Circular SWSG13/93 - Community Care: National Assistance (Assessment of Resources) (Amendment) Regulations 1993, Guidance on Charging - Amendment 1

SECTION 11 - LIABILITY OF RELATIVES

General

11.001 Under Section 42 of the National Assistance Act 1948, which applies in Scotland by virtue of Section 87(3) of the Social Work (Scotland) Act 1968, a man is liable to maintain his wife and a women is liable to maintain her husband. This means that where a person’s accommodation is provided at the public expense by a local authority, the local authority may ask the spouse (ie the liable relative or "LR") to refund all or part of that expenditure.

11.002 Unmarried couples are not legally liable to maintain one another even though they live together as husband and wife.

11.003 Married couples are also liable to maintain one another under Social Security legislation. This means that where Income Support is in payment to a resident, if the local authority pursue maintainance and it is paid, the DSS will merely reduce the Income Support which is in payment so reducing the amount the local authority can charge the resident back to the original amount. Therefore, it is not worth the local authority pursuing maintenance where Income Support is in payment to the resident.

11.004 Where it is evident that the LR is not in a position to make a contribution, eg where the partner receives Income Support, no action is necessary.

11.005 Where is appears to be appropriate to pursue liability, approach the LR. Explain his liability under the Act and ask whether he is in a position to pay maintenance. If he is, agree a reasonable amount for him to pay. Take account of all his circumstances and ensure that he is not asked to pay more than he can reasonably afford.

11.006 Spare.

Liable relative payments

11.007 A liable relative payment (LRP) is:

• most payments are made by a person who is liable under the National Assistance Act to maintain a resident; and

• certain payments made by a person who is not liable to maintain the resident - in particular, payments from a divorced spouse. These would normally be payments made under a Court Order.

Payments not treated as liable relative payments (LRP)

11.008 Certain payments are not treated as LRPs, although they are made by a liable relative. These are:

• certain payments made under a separation or divorce settlement (11.009)

• the first £250 of payments made as a gift (11.010)

• payments made to a third party in respect of the resident if it is unreasonable to take it into account (11.011)

• payments made to the resident in respect of a third party if it is unreasonable to take it into account (11.013)

• any Child Support Maintenance payment (see 6.027, 8.005 and 8.038).

Payments under separation or divorce settlement

11.009 Payments which arise from a property settlement following a separation or divorce are treated as capital, not LRPs. These payments represent the resident’s share of the financial assets of the couple, eg the resident’s share of the value of the matrimonial home.

Reg 29

11.010 The first £250 of any payment made as a gift is treated as capital. Any balance over £250 is taken into account as a non-periodical LRP (11.020). If two or more payments are made in one 52-week period (starting on the date the first payment is made), only the first £250 paid during that period is treated as capital. Any payment over £250 in that 52-week period is treated as a non-periodical payment.

Reg 29

Example

A resident receives a gift from his wife of £300 on his birthday, 12 September 1993. £250 is treated as capital, and £50 treated as an LRP.

His wife gives him £150 for Christmas 1993. The whole amount is treated as an LRP .

On 9 September 1994 his wife gives him £200 for his birthday. The whole amount is treated as an LRP. The 52-week period ends on 11 September 1994.

His wife gives him £200 for Christmas on 15 December 1994. The whole amount is treated as capital and a new 52-week period begins on 15 December. He receives £100 on 15 April 1995. £50 is treated as capital and £50 as an LRP. Any further gifts received during the period 15 December 1994 to 14 December 1995 are treated as LRPs.

Payments to a third party in respect of the resident

11.011 These payments are treated as LRPs unless there are grounds for thinking it would be unreasonable to do so. It might, for example, be unreasonable to treat the following as LRPs;

• payments direct to a TV rental company for the resident to have his own television;

• payments to Telecom to pay a telephone bill

• payments to a mail order company for clothing.

11.012 Where it is decided that it would be unreasonable to treat a payment as an LRP, treat is as a voluntary payment in accordance with 8.051 to 8.057.

Reg 29

Payments to the resident in respect of a third party

11.013 These payments are treated as LRPs unless it appears unreasonable to treat them as possessed by the resident, eg:

• maintenance payments in respect of a child paid to the resident to pass on to that child or the person caring for the child;

• payments intended for the maintenance of a property occupied by an elderly relative.

11.014 In these cases, decide whether the payment should be treated as possessed by the resident or by the third party. If it is treated as possessed by the resident, take it to account as an LRP. If it is treated as possessed by the third party, it will not fall to be assessed as the resident’s income.

Reg 29

Treatment of LRPs

11.015 An LRP is either a periodical payment or a non-periodical payment.

Periodical payments

11.016 A periodical payment is one which is made or due to be made at regular intervals. Such payments will normally be made under:

a) a court order; or

b) an agreement between the LR and:

i) the resident;

ii) DSS; or

iii) the local authority.

11.017 Payments which are made weekly are taken into account in full at the weekly rate of the payment.

11.018 Where a payment is due to be made at intervals other than a week, calculate the weekly amount, eg calendar monthly payment - multiply by 12 and divide by 52.

11.019 Where a payment is due to be made at a weekly amount, but is paid in a lump sum at irregular intervals, divide the lump sum by the weekly amount which should be paid and take it into account at the weekly rate for the appropriate number of weeks.

Reg 31

Non-periodical payments

11.020 Where the resident receives a payment from a liable relative which is not made for an identifiable period the local authority should calculate the period over which to take the payment into account as follows.

Income Support in payment

11.021 Where a resident, who is getting Income Support, receives a LRP which is not for a set period the Benefits Agency Adjudication Officer will calculate a number of weeks for which Income Support will be withdrawn. The local authority should work out the same number of weeks by dividing the payment by the amount of Income Support normally in payment plus any disregards which would be applicable if the payment was a regular payment of earnings. The balance of the payment (if any) should be taken into account in the assessment in the final week.

Reg 18(2)

Example

A resident receives a payment totalling £750.

He had been receiving Income Support of £130 per week and would have been entitled to a weekly disregard of £15.

The local authority should divide the £750 by the amount of Income Support in payment plus the disregard (£130 + £15 = £145) £750 ÷ £145 = 5.17.

The £750 should be taken into account in the assessment for a period of 5 weeks at the rate of £145 (the Income Support previously in payment plus the disregard).

In the sixth week the balance of the payment should be taken into account (ie £750 - (5 x £145) = £25.

In assessing the charge over these 6 weeks the local authority should remember that Income Support will be withdrawn for the first 5 weeks and will be paid at a reduced rate for the 6th week.

Income Support not in payment

11.022 Where Income Support is not in payment and a resident receives a payment for a period which cannot be identified (and this is the only payment received from an LR) the payment should be taken into account over the number of weeks calculated by dividing the payment by the difference between the standard charge and the charge the resident was previously paying (or, if the resident was not liable to pay any charge, dividing by the standard charge). If this calculation results in a fraction of a week, the balance of the payment should be taken into account as income for that final week.

Example

A resident is paying a charge (A) of £120, the standard charge (B) is £250.

He receives a payment (C) of £750.

The number of weeks over which the payment should be taken into account is calculated as follows:

C ÷ (B - A) = 5.77 weeks.

The resident therefore pays the standard charge of £250 for 5 weeks.

In week 6 the resident will have £100 left from the payment (having used £130 (B - A) per week for the 5 weeks to meet the extra charge). This should be used to calculate the charge for this week.

Periodical and non periodical payments

11.023 Where a resident receives a periodical and a non periodical payment at the same time and the weekly amount of the periodical payment is less than the difference between the standard charge and the amount he would be liable to pay if he did not receive any payments from the LR, the payment should be taken into account for a period calculated by dividing the sum received by the difference between the standard charge and the amount the resident had previously been paying.

Example

A resident receives a payment of £500 (A) from an LR.

He normally receives a weekly payment of £50 (B) from the LR.

He has other weekly income of £75 (C).

The standard charge for the accommodation is £250 (D).

The Personal Expenses Allowance is (eg) £15 (E).

The resident normally pays £110 (F).

If no weekly LR payment was received the resident would pay £60 (C-E).

The normal weekly amount of LRP is less than this so the calculation for the number of weeks over which the non-periodical payment is to be taken into account is as follows:

A ÷ (D - F) = 3.57 weeks.

So, the resident pays the full charge for 3 weeks. This will have used up £420 of the payment (the difference between what he was paying and the standard charge (£140) for 3 weeks).

In the fourth week the resident will have £80 let of the LRP. This will be taken into account along with his other income in the assessment of his charge in the final week.

11.024 Where the weekly LRP is equal to or more than the difference between the standard charge and the charge the resident would be assessed as paying if he received no LRPs, then the non-periodical payment should be treated as capital.

Reg 34(1)

For example

A resident receives a non-periodical payment of £500.

He normally receives a weekly LRP £100.

He receives other income of £75.

The standard charge is £250.

The Personal Expenses Allowance is (eg) £15.

The resident normally pays a charge of £160.

If there was no weekly LRP the resident would pay a charge £60.

As the weekly LRP is more than the charge that would be made if the resident did not receive the LRP, the £500 non-periodical payment is treated as capital.

11.025 If an amount has been treated as capital in 11.024 and the periodical LRP later ceases to be paid, the non-periodical payment ceases to be treated as capital and the weekly income should be calculated in accordance with 11.021 or 11.022 above.