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There has been recent case law regarding payment of Special Guardianship Allowances and the amount that should be paid by Local Authorities. Often foster carers may decide to keep a child permanently and opt for a special guardianship in respect of that child as opposed to a Residence Order or Adoption. Likewise, family members may decide to become Special Guardians for children they are caring for. In such circumstances, the Local Authority has to assess the family and consider what rate of Special Guardianship Order allowance to pay. Whilst the allowance is means tested, general guidance issued to the Local Authority pursuant to the Local Authority Social Services Act 1970 Section 7, says the Local Authority is to “have regard to the amount of fostering allowance which would have been payable had the child been fostered, in determining the amount of financial support to be paid”. Some Local Authorities have devised their own schemes for calculating the Special Guardianship Allowance, and have opted to pay less than the fostering allowance and this has been held to be unlawful.
Initially in the case of B v London Borough of Lewisham [17th April 2008] EWHC 738, The Local Authority, Lewisham, offered to pay a reduced rate to a grandmother. When considering the interpretation of the Act in an action for judicial review, , the Judge believed that it is more likely that those giving the guidance intended that the Local Authority’s fostering allowances would serve as a guide for its consideration of what their special guardianship provision should be. The Court found that the Local Authority scheme was unlawful and should be quashed. This is an extremely important decision which is likely to have an impact on many Local Authorities, who will now have to review the way they calculate their Special Guardianship Allowances. Those Local Authorities that are currently basing these on their Adoption allowances will be affected since clearly the Court has found that the interpretation in the legislation guidance is wrong as such rate should be calculated in line with fostering allowances.
More recently in the case of B v X Metropolitan Borough Council  EWHC 467, a special guardian also claimed Judicial Review of the decision of the Respondent Local Authority concerning the amount of Special Guardianship Order allowance payable to her. The Local Authority devised a policy to pay Special allowances at two-thirds of the rate of that it paid for fostering allowances. The Court held that this is a deviation from the guidance and therefore had to be justified. The Local Authority was criticised and it was held that they had insufficient justification for its decision to depart from the national guidance to pay Special Guardianship Order allowances at fostering rates.
This case has quite clearly demonstrated that the general interpretation of the legislation should be that the Local Authority pay their Special Guardian rate akin to a fostering allowance. It is usual for the Local Authority to deduct the amount that could be claimed for Child Benefit and Child Tax Credit in calculating such figures.