2(1)In determining for the purposes of—
(a)any provisions of the principal Act which relate to sickness benefit or invalidity benefit, or
(b)section 15 or 16 of the Pensions Act (invalidity pensions for widows and widowers),
whether any day is to be treated as a day of incapacity for work in relation to a person, there shall be disregarded any work which that person has undertaken, or is capable of undertaking, as a councillor.
(2)Where the amount of councillor’s allowance to which a person is entitled in respect of any week exceeds the permitted earnings limit, an amount equal to the excess shall be deducted from the amount of any incapacity benefit to which he is entitled in respect of that week, and only the balance remaining (if any) shall be payable.
(3)In determining whether a person satisfies the conditions of entitlement for an incapacity benefit, he shall be treated as having been incapable of work on any day which falls in the pre-commencement period and which—
(a)would have been treated as a day on which he was so incapable, were there disregarded any work which he undertook (or was capable of undertaking) as a councillor, but
(b)would not have been so treated apart from this sub-paragraph.
(4)In determining whether a person satisfies the conditions specified in subsections (2)(b) and (3)(b) of section 36 of the principal Act (severe disablement allowance) he shall be treated as having been incapable of work on any day which falls in the pre-commencement period and which—
(a)would have been treated as a day on which he was so incapable, were there disregarded any work which he undertook (or was capable of undertaking) as a councillor, but
(b)would not have been so treated apart from this sub-paragraph.
(5)In subsection (7) of that section (regulations) the following paragraph shall be inserted after paragraph (c)—
“(cc)may provide that, where the amount of councillor’s allowance (within the meaning of paragraph 2 of Schedule 8 to the Social Security Act 1989) to which a person is entitled in respect of any week exceeds a prescribed sum, then, except in prescribed cases, an amount equal to the excess shall be deducted from the amount of any severe disablement allowance to which he is entitled in respect of that week, and only the balance remaining (if any) shall be payable; and”.
(6)In this paragraph—
“councillor” means—
(a)in relation to England and Wales, a member of a London borough council, a county council, a district council, a parish or community council, the Common Council of the City of London or the Council of the Isles of Scilly; and
(b)in relation to Scotland, a member of a regional, islands or district council;
“councillor’s allowance” means an allowance under or by virtue of—
(a)section 173, 177 or 177A of the [1972 c. 70.] Local Government Act 1972, other than any such allowance as is mentioned in section 173(4) of that Act (financial loss); or
(b)section 45, 49 or 49A of the [1973 c. 65.] Local Government (Scotland) Act 1973, other than any such allowance as is mentioned in section 45(4) of that Act (financial loss);
and where any such allowance is paid otherwise than weekly, an amount calculated or estimated in accordance with regulations shall be regarded as the weekly amount of the allowance;
“incapacity benefit” means any of the following benefits—
(a)sickness benefit;
(b)invalidity benefit;
(c)an invalidity pension under section 15 or 16 of the Pensions Act;
“permitted earnings limit” means the amount specified in regulation 3(3) of the [S.I. 1983/1598.] Social Security (Unemployment, Sickness and Invalidity Benefit) Regulations 1983 (work of certain kinds to be disregarded where earnings do not exceed £27 per week);
“pre-commencement period” means the period beginning with 11th May 1987 and ending immediately before the coming into force of this paragraph.
(7)Any reference in this paragraph to the work which a person undertakes, or is capable of undertaking, as a councillor shall be taken to include a reference to any work which he undertakes, or is capable of undertaking, as a member of any of the bodies referred to in—
(a)section 177(1) of the Local Government Act 1972, or
(b)section 49(1) or (1A) of the Local Government (Scotland) Act 1973,
of which he is a member by virtue of his being a councillor.