I'm surprised that the LA are giving DPs to the disabled person to employ their partner as a carer. I don't think most LAs (nor, possibly, the Dept of Health) would be keen on that.
Still, if it happens, then the payments to the carer certainly are earnings. It should be specified in the DP agreement what the payments from the LA are for. It will be clear from the agreement that the disabled person will be employing the carer and ensuring tax and NI deductions (if the wage is high enough), plus making regular returns to the LA accounting for expenditure of the DPs, including, of course, wages paid.
Jim
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