Summary: Mr X complains the Council incorrectly deducted an amount equivalent to Child Benefit from his Special Guardianship Allowance. Mr X also says in addition the Council changed the amount paid to him in 2021. Mr X says this has caused him financial loss. We have found fault in the actions of the Council for deducting the amount of child benefit received from the Special Guardianship Allowance. The Council has agreed to issue an apology and repay the amount deducted back to September 2017.

The complaint

1. Mr X complains the Council incorrectly deducted an amount equivalent to Child Benefit from his Special Guardianship Allowance (SGA). Mr X also says in addition the Council changed the amount paid to him in 2021.
2. Mr X says this has caused him financial loss.

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The Ombudsman’s role and powers

3. We investigate complaints about ‘maladministration’ and ‘service failure’. In this report, we 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. We 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)
4. We cannot investigate late complaints unless we decide there are good reasons. Late complaints are when someone takes more than 12 months to complain to us about something a council/care provider has done. (Local Government Act 1974, sections 26B and 34D, as amended)
5. 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)
6. Under our information sharing agreement, we will share the final decision with the Office for Standards in Education, Children’s Services and Skills (Ofsted).

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What I have and have not investigated

7. I have not investigated Mr X’s complaint relating to changes to his SGA made by the Council in 2021 because this complaint is late, and Mr X could have raised this at the time.
8. I have investigated the complaint that the Council incorrectly deducted an amount equivalent to Child Benefit from his Special Guardianship Allowance (SGA).

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How I considered this complaint

9. I have considered the information provided by Mr X and have discussed the complaint with him over the telephone.
10. I have also considered the information provided by the Council.
11. Both Mr X and the Council were invited to comment on my draft decision. Any comments received have been considered before a final decision was made.

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What I found

12. Special Guardianship Order (SGO) is a court order which places a child or young person with someone who is not their parent and gives this person parental responsibility for the child. The person(s) with whom the child is placed becomes their special guardian.
13. The Government has 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.
14. Regulations governing SGAs say that councils must give special guardians notice of the decision on a SGA including the reasons for it. (Regulation 16, Special Guardianship Regulations 2005, as amended by the Special Guardianship (Amendment) Regulations 2016) [The Regulations].
15. The Regulations also state that councils must take into account other grants, benefits and allowances available to the special guardian and may deduct an amount from the SGA to take into account any child benefit the guardian receives for the child (Regulation 13).
16. However, the Government also recommends that when a special guardian is receiving income support, councils should pay the applicable maximum payment without assessing their income and without making any deduction for child benefit. (Standardised Means Test Model For Adoption And Special Guardianship Financial Support 2005). This advice from the Government is not a statutory requirement for local authorities but a recommendation to achieve a fair and consistent approach by local authorities.
17. Income support has been gradually replaced by universal credit since 2013 as a minimum income benefit.
18. In 2013 we found that Liverpool City Council had deducted child benefit from special guardians on income support. We noted that the Government’s recommendation was not a statutory requirement but was aimed at achieving a fair and consistent approach by councils. The report said we would want to see how local authorities took account of the Government’s advice when deciding whether to deduct child benefit from those on income support.
19. In 2020 we found that the London Borough of Brent was at fault for operating a blanket policy of deducting child benefit from all special guardians, including those receiving means-tested benefits. It had failed to take into account government guidance or our recommendations and had not provided any justification for its position.

What happened

20. The Court granted Mr X a SGO in 2017 and the Council began paying him an SGA. The Agreement said an amount equivalent to Child Benefit would be deducted from the SGA amount.
21. Mr X complained to the Council in May 2024 and said Government guidance recommends that child benefit should not be deducted from the SGA who are in receipt of universal credit. Mr X asked the Council to treat him in accordance with the guidance, recalculate his SGA and repay him the amount it had been deducting.
22. The Council responded in June 2024 and said it had recalculated his SGA and backdated the change to April 2024.
23. In response to our enquiries the Council said it has backdated payments to the start of the financial year. This was at the discretion of senior leaders in Children’s Services. The Council said there was evidence this was in line with other authorities.
24. Mr X sent a further complaint in June 2024 and said he was unhappy with the date the Council had backdated the SGA adjustment to.
25. The Council responded within a few days and said the non-deduction of child benefit is a government guideline and not a statutory requirement. The Council said its decision to backdate the arrangement had been made as a goodwill gesture.
26. The Council has confirmed it is currently not including child benefit in means tests for SGA’s for those on Universal Credit.

Analysis

27. We welcome the Council’s recent decision to introduce not including child benefit in means tests for SGA’s, for those on Universal Credit, in line with non-statutory government guidance.
28. 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.
29. The Council has said the non-deduction of child benefit is a government guideline and not a statutory requirement. The Council relied on the regulations alone to justify its decision and did not refer to the guidance or to our relevant decisions. This is fault.
30. Our decisions have been published on our website for many years and if the Council had done a thorough internet search it would have found the decisions clearly stating our position.
31. We welcome the Council recalculating the SGA amount and refunding Mr X the difference back to April 2024. However, the Council has not provided any justification for failing to backdate the payment further.
32. The guidelines issued about when a special guardian is receiving income support say councils should pay the applicable maximum payment without assessing their income. The guidelines also say Councils should also not make any deduction for child benefit. These guidelines have been available since long before Mr X’s SGO was granted.
33. By failing to consider the government guidelines the Council has caused Mr X a financial loss from the time the SGA began up until it changed its approach in April 2024.

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Agreed action

34. Within one month of a final decision, the Council should:

• Write to Mr X to apologise for the faults identified.
• recalculate Mr X’s SGA in accordance with the government guidance and pay him a sum equivalent to the child benefit deductions made between September 2017 and April 2024.

35. The Council should provide us with evidence it has complied with the above actions.

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Final decision

36. I have found fault in the actions of the Council for deducting the amount of child benefit received from the Special Guardianship Allowance.

Investigator’s final decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman