Around 340 carers in the Merseyside area will have their allowances backdated after an investigation by the Local Government Ombudsman (LGO) discovered Liverpool City Council had been underpaying them for years.
The investigation was brought about after a woman, who had been looking after her toddler nephew following a domestic violence incident, complained that the council was not paying her the correct benefits.
She claimed that the council did not consider her nephew a ‘looked after child'. As a result, she missed out on the appropriate support and financial payments that would have been available to her if the council had accepted that she was a family and friends foster carer, and the care she provided was not a ‘private arrangement' between her and the child's parents.
Some months later, and with the help of Liverpool City Council, the woman obtained a Special Guardianship Order for her nephew. And, while the council did pay her the Special Guardianship Allowance, it deducted Child Benefit from the amount she received despite the government recommending this should not happen when people also receive Income Support.
She also said that the amount she was receiving as a special guardian was lower than other foster carers in the area were awarded.
Investigating the individual case, the Local Government Ombudsman discovered a wider problem in the Liverpool area, affecting 340 carers city-wide.
It found that the council was failing to pay those foster carers who look after children aged 0 to four-years-old at the National Minimum Fostering Allowance set by government each year, and also failed to pay the Special Guardianship Allowance (a separate benefit for carers who have parental responsibility for the children in their care) at the same rate as its foster carers.
Nigel Ellis, Executive Director for Investigations at the LGO, said:"Many councils struggle to recruit carers to look after children who find themselves - for whatever reason - unable to be looked after by their parents.
"So it is only fair that these people, who do such a good job of giving children the chance of family life, get the benefits and allowances they rightly deserve. These allowances are not ‘pay' - they are used to clothe and feed the children being looked after.
"I'm pleased to say that Liverpool City Council has quickly accepted it is at fault and has agreed to backdate the benefits to both the complainant and the 340 other carers affected. I hope this swift response will go some way to alleviate the trouble the underpayment may have caused
"I would urge other local authorities to look at their own procedures to ensure that carers in their areas are not experiencing the same problems that those in Liverpool have encountered."
The LGO has recommended that the original complainant receive backdated allowances of £10,912 and be provided with notification about the rate at which she will be paid the Special Guardianship Allowance. Liverpool City Council has also agreed to pay that allowance without the deduction of Child Benefit while she is in receipt of Income Support.
Liverpool City Council has also agreed to carry out a review of its practice of deducting Child Benefit from those on Income Support in receipt of Special Guardianship Allowance.
The council has agreed to backdate payment of its Special Guardianship Allowance at the same rate as its Fostering Allowance rate from April 2010, affecting around 146 people. It will also pay all foster carers, looking after children under four, the Fostering Allowance in line with or above National Minimum Fostering Rates from April 2013 and will backdate the underpayment to April 2011, affecting an additional 194 carers.