Carmarthenshire County Council v LT

For the childcare-charge disregard under the Housing Benefit Regulations 2006, the question is not whether physical childcare was supplied on every day or week for which a payment was made. Regulation 28 requires an overall assessment of the circumstances and of the purpose of the payment.

Contractual terms may be valuable evidence, but they are not conclusive. Payments may remain relevant childcare charges during a temporary interruption where they retain a sufficient connection with the ongoing provision and expected resumption of childcare. Conversely, where care has ceased and there is no intention that it will resume, payments made solely because of a contract do not qualify. Pandemic restrictions required specific consideration of whether continuing payments had instead become retainers.

Carmarthenshire County Council v LT concerned a lone employed parent who received housing benefit because £175 per week of childcare charges was disregarded from her income. Her childminder ceased providing physical care during coronavirus restrictions in Wales, but the claimant continued to pay under the childcare arrangement.

The local authority removed the disregard and treated an overpayment as arising. The First-tier Tribunal allowed the claimant’s appeal, holding that the contractual obligation and the ongoing childcare arrangement meant that the charges remained qualifying charges. The local authority appealed, contending that the disregard required actual physical care and, alternatively, that the continuing payments had become retainer payments.

The Upper Tribunal considered the proper construction and application of regulations 27 and 28 of the Housing Benefit Regulations 2006.

1. Appeal allowed. The First-tier Tribunal erred in law. Its decision was set aside and the appeal was remitted for a complete rehearing before a differently constituted tribunal.

2. Regulation 27(1)(c) requires deduction of relevant childcare charges. Under regulation 28, the words in paragraph (6), concerning care “which is provided”, introduce the prescribed age period for the child. They do not require actual physical childcare to have been supplied on every particular day or week for which a charge is paid.

3. Whether a payment is a relevant childcare charge requires an overall assessment of all the circumstances and of the purpose for which it is made. A payment during a short interruption, such as a child’s illness or a provider’s holiday, may remain connected with the provider’s continuing willingness, ability and intention to provide care, and with the anticipated prompt resumption of care. A narrow day-by-day approach would also create an implausible administrative burden.

4. Contractual terms between the claimant and the registered childminder are evidential, but not determinative. Payments do not qualify merely because a contract requires them. If no childcare is taking place and there is no intention that it will resume, the necessary connection between the payment and childcare provision is absent.

5. The First-tier Tribunal was right to reject the local authority’s narrow construction. However, lockdown differed materially from ordinary short absences because the timing of a return to childcare was uncertain. It had to consider whether the continuing payments had become payments made solely under the contract, or a retainer, rather than payments sufficiently connected with childcare. Its failure to consider that issue might have affected the result.

6. The fresh tribunal must determine the appeal on the circumstances existing when the original decision was made. Later evidence may be used only insofar as it relates to that time.

• Upper Tribunal (Administrative Appeals Chamber): allowed the local authority’s appeal in [2022] UKUT 224 (AAC), set aside the First-tier Tribunal’s decision, and remitted the matter for a fresh hearing.
• First-tier Tribunal (Social Entitlement Chamber): on 18 February 2021, under reference SC267/20/00165, allowed the claimant’s appeal and held that the childcare disregard continued.