Summary: Mrs X complained the Council wrongly deducted child benefit from her Special Guardianship Allowance. We did not uphold the complaint. The Council is entitled to carry out a means test because Mrs X receives additional income as well as universal credit. There is no blanket policy as the Council has invited her to provide information about her outgoings and financial commitments. This is in line with regulations and so there is no fault.

The complaint

1. Ms X complained the Council wrongly deducted child benefit from her Special Guardianship Allowance (SGA). She said this caused a financial loss.

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The Ombudsman’s role and powers

2. We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word fault to refer to these. If we are satisfied with an organisation’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)
3. If we are satisfied with an organisation’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)
4. Under our information sharing agreement, we will share this decision with the Office for Standards in Education, Children’s Services and Skills (Ofsted).

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How I considered this complaint

5. I considered evidence provided by Ms X and the Council as well as relevant law, policy and guidance.
6. Ms X and the Council had an opportunity to comment on my draft decision. I considered any comments before making a final decision.

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What I found

Relevant law and guidance

7. A Special Guardianship Order (SGO) is a court order which places a child or young person with an adult who is not their parent and gives this person parental responsibility. The adult becomes the child’s special guardian. SGA is payment available for special guardians.
8. Councils must, when carrying out a financial assessment for SGA, take account of:
• any other grant, benefit, allowance or resource available to the person as a result of becoming a special guardian (Regulation 13(2))
• the person’s financial resources including tax credit or benefit and the amount required by the person in respect of reasonable outgoings and commitments (excluding those in respect of the child) (Regulation 13(3))
9. The Government issued guidance on support services available for special guardians (Special Guardianship Guidance 2017). This includes the provision of a Special Guardianship Allowance (SGA) which is means-tested. Under the heading "Regulation 13: Assessment for financial support" paragraph 63 says:

“Financial support paid under these Regulations cannot duplicate any other payment available to the special guardian or prospective special guardian and regulation 13 provides that in determining the amount of any financial support the local authority must 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.”

10. Non-statutory guidance recommends when a special guardian receives income support, councils pay the applicable maximum payment without assessing their income and without making any deduction for child benefit. (Paragraph 8, Standardised Means Test Model For Adoption And Special Guardianship Financial Support 2005).
11. It is no longer possible to make a new claim for income support and the government is phasing existing claims out. Universal credit (UC) and combined six working age benefits for households on a low income and has replaced income support. People receiving UC may have additional income including from work.
12. Our focus report in 2018, Firm Foundations: complaints about council support and advice for special guardians says we expect councils to provide suitable evidence and explanation before departing from any government guidance about support for family and friends foster carers.
13. In 2024 we found Devon County Council (23 000 973) at fault for operating a blanket policy, for failing to consider cases individually and failing to give reasons for departing from guidance. We said Devon could not provide evidence of consideration of the circumstances of individual cases, applied its policy to all cases and misrepresented the LGSCO’s position by picking out those of our decisions which supported its view and failing to pick out any decisions which did not support its view.
14. The High Court decided:
• Paragraph eight of the standardised means-test model is merely a recommendation
• There was no evidence that means-testing a person who only has income support produces a result that is financially less advantageous.

(Becker v Plymouth City [2022] EWHC 1885)

Key facts

15. Mrs X and her husband Mr X are special guardians and receive SGA. Mr and Mrs X receive UC and salary as income. The Council completed financial assessments for SGA in 2023 and 2024.
16. Mrs X complained to the Council about the matters she raised with us. She referred to the regulations, guidance and our reports set out in the previous section. The Council’s first complaint response did not uphold her complaint, saying UC was not the only income in her household, the Council was permitted to do a financial assessment even if the only income was income support and the SGA awarded was in line with the fostering allowance.
17. Mrs X escalated her complaint to stage two. The Council appointed an independent investigator. They interviewed Council officers in the finance and legal teams who said:
• Where a family is only getting UC (and no other income) then an equivalent payment is added for child benefit.
• Mr and Mrs X were also receiving earned income and so were subject to means-testing for the SGA. The child benefit payment was removed from their SGA.
• Any reason for departing from the model means test (see paragraph ten) has to be because of financial hardship arising from the deduction of child benefit.
18. The Council did not uphold the complaint at stage two, but it invited Mrs X to provide information regarding hardship and the family’s personal circumstances.
19. Mrs X escalated her complaint to stage three. Mrs X told the stage three panel that she intended to provide evidence of financial hardship through the yearly review of the financial assessment. The outcome of the stage three review was no different from stage two, so Mrs X complained to us.

Was there fault?

20. The regulations and guidance were implemented before the roll out of UC and have not been updated since. I have treated references to income support in the regulations and guidance to mean UC as there is no other sensible way of reading them (until the government amends the law and guidance).
21. The means testing model is only a recommendation and so councils can depart from it if they chose to. This has been confirmed by a recent case in the High Court which says means testing is permitted where a person just receives UC.
22. Mr and Mrs X do not just receive UC, they have salary as income as well. So even if I am wrong to conclude means testing is allowed where the family’s only income is UC, this does not apply to Mrs X because the family has additional income from salaries. So, means testing in their case is permitted.
23. Our decisions are not binding in the same way as the court’s and depend on the circumstances of the case. Our position may also change over time in light of caselaw as well as the facts of the case under investigation. In the Devon complaint, we found evidence of a blanket policy and failure to consider the individual circumstances. Mrs X’s complaint is not analogous because the family has additional income. There is no evidence of a blanket policy or failure to consider individual circumstances because the Council has invited her to submit additional information about family expenditure and hardship. This is in line with Regulation 13 which requires a council to consider a person’s reasonable outgoings and financial commitments when determining the SGA payable.

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Decision

24. I find fault no fault.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman