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The Council Tax Reduction Schemes and Prescribed Requirements (Wales) Regulations 2013

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Notional income: persons who are not pensioners

19.—(1) An applicant who is not a pensioner is to be treated as possessing income of which that applicant has deprived himself or herself for the purpose of securing entitlement to a reduction or increasing the amount of the reduction.

(2) Except in the case of—

(a)a discretionary trust;

(b)a trust derived from a payment made in consequence of a personal injury;

(c)a personal pension scheme, occupational pension scheme or a payment made by the Board of the Pension Protection Fund where the applicant has not attained the qualifying age for state pension credit;

(d)any sum to which paragraph 48(2)(a) of Schedule 10 (capital to be disregarded) applies which is administered in the way referred to in paragraph 48(1)(a) of that Schedule;

(e)any sum to which paragraph 49(a) of Schedule 10 refers;

(f)rehabilitation allowance made under section 2 of the Employment and Training Act 1973;

(g)child tax credit;

(h)working tax credit, or

(i)any sum to which sub-paragraph (11) applies,

any income which would become available to the applicant upon application being made, but which has not been acquired by the applicant, is to be treated as possessed by the applicant but only from the date on which it could be expected to be acquired were an application made.

(3) Any payment of income, other than a payment of income specified in sub-paragraph (4), made—

(a)to a third party in respect of a single applicant or a member of the family (but not a member of the third party’s family) must, where that payment is a payment of an occupational pension, a pension or other periodical payment made under a personal pension scheme or a payment made by the Board of the Pension Protection Fund, be treated as possessed by that single applicant or, as the case may be, by that member;

(b)to a third party in respect of a single applicant or in respect of a member of the family (but not a member of the third party’s family) must, where it is not a payment referred to in paragraph (a), be treated as possessed by that single applicant or by that member to the extent that it is used for the food, ordinary clothing or footwear, household fuel or rent of that single applicant or, as the case may be, of any member of that family or is used for any council tax or water charges for which that applicant or member is liable;

(c)to a single applicant or a member of the family in respect of a third party (but not in respect of another member of that family) must be treated as possessed by that single applicant or, as the case may be, that member of the family to the extent that it is kept or used by that single applicant or used by or on behalf of any member of the family.

(4) Sub-paragraph (3) does not apply in respect of a payment of income made—

(a)under or by the Trusts, the Fund, the Eileen Trust, MFET Limited, the Skipton Fund, the Caxton Foundation or the Independent Living Fund (2006);

(b)pursuant to section 19(1)(a) of the Coal Industry Act 1994(1) (concessionary coal);

(c)pursuant to section 2 of the Employment and Training Act 1973 in respect of a person’s participation—

(i)in an employment programme specified in regulation 75(1)(a) of the Jobseeker’s Allowance Regulations 1996(2);

(ii)in a training scheme specified in regulation 75(1)(b) of those Regulations; or

(iii)in a qualifying course within the meaning specified in regulation 17A(7) of those Regulations;

(d)in respect of a person’s participation in the Work for Your Benefit Pilot Scheme;

(e)in respect of a person’s participation in the Mandatory Work Activity Scheme;

(f)in respect of an applicant’s participation in the Employment, Skills and Enterprise Scheme;

(g)under an occupational pension scheme, in respect of a pension or other periodical payment made under a personal pension scheme or a payment made by the Board of the Pension Protection Fund where—

(i)a bankruptcy order has been made in respect of the person in respect of whom the payment has been made or, in Scotland, the estate of that person is subject to sequestration or a judicial factor has been appointed on that person’s estate under section 41 of the Solicitors (Scotland) Act 1980(3);

(ii)the payment is made to the trustee in bankruptcy or any other person acting on behalf of the creditors; and

(iii)the person referred to in sub-paragraph (i) and any member of that person’s family does not possess, or is not treated as possessing, any other income apart from that payment.

(5) Where an applicant is in receipt of any benefit under the benefit Acts and the rate of that benefit is altered with effect from a date on or after 1 April in any year but not more than 14 days thereafter, the authority must treat the applicant as possessing such benefit at the altered rate from either 1 April or the first Monday in April in that year, whichever date the authority selects, to the date on which the altered rate is to take effect.

(6) Subject to sub-paragraph (7), where—

(a)an applicant performs a service for another person; and

(b)that person makes no payment of earnings or pays less than that paid for a comparable employment in the area,

the authority must treat the applicant as possessing such earnings (if any) as is reasonable for that employment unless the applicant satisfies the authority that the means of that person are insufficient for that person to pay or to pay more for the service.

(7) Sub-paragraph (6) does not apply—

(a)to an applicant who is engaged by a charitable or voluntary organisation or who is a volunteer if the authority is satisfied in any of those cases that it is reasonable for the applicant to provide those services free of charge; or

(b)in a case where the service is performed in connection with—

(i)the applicant’s participation in an employment or training programme in accordance with regulation 19(1)(q) of the Jobseeker’s Allowance Regulations 1996; or

(ii)the applicant’s or the applicant’s partner’s participation in an employment or training programme as defined in regulation 19(3) of those Regulations for which a training allowance is not payable or, where such an allowance is payable, it is payable for the sole purpose of reimbursement of travelling or meal expenses to the person participating in that programme; or

(c)to an applicant who is participating in a work placement approved by the Secretary of State (or a person providing services to the Secretary of State) before the placement starts.

(8) In sub-paragraph (7)(c) “work placement” (“lleoliad gwaith”) means practical work experience which is not undertaken in expectation of payment.

(9) Where an applicant is treated as possessing any income under any of sub-paragraphs (1) to (8), the foregoing provisions of this Part apply for the purposes of calculating the amount of that income as if a payment had actually been made and as if it were actual income which that applicant does possess.

(10) Where an applicant is treated as possessing any earnings under sub-paragraph (6) the foregoing provisions of this Part apply for the purposes of calculating the amount of those earnings as if a payment had actually been made and as if they were actual earnings which that applicant does possess except that paragraph 15(3) (calculation of net earnings of employed earners: persons who are not pensioners) does not apply and that applicant’s net earnings are to be calculated by taking into account those earnings which that applicant is treated as possessing, less—

(a)an amount in respect of income tax equivalent to an amount calculated by applying to those earnings the basic rate of tax applicable to the assessment period less only the personal relief to which the applicant is entitled under sections 35 to 37 of the Income Tax Act 2007 (personal allowances) as is appropriate to the applicant’s circumstances; but, if the assessment period is less than a year, the earnings to which the basic rate of tax is to be applied and the amount of the personal relief deductible under this sub-paragraph is to be calculated on a pro rata basis;

(b)an amount equivalent to the amount of the primary Class 1 contributions that would be payable by the applicant under the SSCBA in respect of those earnings if such contributions were payable; and

(c)one-half of any sum payable by the applicant by way of a contribution towards an occupational or personal pension scheme.

(11) Sub-paragraphs (1), (2), (3) and (6) do not apply in respect of any amount of income other than earnings, or earnings of an employed earner, arising out of the applicant’s participation in a service user group.

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