Morning – hoping I can get some advice on an issue with unspent income and arrears of fostering payments so that I am sure I havent overlooked anything. I have never come across this situation.

I have a pension age ‘connected persons/firends and family’ carer.  Some years ago, she took on responsibility for caring for relatives and initially was not paid (or not paid the correct rate) of fostering allowance.  This resulted in a court case and an payment of 72K which was paid in 2019.  That sum of money remains intact and has been set aside for extra bedrooms and other adaptations to be built on her property. (work delayed due to pandemic im told).  Until recently, the lady was receiving pension credit (albeit a small amount) and some CTR. Both benefits have now ended due to excess capital. PS do not appear to be taking this capital into account, but have referred instead to a different amount as reported by the claimant herself.

Having asked for bank statements (and I dont have them all) it seems that there is another account with the sum of 55K.  Initially, because I didnt have all the statements, I assumed she had transferred some of the arrears into a different account. However, this is not the case. She tells me that this is unspent fostering payments (fortnightly payments made by LA which she hasnt needed, or been able to spend due to not going out).  This has now built up over time to a significant sum. She therefore has the arrears of 72K and built up savings of 55K.

I am aware that usually savings from past income are treated as capital after the period for which the income was paid has lapsed – but im questioning this as fostering payments are usually disregarded as an income for most means tested benefits (but then again, so is PIP and I guess unspent PIP does count as capital)

Can anyone confirm that this will still be treated as capital? or can it be disregarded? my instinct is that it will be capital (both payments?) thank you to anyone able to help.

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