately as long as the intention behind the loan or gift is clear.

Thus the principle established in the Quistclose case is clear for Social Security law. Because a gift or loan advanced in such circumstances is held on trust for the lender/donor until its purpose is carried out then it is never part of the claimant’s resources and thus the claimant cannot possess it.

I would argue that each payment was impressed with a trust.

Can I be cheeky enough to ask one more question about this response?

Could someone please point me in the direction of the subsequent cases that have held there is no requirement for the money to be held separately. I've got an imminent appeal and a full diary!!! Help!!!

For example:

Re Kayford Ltd 1975.

Anglo Corporation v Peacock AG 1997.

Thanks so much!