Lone parent who had a period from April 02 - Dec 03 when she was refused HB/CTB as she had no tenancy agreement. It was later accepted that her tenancy was valid but they then refused the claim on the grounds that during the period of nil benefit she had borrowed regular sums of money from friends and this should be treated as income. Client also borrowed from credit cards and this may also have been treated as income.
HB/CTB have not quoted any Regs and appeal is place, but canot find anything in Zebedee regarding this situation.
Does anyone know of caselaw addressing this situation?

Has the LA got a complete and detailed list of these borrowings from friends - dates, amounts etc? It would appear from your posting that they either have evidence, or are assuming that these borrowings were in excess of her weekly applicable amount which, unless one has quite generous friends, seems a tad unlikely particularly given the length of time involved.

Does the decision notice show the way that her benefit (or non entitlement) has been calculated, in a manner in which the claimant can understand?.

See CH/3013/2003 which contains a valuable discussion of the treatment of loans as resources.