The Tax Credits (Definition and Calculation of Income) Regulations 2002

PART 3 Sums disregarded in the calculation of income

General disregards in the calculation of income

19.—(1) For the purposes of regulation 3—

(a) the sums specified in Table 6 are disregarded in the calculation of income;

(b) the sums specified in column 1 of Table 7 are disregarded in the calculation of income if the condition in the corresponding entry in column 2 of that Table is satisfied; and

(c) the sums specified in column 1 of Table 8 are disregarded in the calculation of income to the extent specified in the corresponding entry in column 2 of that Table.

(2) In this regulation—

“the JSA Regulations” means the Jobseeker’s Allowance Regulations 1996; and

“the JSA (NI) Regulations” means the Jobseeker’s Allowance (Northern Ireland) Regulations 1996.

Table 6

Sums disregarded in the calculation of income

1.  Any payment of an employment credit under a scheme under section 2(2) of the Employment Act known as “New Deal 50 plus” or the corresponding scheme under section 1 of the Employment and Training Act (Northern Ireland) 1950.

2.  Any payment made— (a) under section 15 of the Disabled Persons (Employment Act) 1944(1) or section 15 of the Disabled Persons (Employment) Act (Northern Ireland) 1945(2); or (b) in accordance with arrangements made under section 2 of the Employment Act or section 1 of the Employment and Training Act (Northern Ireland) 1950(3) to assist disabled persons to obtain or retain employment despite their disability.

3.  Any mandatory top-up payment made pursuant to— (a) section 2 of the Employment Act in respect of the claimant’s participation in— (i) an employment programme specified in regulation 75(1)(a)(ii)(bb) of the JSA Regulations or regulation 75(1)(a)(ii) of the JSA (NI) Regulations (Voluntary Sector Option of the New Deal); (ii) an employment programme specified in regulation 75(1)(a)(ii)(cc) of the JSA Regulations (Environmental Task Force Option of the New Deal) or regulation 75(1)(a)(iii) of the JSA (NI) Regulations; or (iii) the Intensive Activity Period of the New Deal Pilots for 25 plus specified in regulation 75(1)(a)(iv) of the JSA Regulations or, in Northern Ireland, the Preparation for Employment Programme specified in regulation 75(1)(a)(v) of the JSA (NI) Regulations(4); or (b) a written arrangement entered into between— (i) the Secretary of State and the person who has arranged for the claimant’s participation in the Intensive Activity Period of the New Deal for 25 plus and which is made in respect of his participation in that Period; or (ii) the Department for Employment and Learning and the person who has arranged for the claimant’s participation in the Preparation for Employment Programme and which is made in respect of the claimant’s participation in the Programme.

4.  Any discretionary payment pursuant to section 2 of the Employment Act, or, in Northern Ireland, section 1(1) of the Employment and Training Act (Northern Ireland) 1950 to meet, or help to meet, special needs in respect of the claimant’s participation in the Full-Time Education and Training Option of the New Deal as specified in regulation 75(1)(b)(ii) of the JSA Regulations or of the JSA (NI) Regulations.

5.  Any— (a) education maintenance allowance in accordance with regulations made under section 518 of the Education Act 1996(5) (payment of school expenses; grant of scholarships etc.); or (b) payment (not within sub-paragraph (a)) in respect of a course of study attended by a child or qualifying young person payable— (i) in accordance with regulations made under section 518 of the Education (Scotland) Act 1980(6) (power to assist persons to take advantage of educational facilities) or section 12(2)(c) of the Further and Higher Education (Scotland) Act 1992(7) (provision of financial assistance to students); or (ii) by virtue of regulations made Article 50, 51 or 55(1) of the Education and Libraries (Northern Ireland) Order 1986 (provisions to assist persons to take advantage of educational facilities)(8).

6.  Any payment made by an employment zone contractor payable in respect of the claimant’s participation in the employment zone programme by way of— (a) a training premium; (b) a discretionary payment, being a fee, grant, loan or otherwise; or (c) any arrears of subsistence allowance paid as a lump sum.

7.  Any payment made in accordance with— (a) a course of training or instruction funded by or on behalf of the Secretary of State for Work and Pensions, the National Assembly for Wales, the Scottish Enterprise or the Highlands and Islands Enterprise or the Department for Social Development; or (b) an employment zone programme, by way of monies accumulated in order to assist in the pursuit of self-employed earner’s employment which are paid after the claimant has ceased to participate in the course or programme.

8.  An amount of income equal to any qualifying maintenance payment within section 347B of the Taxes Act(9).

9.  Any payment in respect of a child made— (a) by a local authority under section 23(2)(a) of the Children Act 1989 or section 21 of the Social Work (Scotland) Act 1968(10); (b) by a voluntary organisation under section 59(1)(a) of the Children Act 1989; (c) by a care authority under regulation 9 of the Boarding Out and Fostering of Children (Scotland) Regulation 1985(11) (provision of accommodation and maintenance for children by local authorities and voluntary organisations); or (d) by an authority (within the meaning of the Children (Northern Ireland) Order 1995(12)) to a person caring for a child by virtue of arrangements made under Article 27(2)(a) of that Order (provision of accommodation and maintenance by an authority for children whom it is looking after) or by a voluntary organisation under Article 75(1)(a) of that Order (provision of accommodation by voluntary organisations); except to the extent that it is taxable as the profits of a trade, profession or vocation.

10.  Any payment of maintenance, whether under a court order or not, which is made or due to be made by— (a) the claimant’s former partner, or the claimant’s partner’s former partner; or (b) the parent of a child or qualifying young person where that child or qualifying young person is a member of the claimant’s household except where that parent is the claimant or the claimant’s partner.

11.  Any payment in respect of a child or qualifying young person who is a member of the claimant’s household made— (a) in accordance with regulations made under section 57A of the Adoption Act 1976(13), section 51 of the Adoption (Scotland) Act 1978(14) or Article 59A of the Adoption (Northern Ireland) Order 1987(15) (schemes for payments of allowances to adopters); (b) by a local authority in pursuance of paragraph 15(1) of Schedule 1 to the Children Act 1989(16) (local authority contribution to child’s maintenance); (c) by an authority, as defined in Article 2 of the Children (Northern Ireland) Order 1995(17), in pursuance of Article 15 of, and paragraph 17 of Schedule 1 to, that Order (contribution by an authority to child’s maintenance).

12.  Any payment in respect of travelling expenses— (a) in relation to England and Wales, under regulation 3, 5 or 8 of the National Health Service (Travelling Expenses and Remission of Charges) Regulations 1988(18); (b) in relation to Scotland, under regulation 3, 5 or 8 of the National Health Service (Travelling Expenses and Remission of Charges) (Scotland) Regulations 1988(19); (c) in relation to Northern Ireland under regulation 3, 5 or 8 of the Travelling Expenses and Remission of Charges Regulations (Northern Ireland) 1989(20); or (d) made by the Secretary of State for Health, the Scottish Ministers, the Secretary of State for Wales, or the Department of Health, Personal Social Services and Public Safety and which is analogous to a payment specified in paragraph (a), (b) or (c).

13.  Any payment made by the Secretary of State or the Scottish Ministers under a scheme established to assist relatives and other persons to visit persons in custody.

14.  Any payment under the Community Care (Direct Payments Act) 1996(21), section 12B of the Social Work (Scotland) Act 1968(22) or Article 15A of the Health and Personal Social Services (Direct Payments) (Northern Ireland) Order 1996(23).

15.  Any payment of a voucher provided under section 95 or 98 of the Immigration and Asylum Act 1999(24) for any former asylum-seeker or his dependants.

16.  Any payment of a provident benefit by a trade union. Here— “provident benefit” has the meaning given in section 467(2) of the Taxes Act; and “trade union” has the meaning given in section 467(4) of the Taxes Act.

Table 7

Sums disregarded in calculating income if conditions are satisfied

1. Description of payment	2. Condition that must be satisfied
1.  Any payment in respect of any expenses incurred by a claimant who is engaged by a charitable or voluntary organisation or is a volunteer.	The claimant does not receive remuneration or profit from the engagement and is not treated as possessing any employment income under regulation 17 in respect of that engagement.
2.  A payment by way of— (a) travelling expenses reimbursed to the claimant; (b) a living away from home allowance under section 2(2)(d) of the Employment Act(25), section 2(4)(c) of the Enterprise and New Towns (Scotland) Act 1990(26) or section 1 of the Employment and Training Act (Northern Ireland) 1950(27); (c) training grant; or (d) child care expenses reimbursed to the claimant in respect of his participation in— (i) a New Deal option, (ii) the Intensive Activity Period of the New Deal Pilots for 25 plus, or (iii) the Preparation for Employment Programme.	The claimant— (a) participates in arrangements for training made under— (i) section 2 of the Employment Act; (ii) section 2 of the Enterprise and New Towns (Scotland) Act 1990; or (iii) section 1 of the Employment and Training Act (Northern Ireland) 1950; or (b) attends a course at an employment rehabilitation centre established under section 2 of the Employment Act.

Table 8

Sums partly disregarded in the calculation of income

Type of payment to be disregarded	Limit on, or exception to, the extent of disregard
1.  Any discretionary payment made pursuant to section 2 of the Employment Act, or, in Northern Ireland section 1(1) of the Employment and Training Act (Northern Ireland) 1950 to meet, or help meet, the claimant’s special needs in undertaking a qualifying course within the meaning of regulation 17A(7) of the JSA Regulations(28) or regulation 17A(7) of the JSA (NI) Regulations.	A payment is not within this item to the extent that it relates to travel expenses incurred as a result of the claimant’s attendance on the course if an amount in respect of those expenses has already been disregarded pursuant to regulation 8.
2.  Any payment made in respect of a career development loan paid pursuant to section 2 of the Employment Act.	A payment is not within this item to the extent that the loan has been applied for or paid in respect of living expenses for the period of education and training supported by the loan.
3.  Any payment made to the claimant or his partner in respect of a person who is not normally a member of the claimant’s household but is temporarily in his care, by— (a) a health authority; (b) a local authority; (c) a voluntary organisation; (d) that person pursuant to section 26(3A) of the National Assistance Act 1948(29); (e) a primary care trust established under section 16A of the National Health Service Act 1977(30).	A payment is only to be disregarded by virtue of this item if any profits or gains arising from the payment mentioned in column 1 are treated as nil by paragraph 9 of Schedule 10 to the Finance (No. 2) Act 1992.
4.  Any payment made in Northern Ireland to the claimant or his partner in respect of a person who is not normally a member of the claimant’s household but is temporarily in his care— (a) pursuant to Article 36(7) of the Health and Personal Social Services (Northern Ireland) Order 1972(31) by an authority; a voluntary organisation; or the person concerned, or (b) by a training school within the meaning of section 137 of the Children and Young Persons Act (Northern Ireland) 1968(32). In this item “an authority” has the meaning given by Article 2 of the Children (Northern Ireland) Order 1995.	A payment is only to be disregarded by virtue of this item if any profits or gains arising from the payment mentioned in column 1 are treated as nil by paragraph 9 of Schedule 10 to the Finance (No. 2) Act 1992.
5.  Any payment under an insurance policy taken out to insure against the risk of being unable to maintain the repayments— (a) on a loan which is secured on the dwelling house which the claimant occupies as his home; or (b) under a regulated agreement or under a hire-purchase agreement or a conditional sale agreement. For the purposes of paragraph (b)— “regulated agreement” has the meaning given in the Consumer Credit Act 1974(33); and “hire-purchase agreement” and “conditional sale agreement” have the meanings given in Part 3 of the Hire-Purchase Act 1964(34).	A payment is only to be disregarded by virtue of this item to the extent that it is used to— (a) maintain the repayments referred to in column (1); and (b) meet any amount due by way of premiums on— (i) that policy; or (ii) in a case to which paragraph (a) of this item applies, an insurance policy taken out to insure against loss or damage to any building or part of a building which is occupied by the claimant as his home and which is required as a condition of the loan referred to in column (1).
5.  Any payment in respect of the claimant’s attendance at court as a juror or witness.	This item applies only to the extent that the payment is not compensation for loss of earnings or for the loss of payment of social security income.
6.  Any payment of a sports award except to the extent that it has been made in respect of living expenses.	For the purposes of this item “living expenses” does not include— (a) the cost of vitamins, minerals or other special dietary supplements intended to enhance the performance of the claimant in the sport in respect of which the award was made; or (b) accommodation costs incurred as a consequence of living away from home whilst training for, or competing in, the sport in respect of which the award was made.

(1)

1944 c. 10. Section 15 was amended by section 61 of the Disability Discrimination Act 1995 (c. 50).

(2)

1945 c. 6 (N.I.).

(3)

1950 c. 29 (N.I.).

(4)

Paragraph (1)(a)(v) was inserted by regulation 5(a) of S.R. 2001 No. 151.

(5)

1996 c. 56. Section 518 was substituted by section 129 of the Schools Standards and Framework Act 1998 (c. 31).

(6)

1980 c. 44.

(7)

1992 c. 37.

(8)

S.I. 1986/594 (N.I. 3). Article 55(1) was amended by Schedule 5 to the Education and Libraries (Northern Ireland) Order 1993 (S.I. 1993/2810 (N.I. 12)).

(9)

1988 c. 1. Section 347B was inserted by section 36 of the Finance Act 1988 (c. 39) and amended (for the tax year beginning on 6th April 1990 and subsequent tax years) by paragraph 13 of Schedule 3, further amended by Part 8 of Schedule 14 to the Finance Act 1988, section 5 of and paragraph 6 of Schedule 4 to the Contracts (Applicable Law) Act 1990 (c. 36), sections 61 and 62 of the Finance (No. 2) Act 1992 (c. 48), section 79 to and Schedule 26 Part 5(1) to the Finance Act 1994 (c. 9), paragraphs 11 and 15 of Schedule 2 to the Jobseekers Act 1995 (c. 18), section 27 to and Schedule 27 Part 3(1) of the Finance Act 1998 (c. 36) and sections 36 and 139 of and Schedule 20 Part 3(6) to the Finance Act 1999 (c. 16).

(10)

1968 c. 49.

(11)

S.I. 1985/1799.

(12)

S.I. 1995/755 (N.I. 2).

(13)

1976 c. 36. Section 57A was inserted by paragraph 25 of Schedule 10 to the Children Act 1989 (c. 41).

(14)

1978 c. 28.

(15)

S.I. 1987/2203 (N.I. 22). Article 59A was inserted by paragraph 164 of Schedule 9 to the Children (Northern Ireland) Order 1995 (S.I. 1995/555 (N.I. 2)).

(16)

1989 c. 41.

(17)

S.I. 1995/755 (N.I. 2).

(18)

S.I. 1988/551.

(19)

S.I. 1988/546.

(20)

S.R. 1989 No. 348, modified by S.R. 1990 No. 164.

(21)

1996 c. 30.

(22)

1968 c. 49.

(23)

S.I. 1972/1265 (N.I. 14). Article 15A was inserted by Article 3 of the Personal Social Services (Direct Payments) (Northern Ireland) Order (S.I. 1996/1923 (N.I. 19)).

(24)

1999 c. 33.

(25)

Section 2 was substituted by section 25 of the Employment Act 1988 (c. 19) and amended by section 29(4) of and Schedule 7 Part 1 to the Employment Act 1989 (c. 38) and section 47(1) of the Trade Union Reform and Employment Rights Act 1993 (c. 19).

(26)

1990 c. 35.

(27)

1950 c. 29.

(28)

Regulation 17A(7) was amended by regulation 2(4) of S.I. 1998/2874 and regulation 2 of S.I. 1999/3083.

(29)

1948 c. 29. Section 26(3A) was inserted by section 42(4) of the National Health Service and Community Care Act 1990 (c. 19).

(30)

1977 c. 49. Section 16A was inserted by section 2 of the Health Act 1999 (c. 8).

(31)

S.I. 1972/1265 (N.I. 14). Article 36 was substituted by Article 25 of S.I. 1991/194 (N.I. 1) and amended by paragraph 2(4) and (5) of Schedule 1 to S.I. 1992/3204 (N.I. 20).

(32)

1968 c. 34 (N.I.). Section 137 was amended by Schedule 18 to the Health and Personal Social Services (Northern Ireland) Order 1972 and Article 185(1) of, and paragraph 42 of Schedule 9 to, the Children (Northern Ireland) Order 1995 (S.I. 1995/755 (N.I. 2)).

(33)

1974 c. 39.

(34)

1964 c. 53.