We're aware that some users are experiencing technical issues which the team are working to resolve. See the Community Noticeboard for more info. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

Child Benefit and DRO's.

Options
debt_doctor
debt_doctor Posts: 4,595 Forumite
Part of the Furniture 1,000 Posts Combo Breaker
Hi all,


Well.... did you know that Child Benefit does not count as income for the purposes of a DRO?
No?, me neither, but that is what it says in the latest DRO newsletter issued to Intermediaries from the Insolvency Service / DRO Unit.
Up until about 6/ 7 years ago this was correct in IPA 's in bankruptcy but then the policy was changed.


Anyway, a bit of good news.......


DD
Debt Doctor, Debt caseworker, Citizens' Advice Bureau .
Impartial debt advice services: Citizens Advice Bureau Find your local CAB *** National Debtline - Tel: 0808 808 4000*** BSC No. 100 ***

Comments

  • fatbelly
    fatbelly Posts: 22,923 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Cashback Cashier
    Wow

    I read the newsletter (or thought I did) and completely missed that:
    Child benefit - Child benefit is disregarded as income, as the payments are ascribed to the child and not to the debtor, so please do not add it to the total income.

    I've been doing it wrong for 6 years!
  • debt_doctor
    debt_doctor Posts: 4,595 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    fatbelly wrote: »
    Wow

    I read the newsletter (or thought I did) and completely missed that:



    I've been doing it wrong for 6 years!
    I swear that they make this stuff up as they go along!! Never at any time have they released that information to us!
    DD
    Debt Doctor, Debt caseworker, Citizens' Advice Bureau .
    Impartial debt advice services: Citizens Advice Bureau Find your local CAB *** National Debtline - Tel: 0808 808 4000*** BSC No. 100 ***
  • fatbelly
    fatbelly Posts: 22,923 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Cashback Cashier
    From the DRO Unit:
    A recent item in the DRO newsletter regarding Child Benefit has generated several enquiries and, in order to fully clarify the position, it should be noted that applications for a DRO should not include in the statement of the debtor’s income any reference to child benefit. It has been decided not to make an offsetting adjustment to household expenditure, as this might involve various complications relating to a spouse’s entitlements, and it would be difficult to separate out actual expenditure on a child/children with any great accuracy. Further, it is considered that this uneven accounting will not amount to much in the vast majority of cases.

    That clears that up, then...
  • fatbelly
    fatbelly Posts: 22,923 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Cashback Cashier
    The guidance issued has unfortunately confused matters for advisors and therefore in order to avoid any further confusion the latest guidance is being withdrawn and approved intermediaries are asked to revert to their existing practice of scheduling child benefit in the list of income, and child related expenses will be scheduled as normal in the list of outgoings.

    Aah, that's better!
  • debt_doctor
    debt_doctor Posts: 4,595 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    See,


    I told you that they made it up as they went along..............
    DD
    Debt Doctor, Debt caseworker, Citizens' Advice Bureau .
    Impartial debt advice services: Citizens Advice Bureau Find your local CAB *** National Debtline - Tel: 0808 808 4000*** BSC No. 100 ***
  • sherr
    sherr Posts: 11 Forumite
    Just doing my Soa for a possible DRO. Does this mean when calculating my income I don't add the child benefit income?
    Thanks in advance
  • fatbelly
    fatbelly Posts: 22,923 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Cashback Cashier
    sherr wrote: »
    Just doing my Soa for a possible DRO. Does this mean when calculating my income I don't add the child benefit income?
    Thanks in advance

    No, see may last post above - they changed their minds.

    It does count as income.
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 350.9K Banking & Borrowing
  • 253.1K Reduce Debt & Boost Income
  • 453.5K Spending & Discounts
  • 243.9K Work, Benefits & Business
  • 598.7K Mortgages, Homes & Bills
  • 176.9K Life & Family
  • 257.1K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.