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5.—(1) Earnings derived from employment as an employed earner are calculated or estimated over a period determined in accordance with the following paragraphs and at a weekly amount determined in accordance with paragraph 7 (calculation of weekly amount of earnings).
(2) Subject to sub-paragraphs (3) and (5) to (7), the period over which a payment is to be taken into account—
(a)in a case where it is payable in respect of a period, is a period equal to the total number of award weeks in the period commencing on the date on which the earnings are treated as paid under paragraph 6 (date on which earnings are treated as paid) and ending on the day before the date on which earnings of the same kind (excluding earnings of the kind mentioned in paragraph 8(1)(a) to (j)) and from the same source would, or would if the employment was continuing, next be treated as paid under that paragraph, or
(b)in any other case, and where it would cause the individual’s earnings to exceed the relevant earnings limit if it were taken into account only in respect of the period in which it was received, is a period equal to such number of weeks as is equal to the number (less any fraction of a whole number) calculated in accordance with the formula—
where—
P is the net earnings,
Q is the amount of the relevant earnings limit plus one penny, and
R is the total of the sums which would fall to be disregarded or deducted as appropriate under paragraph 9(2) (calculation of net earnings of employed earners),
and that period begins on the date on which the payment is treated as paid under paragraph 6 (date on which earnings are treated as paid).
(3) Where earnings not of the same kind are derived from the same source and the periods in respect of which those earnings would, but for this sub-paragraph, fall to be taken into account overlap, wholly or partly, those earnings are taken into account over a period—
(a)equal to the aggregate length of those periods, and
(b)beginning with the earliest date on which any part of those earnings would otherwise be treated as paid under paragraph 6 (date on which earnings are treated as paid).
(4) In a case to which paragraph (3) applies, earnings under paragraph 8 (earnings of employed earners) are taken into account in the following order of priority—
(a)earnings normally derived from the employment,
(b)any payment to which paragraph 8(1)(b) or (c) applies,
(c)any payment to which paragraph 8(1)(i) applies,
(d)any payment to which paragraph 8(1)(d) applies.
(5) Where earnings to which paragraph 8(1)(b) to (d) (earnings of employed earners) applies are paid in respect of a part of a day, those earnings are taken into account over a period equal to a week.
(6) Where earnings to which paragraph 8(1)(i)(i) (earnings of employed earners) applies are paid in respect of or on the termination of any employment which is not part-time employment, the period over which they are taken into account is—
(a)a period of weeks equal to the number of weeks (less any fraction of a whole number) obtained by dividing the net earnings by the maximum weekly amount which, on the date on which the payment of earnings is made, is specified in section 227(1) of the Employment Rights Act 1996(1), or
(b)a period equal to the length of the specified period,
whichever is the shorter, and that period begins on the date on which the payment is treated as paid under paragraph 6 (date on which earnings are treated as paid).
(7) In this paragraph—
“part-time employment” means—
subject to the provisions of heads (b) to (d) of this definition, employment in which a person is engaged, or, where their hours of work fluctuate, they are engaged on average for less than 16 hours a week, being work for which payment is made or which is done in expectation of payment,
subject to head (c) of this definition, the number of hours for which an individual is engaged in work is determined—
where no recognisable cycle has been established in respect of an individual’s work, by reference to the number of hours, or, where those hours are likely to fluctuate, the average of the hours, which they are expected to work in a week,
where the number of hours for which they are engaged fluctuates, by reference to the average of hours worked over—
if there is a recognisable cycle of work, the period of one complete cycle (including, where the cycle involves periods in which the individual does not work, those periods but disregarding any other absences),
in any other case, the period of 5 weeks immediately before the date on which an application for Carer Support Payment is treated as received, or the date on which a determination without application falls to be made, or such other length of time as may, in the particular case, enable the individual’s average hours of work to be determined more accurately,
where for the purpose of head (b)(ii)(aa) of this definition, an individual’s recognisable cycle of work at a school, other education establishment or other place of employment is one year and includes periods of school holidays or similar vacations during which they do not work, those periods and any other periods not forming part of such holidays or vacations during which they are not required to work is disregarded in establishing the average hours for which they are engaged in work,
for the purposes of heads (a) and (b) of this definition, in determining the number of hours for which an individual is engaged in work, that number includes any time allowed to that individual by their employer for a meal or for refreshment, but only where that individual is, or expects to be, paid earnings in respect of that time,
“specified period” means a period equal to—
a week or such number of weeks (less any fraction of a whole number) as comprise the period of notice which is applicable to an individual, or would have been applicable if it had not been waived, less
any part of that period during which the individual has continued to work in the employment in question or in respect of which they have received any payment in lieu of notice,
and for the purposes of this definition “period of notice” means the period of notice of termination of employment to which an individual is entitled by statute or by contract, whichever is the longer, or, if they are not entitled to such notice, the period of notice which is customary in the employment in question.
1996 c. 18. Section 227 was amended by schedule 9 of the Employment Relations Act (c. 26), schedule 7 of the Employment Act 2002 (c. 22), schedule 1 of the Apprenticeships, Skills, Children and Learning Act 2009 (c. 22) and S.I. 2023/318.
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