The Social Security (Miscellaneous Amendments) (No. 4) Regulations 1998

Explanatory Note

(This note is not part of the Regulations)

These Regulations amend the Jobseeker’s Allowance Regulations 1996 (S.I.1996/207), the Income Support (General) Regulations 1987 (S.I.1987/1967), the Housing Benefit (General) Regulations 1987 (S.I.1987/1971), the Council Tax Benefit (General) Regulations 1992 (S.I.1992/1814), the Family Credit (General) Regulations 1987 (S.I.1987/1973), the Disability Working Allowance (General) Regulations 1991 (S.I.1991/2887), the Social Security Amendment (New Deal) Regulations 1997 (S.I.1997/2863) and the Social Security (Claims and Payments) Regulations 1987 (S.I.1987/1968).

They also revoke the Jobseeker’s Allowance (Amendment) Regulations 1998 (S.I.1998/71) which increased the number of waiting days before which a person may be entitled to a jobseeker’s allowance from 3 to 7 (regulation 2).

In particular, these Regulations prescribe that part of the Employment Option of the New Deal (as prescribed in regulation 8 of the Social Security Amendment (New Deal) Regulations 1997 (S.I.1997/2863)) shall consist of assistance in pursuing self-employed earner’s employment (“the self-employment route”) (regulation 3(2)). By so doing, the regulations provide that the self-employment route is an employment programme for the purposes of section 19 of the Jobseekers Act 1995 (c. 18) and that if a person, without good cause, refuses or fails to participate in the self-employment route, or loses his place on the self-employment route due to misconduct, he will receive a sanction under section 19 of that Act.

The Regulations also make various amendments to the rules on the treatment of income and capital in the benefits referred to above which are consequential on the introduction of the self-employment route—

• they provide that income paid to a participant in respect of the period when he is receiving assistance under the self-employment route and which derives directly from the receipt of such assistance shall, for the purposes of jobseeker’s allowance and income support, be subject to special rules as to its calculation and the date it is taken into account and treated as paid (regulations 3(3) and (4) and 6(2) and (3)) and that such income, for the purposes of council tax benefit, disability working allowance, family credit and housing benefit, shall be treated as capital (regulation 7(1) and (2));

• they provide that mandatory payments made to participants in the self-employment route shall be disregarded both as income (regulations 4(a) and 7(3) and (4)) and as capital (regulations 5(b) and 7(9) and (10));

• they provide that payments in respect of expenses incurred in receiving assistance under the self-employment route and amounts used or intended to be used to maintain repayments on loans taken out to help establish or carry on the activity to be assisted under the self-employment route shall be disregarded as income (regulations 4(b), 6(4) and 7(5) and (6));

• they provide that business assets of persons receiving assistance under the self-employment route shall, in certain circumstances, be disregarded as capital (regulations 5(a) and 7(7) and (8));

• they provide that capital intended for purchasing business assets for use whilst receiving assistance under the self-employment route shall be disregarded (regulations 5(c) and 7(11) and (12)).

Regulation 8(1) and (2) both revoke a consequential amendment in the Social Security Amendment (New Deal) Regulations 1997 and make a technical amendment relating to the numbering of paragraphs in Schedule 4 to the Housing Benefit (General) Regulations 1987. Regulation 8(3) makes a consequential amendment to the Social Security (Claims and Payments) Regulations 1987 relating to the date on which relevant changes of circumstances are to have effect for the purposes of persons entitled to a jobseeker’s allowance or to income support.

These Regulations do not impose any charge on business.