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5.8.1 Local Authority Management of Funds on Behalf of Children in Care


  1. Introduction
  2. Investment of Funds
  3. Withdrawal of Funds
  4. Useful Information

    Appendix 1: Release of Funds Responsibility Form

1. Introduction

There are two main ways that the Authority will be responsible for managing the funds of Young People in Care. These are for Disability Living Allowance (DLA) and Criminal Injury Compensation (CIC). This Procedure is the process from establishing appointeeship or receiving criminal injuries compensation funds to the use of monies on behalf of the young person.

How DLA is Managed

Disability Living Allowance (DLA) is a benefit for children and adults who need help with personal care or getting around. If children are under the age of 16, then their DLA will be paid to their parent or carer. However when young people turn 16, it can be paid to them directly depending on their mental capacity. If they do not have Capacity then money is paid to an appointee, who can manage the money for them. If a child is Looked After this could be the Foster Carer or the Local Authority.

  • The Local Authority holds responsibility for DLA when children are placed within a Residential setting. This means that the Local Authority is then the designated appointee for this money and it is managed in a high interest account similar to CIC funds. This only differs if the child is placed within a private Residential Placement as the company responsible will be the appointee for the child/children;
  • However if a child with a disability is placed with a Foster Carer there is the expectation that Foster Carers will make a claim for DLA independently; this is something that they should be advised of by the allocated Social Worker and Fostering Social Worker.

Overview of the National Minimum Standards for Foster Carers with regards to DLA

  • In accordance with regulation 28.9 of the National Minimum Standards for Foster Carers, where a child is eligible for benefits as a result of a disability, Foster Carers are encouraged to apply for those benefits such as DLA;
  • There are regular recorded discussions about how any additional benefits are being spent to promote the best interests of the child;
  • If a child is in short term Foster Care and is moved to another placement, it is then the responsibility of the previous Foster Carer to notify the DWP of the change of circumstances and the New Foster Carer will be advised to make a fresh claim for DLA on behalf of the child. This is in accordance with DirectGov Procedures 'It is your responsibility to tell the Disability and Carers Service (DCS) about any changes in circumstances.';
  • If Foster Carers require assistance in completing the DLA application form, the Social Worker should provide them with all the relevant information in relation to the child's disability and they should also signpost Foster Carers to support services such as Welfare Rights and the Citizens Advice Bureau (CAB) who can assist them.

How Criminal Injuries Compensation is Managed

Any young person who has suffered physical and/or mental injury as a result of a crime of violence could have a claim for compensation from the CICA. Where the Local Authority shares Parental Responsibility for a child, a claim for 'Criminal Injuries Compensation' should be considered. If the claim is successful the award may be invested by the CICA direct or sent to the Local Authority to invest. Where the CIC award is sent to the Local Authority to manage on behalf of the young person the Criminal Injuries Compensation for Children in Care Procedure and this procedure must be followed regarding the management of the funds.

2. Investment of Funds

  • When the Authority is informed that a young person is entitled┬áto a payment for DLA or CIC the person receiving the notification should contact the Financial Officer - Direct Payments (Lois Snow, Telephone: 0151 606 6861) with the young person's details: Name, Address, Date of Birth and National Insurance number where applicable;
  • A BF56 appointeeship form will be completed and forwarded to Department of Works and Pensions where the payments are for DLA;
  • The Director of Finance is informed of the award and a Protection of Property code is established and any monies coming in are allocated into that code;
  • The person acting on behalf of the young person will be informed of the code;
  • The Financial Officer - Lois Snow (Direct Payments) will enter the code and details onto a spreadsheet so that income and withdrawals can be monitored;
  • The Director of Finance will provide an annual statement to the Head of Specialist Services with copies to the Financial Officer - Direct Payments and the Head of Financial Services.

3. Withdrawal of Funds

If at any time a decision is made to request the usage of the monies on behalf of the young person the following process should take place:

  • A Head of Specialist Services form (HOB) should be completed by the person acting on behalf of the young person giving full details of the request and quoting the property protection code; this should be sent to the appropriate Head of Specialist Services or Senior Manager. (See Criminal Injuries Compensation for Children in Care Procedure for the circumstances for the release of Criminal Injuries Compensation funds);
  • On receipt of the approved HOB the person should forward it via a secure email to the CYPD Financial Services Team (Debbie Higginson/Mary Hornsey ext 5533) requesting that a PR1 Payment for the amount agreed is completed;
  • The Financial Services Team will then contact the person to arrange collection of the cheque which will then have to be taken to the Cashiers in Conway Building to be cashed by an authorized signatory or goods can be purchased through procurement;
  • On receipt of cash the person is responsible for that money until the goods/services are provided and receipts obtained for the full amount provided. Any shortfall or surplus will have to be paid back by the person responsible into the young person's account through the Financial Services Team. (Please see Appendix 1: Release of Funds Responsibility Form for the form to complete) Furthermore depending on age and mental capacity, young people also have to sign to say they have received the money. However there is the expectation that the young people will purchase goods when accompanied by an Adult;
  • All receipts should be listed and kept on the young person's case file. In addition a running log of how much money has been spent must be kept on the case file. The receipts must be kept for the retention period for that Child's file.

4. Useful Information

For information about Foster Carers and DLA visit the following sites:

The Fostering Network website

Note: Wirral Borough Council pay fees to access this site and any Wirral employer can register with their Wirral email address.

For information on Disability benefits such as DLA please visit the GOV.UK website.

Appendix 1: Release of Funds Responsibility Form

Click here to view Appendix 1: Release of Funds Responsibility Form