Wokingham Borough Council Children s Services

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1 2010 Version 1 Wokingham Borough Council Children s Services The Special Guardianship Regulations 2005 THE PAYMENT OF SPECIAL GUARDIANSHIP ALLOWANCES Guidance to accompany the Financial Assessment Form When making an application for the payment of a Special Guardianship Allowance and later, when any allowance payable is reviewed, it is important that the following is understood: The rules that determine the payment of Special Guardianship Allowances are enshrined in The Special Guardianship Regulations 2005 A special guardianship allowance is only payable if at least one of the the specific criteria for the payment of an allowance is met (see Information for Special Guardians and prospective Special Guardians The criteria for eligibility) and your financial circumstances are such that you are eligible to receive an allowance. Allowances can be made as a one-off payment, or as an occasional payment. Where it is agreed that an allowance will be paid on an ongoing basis it may only be agreed for a time-limited period. Where it is agreed that on the basis of the needs of the child the allowance can be paid until the child reaches the age of 18 it is still not automatic that the allowance will continue to be paid throughpout this period this will depend on an annual assessment of your financial circumstances. When the term of payment and the amount payable is decided, you will need to enter into a written agreement with the Local Authority about this. If an allowance is agreed, your financial situation has to be reviewed each year during the period of the agreement - this is a legal requirement. It means that you will need to fill out a new financial assessment form each year. If your financial or family circumstances change substantially at any time during the year, you are required to notify the Local Authority immediately without waiting for the yearly review - an early review will then be carried out. The amount of Special Guardianship Allowance payable will change over time according to the needs of the child and your financial situation, and in line with Wokingham Borough Council's Special Guardianship Allowance age-related bands. If changes in your financial situation mean that you no longer meet the criteria for the payment of an allowance, the allowance will be suspended, but the Local Authority will continue to undertake regular reviews, annually or whenever a change in your financial circumstances indicates that it is appropriate for one to be completed.

2 2 All assets have to be declared. Assets of more than 100,000 (including equity in a second property) and/or the fact that you pay private school fees in repect of your child(ren) (whether or not this includes the child for whom payment of a Special Guardianship Allowance is requested) are likely to preclude payment of an allowance, but each case will be considered individually and discretion may be applied. Income from savings of between 25,000 and 100,000 will be treated as income, but income from savings of less than 25,000 will be disregarded. Families receiving Income Support or Jobseeker's Allowance will automatically receive the full Special Guardianship Allowance appropriate to the child s age. The Financial Assessment The financial assessment carried out by the Local Authority will take account of the special guardian(s)'/prospective apecial guardian(s)' total income (assessed as if the child were placed without the payment of an Special Guardianship Allowance) and will weigh against this the family's total outgoings, including any costs relating to the child who is the subject of Special Guardianship. The sum left when total commitments are subtracted from total income is called the Residual Income and will dictate whether an Special Guardianship Allowance is payable, and if so at what rate. Income All income must be declared, including:- Gross wages or salaries from an employer (for both partners in the case of couples) less Income Tax, National Insurance and any contributions to a company pension scheme. Overtime and other earnings should be included. An average should be taken, over 3 months for monthly-paid, or 8 weeks for weeklypaid. (Proof of income is required in the form of the most recent payslips.) Net Profits, for self-employed persons. An Inland Revenue approved statement of net profits for the previous tax year is required. (A statement of expected profits for the current year may be asked for, and may be used to assess current income for the year if it is expected to be substantially different from the previous year, or if a full year's Inland Revenue statement is not available, i.e. new business) All state and private pensions (including those paid for disabilities) and all benefits and allowances, including Disability Living Allowance, Housing Benefit, Sickness Benefit and any Adoption, Special Guardianship or Fostering allowances received for any child(ren) in the family must be declared. Disability Living Allowance will be disregarded for the purpose of the assessment, as will the Special Guardianship allowance for the child for whom the assessment is being carried out. Child Benefit. This should be claimed from the date that the child for whom the Special Guardianship Allowance is being claimed, is placed with you on a permanent basis (regardless as to

3 3 whether or not the Special Guardianship Order has been granted at this stage) and will be included in the assessment. Child Tax Credit and Working Tax Credit. These must be claimed if appropriate and will be classed as income. Money received under a Maintenance or Separation Order, or from the Child Support Agency. Any maintenance payments must be declared and will be classed as income. Income from investments and annuities. Income from savings and assets totaling less than 25,000 will be disregarded for the purpose of the assessment and does not need to be declared. Income from savings or investments of between 25,000 and 100,000 will be included in the financial assessment and must be declared. Income from lodgers, tenants, sub-tenants or rental income. Any income received from lodgers or tenants must be declared and will be counted in your total income - reasonable expenses in connection with renting can be offset to give a net income. Any additional income from any source not mentioned above must be declared. Personal Allowances Standard personal allowances are allowable for the Special Gurdian(s) and for each dependent child living in the household. The rates are set to take into account all the usual household expenses not separately detailed as commitments defined below. The personal allowance rate used for adults is twice the Income Support rate as laid down by the DWP for a couple or a single householder as appropriate. The personal allowance rate used for each dependent child is an amount equivalent to the rate that the Fostering Network calculates as being the total costs incurred in bringing up a child in his/her own home. For the purpose of calculating Special Guardianship Allowances, a dependent child is deemed to be a child who is aged 16 or under, or a young person who is aged 22 or under who is still receiving full-time education that he/she embarked on when he/she left school and who still has his/her home with the family. Commitments Mortgage repayments, including interest and principal and endowment premiums. Rent, after deduction of Housing Benefit if received. Council tax.

4 4 (Most councils charge monthly for 10 months only, so if a monthly figure is given, it will be multiplied by 10 to give an annual figure.) If a rebate is given, the net figure must be declared. Contributions to a Personal Pension Plan. (Allowable if the applicant is not a member of a company pension scheme), however the authority may place a ceiling on the level of contributions that will be accepted at the rate that the applicant was contributing at the time that the child was placed or an original allowance agreed). Life assurance premiums. (Up to a total of 10% of net income). Health insurance premiums. (Allowable if Health Insurance is not provided as a company benefit). Household insurances. (Both buildings - where not included in mortgage repayments - and contents insurance). Any commitments under a Court Order. (Including any payments made under a Separation or Maintenance Order). Note: Car Expenses - a standard allowance is made to all applicants who do not have the benefit of a company car. The weekly rate is based on the Inland Revenue allowable mileage rate for 4,000 miles per annum. Regular Family Expenses - if there are any additional expenses not covered in the above to which Special Guardian(s)/prospective Special Guardian(s) are already committed prior to the Special Guardianship Allowance being set up, or which are related to the placement, they can be declared. Each case will be considered on its own merits and some discretion may be applied. Financial Resources of the Child If the child to whom the Special Guardianship Allowance applies receives a Disability Living Allowance, it must be declared, but it will not be taken into account in any assessment of eligibility for a Special Guardianship Allowance. Where the child has special needs and there are extra costs inherent in caring for the child it is assumed that the Special Guardian(s)/prospective Special Guardian(s) will make/have made application for the payment of disability allowances including where appropriate mobility allowance for the child in order to meet any extra expenditure required. Any lump sum payment or trust fund held in the child's name must be declared, along with any regular payments received in respect of the child. Regular payments may be offset against the personal allowance for the child.

5 5 Method of Assessment As stated above, the residual income of the family will be calculated by taking the difference between the total family income and the sum of the personal allowances and commitments that are allowable. A positive residual income will result in no allowance being payable. A negative residual income will result in a full or partial allowance being paid. A negative residual income will be reflected pound for pound in the Special Guardianship Allowance rate up to the maximum allowance payable. Any family in receipt of Income Support or Jobseeker s Allowance will automatically receive the full allowance appropriate to the child s age. The Special Guardianship Allowance rate for a child will usually reflect the Fostering Network s recommended allowance rates, and equate to the total cost as calculated by the Fostering Network incurred in bringing up a child in his/her own home, less the Child Benefit for the child. IF YOU ARE NOT SURE THAT YOU UNDERSTAND ALL OF THIS PROCESS OR WHAT IT MAY MEAN FOR YOU AND YOUR FAMILY, PLEASE ASK FOR IT TO BE EXPLAINED FURTHER. January 2010