PART 6CALCULATION OF CAPITAL AND INCOME
CHAPTER 2EARNED INCOME
Surplus earnings
54.—(1) This regulation applies in relation to a claim for universal credit where—
(a)the claimant (or either of joint claimants) was entitled to an award of universal credit that terminated within the 6 months ending on the first day in respect of which the claim is made (“the old award”), and
(b)there were surplus earnings in the assessment period in which the old award terminated.
(2) Where this regulation applies, the amount of any surplus earnings in a month—
(a)that would have been an assessment period for the old award had it continued (including the month which is the assessment period in which the old award terminated), and
(b)is the last such month preceding the first assessment period for a new award,
is to be treated as earned income for the purposes of determining whether there is entitlement to a new award or, if there is entitlement to a new award, calculating the amount of the award.
(3) Whether there are surplus earnings in the assessment period in which the old award terminated or in any of the subsequent 5 months that would have been assessment periods for the old award (had it continued), is to be determined as follows—
Assessment period in which the old award terminated
There are surplus earnings in the assessment period in which the old award terminated if the total earned income for that assessment period exceeds the relevant threshold (“the original surplus”).
Month 1
There are surplus earnings in the first month after the assessment period in which the old award terminated if the original surplus, combined with the total earned income for the month, exceeds the relevant threshold.
Month 2
There are surplus earnings in the second month after the assessment period in which the old award ended if the earned income for that month, including any surplus earnings from the previous month, exceeds the relevant threshold.
Months 3, 4 and 5
Surplus earnings for the third, fourth and fifth month are to be calculated in the same way as for the second month.
(4) For the purposes of paragraph (3)—
(a)where, in the case of a joint claim, there is an old award for each claimant because each claimant was previously entitled to universal credit as a single person or as a member of a different couple the surplus earnings are to be calculated separately in accordance with paragraph (3) as if the claimant were a single person and, if there is an amount of surplus earnings in relation to both old awards, both amounts are to be treated as earned income for the purposes of the new award, and
(b)if—
(i)a single claimant in relation to a new award was entitled to the old award as a joint claimant, or
(ii)either of the joint claimants in relation to a new award was entitled to the old award as a member of a different couple,
the original surplus is to be apportioned so that the amount to be attributed to the claimant bears the same proportion to the whole of the original surplus as the claimant’s earned income in the assessment period in which the old award terminated bears to the total earned income in that assessment period.
(5) A person is not to be treated as having earned income by virtue of this regulation if, at the time that person makes a claim for universal credit, he or she has recently been a victim of domestic violence (within the meaning of regulation 96).
(6) In this regulation—
“total earned income” is earned income of the claimant or, if the claimant is a member of a couple, the couple’s combined earned income, but does not include any amount a claimant would be treated as having by virtue of regulation 63 (the minimum income floor);
“the nil UC threshold” is the amount of total earned income above which there would be no entitlement to universal credit, expressed by the following formula—
Where—
M is the maximum amount of an award of universal credit(1);
U is unearned income(2);
WA is the work allowance(3),
and, in determining those amounts in relation to the first and any subsequent months after the termination of the old award, the Department may make such assumptions as to the claimant’s circumstances as it considers appropriate;
“the relevant threshold” is the nil UC threshold plus £300.
The maximum amount of an award of universal credit is determined by Article 13(2) of the Welfare Reform (Northern Ireland) Order 2015.
For the meaning of “unearned income” see Chapter 3 of Part 6.
For the meaning of “work allowance” see Regulation 23.