Kent County Council (18 012 636)

Category : Children's care services > Friends and family carers

Decision : Upheld

Decision date : 27 Jun 2019

The Ombudsman's final decision:

Summary: There is fault by the Council in its means testing for disabled special guardians as its model fails to take into account extra costs related to disability when assessing resources available to the household. The Council will apologise and allow the complainant, and others affected, an opportunity to evidence disability expenditure and to have their claims backdated.

The complaint

  1. Mrs X complains the Council reduced the special guardianship allowance she and her husband receive for caring for their grandchild under a special guardianship order (SGO). In particular, Mrs X complains the Council changed its approach to Personal Independence Payment (PIP) received by a special guardian. Mrs X considers that as PIP is awarded for the adult’s disability needs and expenses that the PIP paid to Mr X should not be taken into account by the Council when calculating their allowance.
  2. Mrs X says the reduction in the allowance has significantly reduced the household disposable income and means they can no longer afford to provide their grandchild with the same opportunities and leisure activities which has had a negative impact on the child’s behaviour.

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The Ombudsman’s role and powers

  1. We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word fault to refer to these. We must also consider whether any fault has had an adverse impact on the person making the complaint. I refer to this as ‘injustice’. If there has been fault which has caused an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
  2. We cannot question whether a council’s decision is right or wrong simply because the complainant disagrees with it. We must consider whether there was fault in the way the decision was reached. (Local Government Act 1974, section 34(3), as amended)
  3. We may investigate matters coming to our attention during an investigation, if we consider that a member of the public who has not complained may have suffered an injustice as a result. (Local Government Act 1974, section 26D and 34E, as amended)
  4. If we are satisfied with a council’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended)

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How I considered this complaint

  1. I have:
    • considered information provided by Mrs X and the Council
    • spoken to Mrs X by telephone
    • considered statutory guidance on Special Guardianship and the Special Guardianship Regulations 2005 (‘The Regulations’)
    • considered the Government’s recommended model for calculating special guardianship allowances, the Standardised Means Test Model
    • considered the Ombudsman’s Focus Report ‘Firm Foundations: complaints about council support and advice for special guardians’
    • considered the Council’s public consultation documents, equality impact assessment, means testing policy and minutes from a Cabinet meeting.
  2. I have written to Mrs X and the Council with my draft decision and considered their comments.

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What I found

Law and Guidance

  1. Government guidance says special guardian arrangements should not fail just because of financial problems. Financial support is provided by councils where this is ‘necessary’ to ensure the special guardian can look after the child.
  2. Where councils assess a special guardian’s need for financial support they must take account of benefits the guardians and child can receive, the guardian’s financial resources, their outgoings and commitments and the financial needs and resources of the child. This is called means testing. Guidance and caselaw has found councils should have regard to the amount of fostering allowance they would have paid if the child had been fostered and use this maximum payment as a basis for decisions.
  3. Councils must review financial support to special guardians annually. If a council proposes to end or reduce the financial support paid it must allow the special guardian the opportunity to comment.
  4. Councils can use non-statutory Government Guidance called the Standardised Means Test Model for allowances, however they do not have to, and can devise their own system so long as it complies with the Regulations and statutory guidance.

What happened

  1. Mrs X told me that a SGO was awarded by the Court in November 2012 and the Council paid Mr and Mrs X an allowance based on its policy in 2012.
  2. In 2016 the Council undertook a review of allowances paid, including those paid to special guardians. It carried out a public consultation which it says included writing to all special guardians receiving payments. The Council told me this led to recommendations being presented to the Council’s Committee on 10 November 2016, which were approved and adopted. The recommendations led to several changes in the way the Council means tested for allowances.
  3. The Council told me there was no change to the way disability benefits such as Adult PIP or disability living allowance (DLA) paid to a guardian were treated. The Council says it has ‘always taken into account the income, benefits and awards that are payable to the family, including PIP, save the mobility element of this award for families in employment’.
  4. In January 2017, the Council calculated that Mr and Mrs X should receive the maximum special guardian allowance payable on the basis Mr X received Employment Support Allowance (ESA). The Council says that at that time any applicant in receipt of ESA, Income Support or Job Seekers Allowance (JSA) was automatically entitled to the full allowance and no financial means testing was required.
  5. The Council says it wrote to all claimants in January 2017 to advise them changes would be introduced from 1 April 2017 and to provide a notice period of how this may impact on an applicant’s current allowance eligibility. The Council says as it reviews allowances in the month of the original court order, Mr and Mrs X were not affected by the changes until January 2018 when their review was due.
  6. Mrs X told me that the change came as a shock, their allowance was significantly reduced, and it was not phased in for her as it was for other people.
  7. Under the Council’s new policy, from April 2017 it changed the way it treated household income. Previously it broadly calculated household income by adding up all earnings and benefits and disregarding 20% of this amount. Various allowed outgoings were then deducted to produce a net disposable income. The Council deducted reasonable living costs at a rate of 125% of income support levels for a family of that size. If earnings were low the family generally received an amount equivalent to the maximum fostering allowance. This approach was consistent with the Standardised Means Test Model.
  8. The Council’s 2016 recommendations were that it should retain the 125% of income support level as a useful bench mark for assessing ‘reasonable’ core household needs, but that the continued exemption of 20% of income was not so obviously required to fairly calculate the allowances, as a significant amount of income available to the family was not included in the means test. The Council said removal of the 20% income disregard would mostly affect higher earners.
  9. When the Council introduced its changes it also started to means test all applicants including those previously passported for the maximum payment due to receipt of JSA, ESA or income support.
  10. The Council has shared with me its financial calculation for Mr and Mrs X under its new approach. This takes into account the state benefits Mr and Mrs X receive (they have no earnings) including Mr X’s PIP. The Council then deduced housing costs and 125% income support level amount for living costs. No disability expenditure was sought or considered. Mr and Mrs X’s SGO allowance was reduced from £168 per week to £105.55 per week from January 2018.
  11. The Council told me the change in Mr and Mrs X allowance was due to the removal of the 20% exemption on income and due to all applicants now being means tested.
  12. The Council’s response to Mr and Mrs X’s complaint is dated 9 November 2018 and explained their current allowance was calculated taking into account all available income and that while it acknowledged Mrs X disagreed with the Council taking the DLA / PIP payment into account, legal advice it had received confirmed it was reasonable for the Council to do so and there was no expectation from central government the Council should disregard any benefit income.
  13. In response to my enquiries the Council told me it did not undertake a review of how an award such as PIP is spent by the household but said it disregards the mobility element entirely. It said Mr X could spend his PIP in the way he needed to as ‘this amount is consistent and is not reduced by our means test of the allowance we pay’.

Analysis

  1. Mr and Mrs X did not seem to be aware of the proposed reduction to their income, although the Council says it would have written to them about the consultation in 2016 and then written again in January 2017 with a calculation of how they would be affected. I do not have enough information to make a finding of fault as I do not know if these letters were sent and lost in the post or not sent. I do consider if Mrs X had received the reduced calculation in January 2017, she would have challenged it sooner.
  2. Before the changes introduced by the Council in 2016, applicants in receipt of certain benefits were exempted from means testing by the Council and automatically passported to receive the full allowance. This meant that exempted non-working applicants, who also received DLA or PIP, had not had their DLA / PIP taken into account before April 2017 and so were allowed to keep 100% of these benefits and still receive the maximum special guardian allowance. Mr and Mrs X were not subject to the 20% income disregard before 2017, as all of their income, including disability benefits, was disregarded.
  3. The Council position was that it could take PIP and DLA paid to a guardian into account when assessing overall household income and that there was no expectation such benefits would be disregarded.
  4. Regulation 13 says councils must take into account:
    • the financial resources of special guardians and any benefits they will be eligible for if the child lives with them
    • the amount required by the guardian ‘in respect of his reasonable outgoings and commitments’ (excluding the outgoings in respect of the child)
    • the financial needs and resources of the child.
  5. It is therefore correct to say councils may take PIP paid to a guardian into account when calculating household income, however, they must also take into account the amount required in respect of the ‘reasonable outgoings’ of the special guardian.
  6. PIP is a benefit paid to help with some of the extra costs of having a long term illness or disability. The Council’s model deducts certain housing costs and then an amount equivalent to 125% of what a family that size would receive in income support as reasonable expenditure. This approach fails to take into account extra costs where a special guardian is disabled. A disabled guardian and a non disabled guardian with the same income would receive the same deduction for reasonable outgoings although the disabled person may have extra costs relating to their long term illness or disability.
  7. I was not persuaded the Council’s approach was appropriate or compliant with the Council’s equality duties as it would seem to disadvantage disabled applicants who need to spend their PIP on care or equipment but were having this counted as income which is generally available to the household.
  8. There may be applicants who do not receive ESA, JSA or Income Support but who do receive DLA / PIP. The Council’s approach to these applicants has not changed as their DLA / PIP was always taken into account in their financial assessment. However, the principle that disability related expenditure should be taken into account when assessing reasonable outgoings would also apply to these applicants. I acknowledge that the Government guidance and Means Test Model does not address the issue of disability benefits paid to a guardian, however I consider it is self evident that as these benefits are paid for extra costs of disability or long term illness, councils must take any extra outgoings into account in their calculations. The Council’s approach not to do so was fault.

Council’s response to draft decision

  1. In response to the findings in my draft decision the Council now accepts that while it was legally entitled to take into account PIP as income, it failed to give applicants an opportunity to evidence disability related expenditure.
  2. The Council agrees there should be a change in the way it approaches Adult PIP in its means test calculation. It will continue to take PIP into account as income, but it will now provide an opportunity to applicants to evidence their expenditure of PIP on extra costs related to their disability and it will ensure this is taken into account in the calculation of SGO allowances.
  3. The Council told me this will potentially impact 99 complainants out of the 1459 families to whom it pays an allowance (although some of these may only be in receipt of PIP mobility element which is already disregarded).

Agreed action

  1. The Council will amend its means test paperwork for all claimants moving forward to give adults an opportunity to evidence expenditure in relation to how they are using their PIP. This change will come into immediate effect for new applicants.
  2. The Council will write to all 99 claimants that have Adult PIP and ask them to submit evidence of their award of PIP and give them an opportunity to submit evidence of expenditure for this money.
  3. The Council will allow current evidence as relevant to the period from when the applicant’s means test changed (following the changes introduced in April 2017) and backdate any underpaid allowances to the time the applicant’s means test changed.
  4. Mrs X will be given the same opportunity as the claimants referred to above.
  5. The Council will, within four weeks of my final decision, apologise to Mr and Mrs X for the faults I have identified and their time and trouble pursuing their complaint.
  6. The Council will apologise to the other affected applicants when it writes to them about the new process.

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Final decision

  1. There was fault by the Council in failing to take into account extra disability related costs of applicants when calculating ‘reasonable outgoings’ for special guardian payments. I have completed my investigation as I am satisfied the agreed actions set out above are a satisfactory remedy to Mrs X’s complaint.

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Investigator's decision on behalf of the Ombudsman

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