Am I being unreasoanble to find this loophole in the benefit system unbelievable?

(79 Posts)
AllDirections Tue 23-Jul-13 20:37:26

I've just been told that if a person on Jobseekers looks after a friend's child (for no money, just expenses) a couple of days a week, then if they could have that child's child benefit transferred into their name this means that they can come off Jobseekers and claim income support instead, therefore taking away any requirement to work.

I can't believe that this is that case, otherwise lots of people would be doing it, wouldn't they? Apparently the job centre gave the person looking after the child this information.

IneedAsockamnesty Thu 25-Jul-13 12:25:19

There is no loop hole, you have to be financially liable for the parent of the child so they can have no income or be under 18 themselves

NicknameTaken Thu 25-Jul-13 11:35:07

it is possible for two different people to claim CB and Tax Credits for the same child

beck, this is true, but not in the circumstances outlined here. At one stage I was claiming CB while my exH claimed tax credits. I was absolutely upfront with HMRC about this and stated exactly how much time DD was spending with her father. But we both did have parental responsibility and it doesn't mean I can set up this kind of arrangement with a friend.

DespicableWee Thu 25-Jul-13 11:23:45

I wish this actually was a straightforward financial loophole. I'd be raking it in during the summer holidays. My DSs have a few friends whose parents are above the earnings threshold for CB so can't claim it. These kids are here a huge amount in the holidays, for several hours a day most days. Some sleep over here a couple of nights a week as well. It's a reciprocal thing, my DSs sleep over at theirs some nights too and if they aren't here, they are at one of the other houses but they use my house as a base so are here more often than any one other house.

If this were a real loophole, I could claim these kids lived here and put in a claim for CB for them then cancel it after term starts. It would be a lovely little lump sum when the claims went through, just in time for all those start of term expenses. It wouldn't be taking CB away from the actual parents,because they can't get it anyway.

Only I can't,because this isn't a real thing. Your friend has been misinformed by someone with an ulterior motive and it could cost her dearly.

MrsDeVere Thu 25-Jul-13 11:11:03

choc in the case of older children I think that is why the 8 week rule comes in. Teenagers come and go. My eldest boy did. Left home and then came back several times for a few weeks at a time.

If we had cancelled an reapplied every time it would have been a nightmare.

When he moved out we cancelled the CB even though he was asking for it hmm
call us mean but I didn't want to be committing fraud so he could have a bit of free cash.

MrsDeVere Thu 25-Jul-13 11:08:31

I am talking about this specific case choc.
I have zero knowledge of residency issues with separated parents etc.

In this case only one person can claim CB and that would be the person with whom they live for the most time. You couldn't claim CB if your child was living for 6 days a week at their grandmothers unless you were handing over the equivalent for their upkeep.

In this case that would mean that the child in question is being cared for by someone who is not their immediate family and that brings in the private foster care regulations.

(Actually that should read 'you shouldn't' because I know lots of birth parents who do just that and the carer doesn't rock the boat for fear of backlash.)

ChocHobNob Thu 25-Jul-13 11:02:41

What do you mean by resident though MrsDe? An older child could flit between 2 or more homes if they wished.

I don't know if I missed a post (I did skim read) but I didn't know for certain that the "minder" only had them 9-5. With the inclusion of 2 overnights it sounded like it was more than a childcare provider.

For example if it was the grandparents looking after the child because they weren't getting on at home and the grandparents were taking over the majority care then it would be fine for them to claim child benefit.

If it is just a friend helping out with lots of babysitting, then it is fraud.

zipzap Thu 25-Jul-13 11:01:10

Could you ring up the HMRC advice line and get them to clarify the situation so that you're clear on it? And then get your friend to ring them up too - even be there while she does? It would perfectly reasonable to say that the job centre told them to do this but weren't very clear on the exact details and implications so could they please explain

Hopefully if she hears the problems and risks from the HMRC she will realise it's not such a good idea! And also have ammunition to stand up to the other friend who seems determined to push it on her regardless of the actual realities based on what she'd like to be true!

...on questions and no way would these people be able to answer them all honestly. They would absolutely ask what the circumstances were of the child living with the childminder and they would not be able to answer honestly.

I've just applied for income support. There are around eleventy milli

MrsDeVere Thu 25-Jul-13 10:55:14

I don't think its a loophole either.
The child has to be resident rather than just spending a lot of time at the house.
Plus there is the private foster care regulations to consider and I bet the friends don't know about these

They might well get away with it for a while but they will get caught.

Main care does not mean the person who looks after the child 9-5 it means the person the child lives with. Otherwise as you say nannies could claim it! There is no loophole, the wording is clear enough. The child must live with you or elsewhere if you are financially maintaining it. If the child lives elsewhere then it's pretty obvious this only applied if you are the parent/legal carer of the child, not the childminder.

ChocHobNob Thu 25-Jul-13 10:50:23

It's do-able because as MrsD said the wording is not clear. Child benefit is given to the person with the main day to day care of the child so technically if they have the child 5 days and 2 nights a week that could be the majority. But yes they would be lying because they are not the "parent" of that child and would only get given it if the real parents agreed that the minder should receive it, which would be lying. Technically the parents should still receive it because ultimately they still have main responsibility for the child. The child would still be registered at their house for school and medical reasons.

So on further reflection, no, not a loophole. Your friends are being ridiculous allowing it. Would they agree all full time childminders or Nannies should get child benefit for the children they look after.

Snorbs Thu 25-Jul-13 10:38:53

I don't think it's a loophole. It's just the deliberate telling of pre-meditated lies with intent to defraud the benefits system. People go to prison for that kind of thing.

It's maybe not explicit but I think it's clear enough that you can only claim for a child that lives with you, or a child that does not but for whom you are legally responsible (parent or someone with residence or sgo)
There is no loophole. The only way they will make this happen is to lie.

ChocHobNob Thu 25-Jul-13 10:00:56

It is a loophole and a dangerous one for the parents because as recipients of the child benefit, the minder could also claim child support off the parents from the CSA.

MrsDeVere Thu 25-Jul-13 09:54:10

I am sure it used to be far more explicit.
I know the rules because I fostered and then adopted (as well as having birth children).
I have also looked after other children on a temp basis.

But when you look at the info its not very well written IMO.

A couple of social workers told teenagers I know, who had left home, to get their parents to hand over the CB to them. This is ok for the first 8 weeks (I think) but it doesn't seem right.

If your child is not living with you and is living on someone's sofa surely it is not ok to keep claiming even if you give it to the child?

It seemed a way of SS not having to take financial responsibility for vulnerable children (not just stroppy ones who don't want to live with mum)

But reading all that I am not so sure now

who can claim? Anyone who is bringing up a child

"You should claim Child Benefit as soon as:
your child is born
a child you're responsible for comes to live with you
you adopt a child who's living with you
you start paying towards the cost of looking after your child unless they live with someone else who's already getting Child Benefit"

how claiming cb can protect your state pension

who qualifies? 'Normally the child has to live with you' the only exceptions to that are if the child lives with someone else but you support them ie the other parent. Then you must hand it over anyway. This does not apply to your friends. Otherwise the exception is if your child is taken into local authority care temporarily in which case you can continue claiming for a while, 12 weeks I think.

MrsDeVere Thu 25-Jul-13 08:30:51

I have just had a look
I am not surprised this pair think they can do it.

The way the advice is set out has changed. Its not nearly as clear cut as it used to be and there is no explicit mention of where the child lives.

Which is weird confused

Under criteria it says about the age of the child etc but nowhere does it say 'the child has to live with you'

And then there is some stuff about how you can still claim if the child lives with someone else as long as you are pretty much handing it over to the carer.

confused

MrsDeVere Thu 25-Jul-13 08:24:05

I don't have a link to hand all but in order to claim CB for a child you have to be their main carer i.e. they have to live with you for the majority of the time (I am not sure how this works with joint residency but that clearly not the case here).

So if you look at the criteria for claiming CB it is pretty much telling you that getting CB is evidence of permanent residence IYSWIM.

Sock exactly your post. I cannot for the life of me work out what the point of this scheme is and how it could work.

AllDirections Thu 25-Jul-13 07:32:29

Receipt of child benefit for a child to whom you are not related would be seen as evidence of permanent residence.

^ Does anyone have a link to support this? ^

It's what I've been telling my friend all along but has been convinced by the 'minder' that it's not the case.

I agree with everything you've said bochead. The 'minder' is doing this so that she doesn't have to work and so that she can get a bigger house. I love the child in question and it makes my blood boil that she using him in this way. It's up to her what she does with her life but not when she involves others in her scheming, though I have felt a bit stabby sometimes when she's said that she won't work because her children want her at home and implied that she's a superior parent because she doesn't use childcare.

Isn't child benefit linked to national insurance and pensions in some way too? Bit vague on that but it's not something you want to give away.

WafflyVersatile Thu 25-Jul-13 02:35:46

I doubt this is a loophole.

However I've thought for sometime that setting up as a childminder and nominally looking after your mates kids while she looks after yours should be a good way round the monumental stupidity of forcing sahps to go out and work for minimum wage that will all be spent on paying for other people to look after your children whilst being paid minimum wage.

Looking after your children is work.

bochead Thu 25-Jul-13 00:59:05

This harebrained scheme is wrong on so many levels.

If you look after other people's children on a regular basis for more than about 2 hours at a time (to allow for genuine volunteers with scouts, sports, after school clubs etc) in this neck of the woods then you are expected to do the appropriate training and qualify as a registered childminder.

Look after someone else's child for more than 28 days in some areas or 6 weeks in others and you have to inform SS that you are a private foster carer. They take an extremely dim view if they are not informed and the onus is on the parents and the carer to do. Receipt of child benefit for a child to whom you are not related would be seen as evidence of permanent residence. I expect SS will feel that they already have on their books far more appropriate foster carers than this so called "friend". Your friend could lose her child for good to the care system.

The bedroom tax is hitting thousands of families in rental accommodation in the same way as those with mortgages have been hit for years. While I feel for them it has to be said that not everyone is resorting to fraud! If the lazy cow is too bone idle to get a job or train as a childminder she's not a fit carer for somebody else's child by definition.

Financially this may cost your friend more than she realises. Noone's job is secure but your child benefit is the gateway benefit to government help if you are made redundant, have an unexpected accident etc. If your friends circumstances change and her friend refuses to hand back the child benefit for any reason at all (bedroom tax anyone?) then she'put her CHILD in a very vulnerable position where the only help she might get is a food bank willing to overlook the lack of child benefit (& that's unlikely!) to feed her child.

Childcare costs everyone a fortune until their children are old enough. You just have to deal, and I say that as a single parent myself. There's no point trying to maintain a quality of life that excludes your child cos they are in care. Getting a job with a criminal record is almost impossible in the current climate. This is a very short sighted solution.

Frankly your friend sounds too daft to have parental responsibility for a child right now.

No expert on these things so I do hope SS don't take the same dim view of this scam that I did or she's taking a terrible risk.

Beckamaw Thu 25-Jul-13 00:47:51

I meant one claiming CB and the other claiming TC. Not both claiming both, IYSWIM.

Beckamaw Thu 25-Jul-13 00:46:38

It may not be a commonly known fact, but it is possible for two different people to claim CB and Tax Credits for the same child.
I know this to be absolute fact.

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