Councils should not operate blanket policies of deducting child benefit from those receiving means-tested special guardianship allowance, says Ombudsman
Background
This complaint relates to the experience of Miss B, a special guardian for her grandchild who is referred to as C in the Ombudsman’s decision.
Initially, C lived with their grandmother under a child arrangements order (a private law order which defines arrangements for whom a child is to live with, spend time with or otherwise have contact with, and when). During this time, Miss B was in receipt of universal credit and also received financial support from the council equivalent to its fostering allowance.
In January 2020, the family court made a special guardianship order (SGO) for C, meaning Miss B became C’s special guardian and started receiving special guardianship allowance which the council paid at the same rate as its fostering allowance.
In January 2022, the local authority started to deduct the amount Miss B received in child benefit for C from her special guardianship allowance. Miss B said she was not informed that a financial assessment had been carried out and that her allowance would decrease.
In May 2022, Miss B submitted a stage 1 complaint under the Children Act 1989 representations procedure about the child benefit deductions. The local authority responded promptly citing the legal requirement expressed in The Special Guardianship Regulations 2005 to take account of any other benefits and allowances when determining the amount of a special guardianship allowance. The council invoked previous decisions of the Ombudsman as evidence that its approach was in line with the Ombudsman’s position.
In late May 2022, Miss B asked for her complaint to be investigated at stage 2, but it wasn’t until March 2023 that investigation reports were produced by the investigation officer (IO) and the independent person (IP). Miss B’s complaint about child benefit deductions was not upheld and several justifications were given for this: non-statutory government guidance related to income support and there was no guidance for those receiving universal credit; neighbouring councils operated the same policy; and there was no evidence that the council’s policy was contrary to the Ombudsman’s decisions or statutory guidance.
Other elements of Miss B’s complaint were upheld, including about lack of communication and inadequate support planning for C. Stage 2 was completed in June 2023 when, following intervention by the Ombudsman due to significant delays, an adjudication letter was sent to Miss B. The findings of the IO and IP were accepted.
The complaint
The decision of the Ombudsman to accept Miss B’s complaint early (that is, she did not take her Children Act 1989 complaint to stage 3) was explained as follows:
Given the severe delay in the complaint investigation, the council’s blanket policy of deducting child benefit from all special guardians receiving universal credit and its misrepresentation of our position on this issue, we decided to investigate the substantive issues raised in the complaint and not require Miss B to go to stage three of the complaints process. (Paragraph 41)
The legal framework and relevant guidance
Special guardianship orders
A special guardianship order (SGO) is an order made by the family court. It authorises a child to live with someone other than their parent and appoints that person a special guardian. The special guardian (who must be aged 18 or over) acquires parental responsibility. Unless there’s another order in force, the special guardian is entitled in law to exercise parental responsibility to the exclusion of others with parental responsibility for the child (apart from another special guardian). There are some limitations on the sole exercise of parental responsibility by the special guardian and in those cases authorisation from the court, or the consent of all those with parental responsibility, could be required. If a child is in care prior to an SGO being made, they stop being looked after when an SGO is made (i.e., the care order is discharged). This is set out in sections 14A-14G of the Children Act 1989.
Special guardianship allowance - legislation and government guidance
The Special Guardianship Regulations 2005 set out the circumstances in which financial support is to be paid and the considerations that local authorities must have regard to when making decisions about financial support.
Regulation 16 (‘Notification of decision as to special guardianship support services’) requires local authorities to inform those for whom a needs assessment has been carried about whether special guardianship support services will be provided, and the reasons for it. If a decision is made that financial support is to be provided, then the notice must include certain information, including the amount of financial support and how it was determined, the period for which financial support is to be paid, and the arrangements and procedure for reviewing, changing and terminating financial support.
Regulation 13 (‘Assessment of need for financial support’) applies in circumstances where a local authority carried out an assessment of the need for financial support by a special guardian. It requires local authorities, when determining the amount to be paid, to “take account of any other grant, benefit, allowance or resource which is available to the person in respect of his needs as a result of becoming a special guardian of the child” (regulation 13(2)).
Accompanying statutory guidance – Special guardianship guidance: Statutory guidance for local authorities on the Special Guardianship Regulations 2005 (as amended by the Special Guardianship (Amendment) Regulations 2016) – states:
It is important to ensure that special guardians are helped to access benefits to which they are entitled. Local authorities should therefore endeavour to ensure that the special guardian or prospective special guardian is aware of, and taking advantage of, all benefits and tax credits available to them. Financial support paid under these Regulations cannot duplicate any other payment available to the special guardian or prospective special guardian […] (Paragraph 63)
However, non-statutory government guidance – Standardised means test model for adoption and special guardianship financial support – states (see paragraph 8; emphasis added):
If a family is in receipt of Income Support*, we recommend that the local authority pay the family the applicable maximum payment without assessing their income/expenditure in this test. The figure paid to the family should not include any deductions for child benefit (as they are in receipt of Income Support).
[*Income Support has been replaced by Universal Credit]
While the guidance is non-statutory and offers “a suggested model”, it is recommended by the government for use by local authorities in the belief that that it provides a fair and consistent approach to financial support for adoptive or special guardian families (paragraph 2).
Relevant previous Local Government and Social Care Ombudsman decisions and focus reports
In 2013, the Ombudsman found that Liverpool City Council had deducted child benefit from special guardians in receipt of income support (report no. 12006209 – see paragraph 10 here), reminding local authorities of the non-statutory ’Standardised means test model’ guidance, and making clear an expectation to “see how local authorities took account of the government’s advice when deciding whether to deduct child benefit”.
In 2020, in its decisions re. London Borough of Brent (20 008 652), the Ombudsman found the council at fault for operating a blanket policy of deducting child benefit from all special guardians, including those in receipt of income support, not taking account of government advice or the Ombudsman’s previous recommendations, and failing to provide a justification for this (paragraph 27).
The Ombudsman’s 2013 focus report – Family values: Council services to family and friends who care for others’ children – and the subsequent 2018 focus report - Firm foundations: complaints about council support and advice for special guardians – communicated an expectation that local authorities should “provide suitable evidence and explanation before departing from any government guidance about support for family and friends foster carers” and reminding local authorities about the availability of the non-statutory guidance.
The Ombudsman’s investigation and findings
In response to the Ombudsman’s enquiries, in September 2023, the council confirmed it would change its policy (effective from January 2024) to apply the government’s non-statutory guidance and stop deducting child benefit from allowances paid to special guardians in receipt of means-tested benefits.
The Council also confirmed that there were 170 special guardians on means-tested benefits in its area and a further 125 about whom there was no information.
In its investigation report, the Ombudsman concluded:
“We welcome the council’s … decision to introduce a new means test … to all special guardian cases […] However, we consider our position on this issue has been clear since 2013 when we issued the Liverpool report and has been reinforced by several decisions since, including the Brent case highlighted above. We have said that councils should not operate a blanket policy of deducting child benefit from the allowance of special guardians receiving means-tested benefits. They should consider cases individually and give reasons for departing from the guidance.” (Paragraphs 46-47; emphasis added)
“There is no evidence the Council considered any of the circumstances of special guardians receiving means-tested benefits and applied the policy to all cases without justification. In Miss B’s case the council relied on the regulations alone to justify its decision and did not refer to the guidance or to our relevant decisions. It misrepresented our decisions in this respect, failing to pick out the decisions which did not support its practice and wrongly concluding that its approach was in line with our view. This was fault […].” (Paragraph 48; emphasis added)
“It was only once Miss B had been through stage one and two of the complaints process, complained to us twice and after we had made several rounds of enquiries that the council agreed to change its policy, 17 months after Miss B first complained to the Council about the issue. This was far too long to accept its practice was wrong and caused Miss B distress, frustration and time and trouble in having to pursue the matter for so long, in addition to financial hardship.” (Paragraph 49; emphasis added)
The Ombudsman additionally found that delays and failure to provide information to Miss B were faults and caused Miss B injustice.
Recommended remedies
The Local Government Act 1974 gives the Ombudsman the power to make recommendations to remedy the injustice resulting from identified faults.
Individual remedies
The Ombudsman recommended that, within three months of its decision, the local authority:
- Apologises to Miss B;
- Recalculates the special guardianship allowance in accordance with the government (non-statutory) guidance and pays Miss B a sum equivalent to the child benefit deductions applied by the council since January 2022;
- Pays her £300 for the delay to the complaints process; and
- Pays her £300 for the lack of information and support following the making of the special guardianship order.
Service improvements
The Ombudsman recommended additional remedies to address the potential injustice caused to others in the local authority’s area:
- For the 170 guardians who receive means-tested benefits, the council should recalculate their special guardianship allowance in accordance with the government (non-statutory) guidance and pay each person a sum equivalent to any child benefit deductions applied from the date of this report.
- For the 125 carers about whom the council holds no information, it should request it to then review the carers’ financial circumstances and, where appropriate, recalculate their special guardianship allowance in accordance with the government (non-statutory) guidance; the council should also backdate the allowance without deductions from the date of this report.
- The council should review the operation of its complaints service in respect of stage 2 investigations to ensure compliance with statutory timescales. Subsequent, quarterly reviews should be conducted thereafter and, if delays continue, the council should put the issue before a suitable committee of elected members to consider potential solutions.
You can read the full decision (dated 25 January 2024) here: Devon County Council (23 000 973)
To learn more about special guardianship orders, including financial assistance and the extension of the ‘Adoption Support Fund’ to therapeutic support for children who were in care immediately before the making of a special guardianship order, please read the November 2023 issue of our legal digest.
