PART VIII INCOME AND CAPITAL
Chapter V Other Income
Calculation of income other than earnings103
1
For the purposes of regulation 94 (calculation of income other than earnings) F97... the income of a claimant which does not consist of earnings to be taken into account shall, subject to the following provisions of this regulation, be his gross income and any capital treated as income under F38regulations 104 and 106 (capital treated as income and modifications in respect of children and young persons)F38regulation 104 (capital treated as income).
2
There shall be disregarded from the calculation of a claimant’s gross income under paragraph (1) any sum, where applicable, specified in Schedule 7.
3
Where the payment of any benefit under the Act or under the Benefits Act is subject to any deduction by way of recovery, the amount to be taken into account under paragraph (1) shall be the gross amount to which the beneficiary is entitled.
F524
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F345
F77Paragraphs (5ZA) and (5AZA) apply where—
a
a relevant payment has been made to a person in an academic year; and
b
that person abandons, or is dismissed from, his course of study before the payment to him of the final instalment of the relevant payment.
5ZA
F78Where a relevant payment is made quarterly, the amount of a relevant payment to be taken into account for the assessment period for the purposes of paragraph (1) in respect of a person to whom paragraph (5) applies, shall be calculated by applying the formula—
where—
A = the total amount of the relevant payment which that person would have received had he remained a student until the last day of the academic term in which he abandoned, or was dismissed from, his course, less any deduction under regulation 136(5);
B = the number of benefit weeks from the benefit week immediately following that which includes the first day of that academic year to the benefit week immediately before that which includes the day on which the person abandoned, or was dismissed from, his course;
C = the weekly amount of the relevant payment, before the application of the £10 disregard, which would have been taken into account as income under regulation 136(2) had the person not abandoned or been dismissed from, his course and, in the case of a person who was not entitled to a jobseeker’s allowance immediately before he abandoned or was dismissed from his course, had that person, at that time, been entitled to a jobseeker’s allowance;
D = the number of benefit weeks in the assessment period.
F795AZA
Where a relevant payment is made by two or more instalments in a quarter, the amount of a relevant payment to be taken into account for the assessment period for the purposes of paragraph (1) in respect of a person to whom paragraph (5) applies, shall be calculated by applying the formula in paragraph (5ZA) but as if—
- A
the total amount of relevant payments which that person received, or would have received, from the first day of the academic year to the day the person abandoned the course, or was dismissed from it, less any deduction under regulation 136(5).
5ZB
F80In this regulation—
“academic year” and “student loan” shall have the same meanings as for the purposes of Chapter IX of this Part;
F81“assessment period” means—
- a
in a case where a relevant payment is made quarterly, the period beginning with the benefit week which includes the day on which the person abandoned, or was dismissed from, his course and ending with the benefit week which includes the last day of the last quarter for which an instalment of the relevant payment was payable to that person;
- b
in a case where the relevant payment is made by two or more instalments in a quarter, the period beginning with the benefit week which includes the day on which the person abandoned, or was dismissed from, his course and ending with the benefit week which includes—
- i
the day immediately before the day on which the next instalment of the relevant payment would have been due had the payments continued; or
- ii
the last day of the last quarter for which an instalment of the relevant payment was payable to that person,
whichever of those dates is earlier;
- i
F82“quarter” in relation to an assessment period means a period in that year beginning on—
- a
1st January and ending on 31st March;
- b
1st April and ending on 30th June;
- c
1st July and ending on 31st August; or
- d
1st September and ending on 31st December;
“relevant payment” means either a student loan or an amount intended for the maintenance of dependants referred to in regulation 131(5A) or both.
F85A
In the case of income to which regulation 94(2B) applies (calculation of income of former full-time students), the amount of income to be taken into account for the purposes of paragraph (1) shall be the amount of that income calculated in accordance with regulation 97(7) and on the basis that none of that income has been repaid.
F835B
Where the claimant—
a
is a member of a couple;
b
his partner is receiving a contributory employment and support allowance; and
c
that benefit has been reduced under regulation 63 of the Employment and Support Allowance Regulations,
the amount of that benefit to be taken into account is the amount as if it had not been reduced.
6
For the avoidance of doubt there shall be included as income to be taken into account under paragraph (1)
F25a
any payment to which regulation 98(2)(a) to (e) or 100(2) (payments not earnings) applies; or
b
in the case of a claimant who is receiving support under section 95 or 98 of the Immigration and Asylum Act including support provided by virtue of regulations made under Schedule 9 to that Act, the amount of such support provided in respect of essential living needs of the claimant and his F39dependantsF39partner (if any) as is specified in regulations made under paragraph 3 of Schedule 8 to the Immigration and Asylum Act.
Capital treated as income104
1
Any capital payable by instalments which are outstanding on the first day in respect of which an income-based jobseeker’s allowance is payable, or, in the case of a F16suppression, the date of that F16suppression, shall, if the aggregate of the instalments outstanding and the amount of the claimant’s capital otherwise calculated in accordance with Chapter VI of this Part exceeds F64... F11£16,000 be treated as income.
2
Any payment received under an annuity shall be treated as income.
3
F40In the case of a person who is, or would be, prevented from being entitled to a jobseeker’s allowance by section 14 (trade disputes), any payment under F35section 17, 23B, 23C or 24A of the Children Act 1989F1 or, as the case may be, F51section 12 of the Social Work (Scotland) Act 1968 or sections 29 or 30 of the Children (Scotland) Act 1995F2 (local authorities’ duty to promote welfare of children and powers to grant financial assistance to persons in, or formerly in, their care) shall be treated as income.
4
Any earnings to the extent that they are not a payment of income shall be treated as income.
F125
Any Career Development Loan paid pursuant to section 2 of the Employment and Training Act 1973 shall be treated as income.
F366
Where an agreement or court order provides that payments shall be made to the claimant in consequence of any personal injury to the claimant and that such payments are to be made, wholly or partly, by way of periodical payments, any such periodical payments received by the claimant (but not a payment which is treated as capital by virtue of this Part), shall be treated as income.
Notional income105
F1001
A claimant is to be treated as possessing income of which the claimant has deprived themselves for the purpose of securing entitlement to a jobseeker’s allowance or increasing the amount of that allowance, or for the purpose of securing entitlement to, or increasing the amount of income support or an employment and support allowance.
2
Except in the case of–
a
a discretionary trust;
b
a trust derived from a payment made in consequence of a personal injury;
d
F37working tax credit or child tax credit;
e
a jobseeker’s allowance;
F53f
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
g
F90ga
any sum to which paragraph (15A) applies;
F65h
any sum to which paragraph 42(2)(a) of Schedule 8 (capital to be disregarded) applies which is administered in the way referred to in paragraph 42(1)(a);
ha
any sum to which paragraph 43(a) of Schedule 8 refers; or
i
rehabilitation allowance made under section 2 of the Employment and Training Act 1973,
income which would become available to the claimant upon application being made but which has not been acquired by him shall be treated as possessed by him but only from the date on which it could be expected to be acquired were an application made.
F92A
F42This paragraph refers to child benefit payable in accordance with regulation 2(1)(a)(ii) of the Child Benefit and Social Security (Fixing and Adjustment of Rates) Regulations 1976 (weekly rate for only, elder or eldest child of a lone parent) but only to the extent that it exceeds the amount specified in regulation 2(1)(a)(i) of those Regulations.
F572B
A claimant who has attained the F94qualifying age for state pension credit shall be treated as possessing—
a
the amount of any income from an occupational pension scheme F61a personal pension scheme or the Board of the Pension Protection Fund —
i
for which no claim has been made, and
ii
to which he might expect to be entitled if a claim for it were made;
b
income from an occupational pension scheme which the claimant elected to defer,
but only from the date on which it could be expected to be acquired were an application for it to be made.
F673
This paragraph applies where a person F95who has attained the qualifying age for state pension credit—
a
is entitled to money purchase benefits under an occupational pension scheme or a personal pension scheme;
b
fails to purchase an annuity with the funds available in that scheme; and
c
either—
i
defers in whole or in part the payment of any income which would have been payable to him by his pension fund holder, or
ii
fails to take any necessary action to secure that the whole of any income which would be payable to him by his pension fund holder upon his applying for it, is so paid, or
iii
income withdrawal is not available to him under that scheme.
3A
Where paragraph (3) applies, the amount of any income foregone shall be treated as possessed by that person, but only from the date on which it could be expected to be acquired were an application for it to be made.
4
The amount of any income foregone in a case F71where paragraph (3)(c)(i) or (ii) applies shall be the maximum amount of income which may be withdrawn from the fund and shall be determined by F18the Secretary of State who shall take account of information provided by the pension fund holder in accordance with regulation 7(5) of the Social Security (Claims and Payments) Regulations 1987F3.
5
The amount of any income foregone in a case F68where paragraph (3)(c)(iii) applies shall be the income that the claimant could have received without purchasing an annuity had the fund held under the relevant F58occupational or personal pension scheme been held under a scheme where income withdrawal was available and shall be determined in the manner specified in paragraph (4).
F595A
In paragraph (3), “money purchase benefits” has the meaning it has in the Pension Schemes Act 1993.
6
Subject to paragraph (7), any income which is due to be paid to the claimant but has not been paid to him, shall be treated as possessed by the claimant.
7
Paragraph (6) shall not apply to–
a
any amount to which paragraph (8) or (9) applies;
b
a payment to which section 74(2) or (3) of the Administration Act applies (abatement of prescribed payments from public funds which are not made before the prescribed date, and abatement from prescribed benefits where maintenance not paid); and
c
a payment from a discretionary trust, or a trust derived from a payment made in consequence of a personal injury.
F24d
any earnings which are due to an employed earner on the termination of his employment by reason of redundancy but which have not been paid to him.
8
This paragraph applies to an amount which is due to be paid to the claimant under an occupational pension scheme but which is not paid because the trustees or managers of the scheme have suspended or ceased payment due to an insufficiency of resources.
9
This paragraph applies to any amount by which a payment made to the claimant from an occupational pension scheme falls short of the payment to which he was due under the scheme where the shortfall arises because the trustees or managers of the scheme have insufficient resources available to them to meet in full the scheme’s liabilities.
10
F15Any payment of income, other than a payment of income specified in paragraph (10A)—
a
to a third party in respect of a single claimant or in respect of a single claimant or F44in respect of a member of the familyF44his partner shall be treated—
i
in a case where that payment is derived from a payment of any benefit under the F86benefit Acts, a payment from the Armed Forces and Reserve Forces Compensation Scheme, a war disablement pension, war widow’s pension or war widower’s pension or a pension payable to a person as a widow, widower or surviving civil partner under any power of Her Majesty otherwise than under an enactment to make provision about pensions for or in respect of persons who have been disabled or have died in consequence of service as members of the armed forces of the Crown, as possessed by that single claimant, if it would normally be paid to him, or as possessed F43by that member of the family, if it would normally be paid to that memberF43by his partner, if it would normally be paid to his partner;
F23ia
in a case where that payment is a payment of an occupational pension F62, a pension or other periodical payment made under a personal pension scheme or a payment made by the Board of the Pension Protection Fund, as possessed by that single claimant or, as the case may be, by F45that memberF45the claimant’s partner;
ii
in any other case, as possessed by that single claimant F47or by that member of the familyF47or his partner to the extent that it is used for the food, ordinary clothing or footwear, household fuel, rent for which housing benefit is payable, or any housing costs to the extent that they are met under regulation 83(f)F30, 84(1)(g), 86A(d) or 86B(e), of that single claimant or, as the case may be, F47of any member of the familyF47of his partner, or is used for any council tax or water charges for which that claimant or F47member is liableF47partner is liable;
b
F48to a single claimant or a member of the family in respect of a third party (but not in respect of another member of the family) shall be treated as possessed by that single claimant or, as the case may be, that member of the family to the extent that it is kept or used by him or used by or on behalf of any member of the family;
F48to a single claimant or his partner in respect of a third party (but not in respect of another member of his family) shall be treated as possessed by that single claimant or, as the case may be, his partner, to the extent that it is kept or used by him or used by or on behalf of his partner;
but, except where sub-paragraph (a)(i) applies and in the case of a person who is, or would be, prevented from being entitled to a jobseeker’s allowance by section 14 (trade disputes), this paragraph shall not apply to any payment in kind F54to the third party.
C1F1410A
Paragraph (10) shall not apply in respect of a payment of income made—
a
b
pursuant to section 19(1)(a) of the Coal Industry Act 1994 (concessionary coal); or
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)(ii);
ii
in a training scheme specified in regulation 75(1)(b)(ii); or
iii
in a qualifying course within the meaning specified in regulation 17A(7)F89; or
iv
in the Flexible New Deal.
F98cb
in respect of a person's participation in the Mandatory Work Activity Scheme;
F99cc
in respect of a claimant's participation in the Employment, Skills and Enterprise Scheme;
F22d
under an occupational pension scheme F63, 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 F6;
ii
the payment is made to the trustee in bankruptcy or any other person acting on behalf of the creditors; and
11
Where the claimant F55resides in a care home, an Abbeyfield Home or an independent hospital, or is temporarily absent from such a home or hospital, any payment made by a person other than the claimant or a member of his family in respect of some or all of the cost of maintaining the claimant F46or a member of his family in that home shall be treated as possessed by the claimant or by that member of his familyF46or his partner in that home F85or hospital shall be treated as possessed by the claimant or his partner.
F2711A
Where the amount of a subsistence allowance paid to a claimant in a benefit week is less than the amount of income-based jobseeker’s allowance that person would have received in that benefit week had it been payable to him, less 50p, he shall be treated as possessing the amount which is equal to the amount of income-based jobseeker’s allowance which he would have received in that week, less 50p.
12
Where a claimant’s earnings are not ascertainable at the time of the determination of the claim or of any F20review or supersessionF19the Secretary of State shall treat the claimant as possessing such earnings as is reasonable in the circumstances of the case having regard to the number of hours worked and the earnings paid for comparable employment in the area.
13
F28Subject to paragraph (13A), where–
a
a claimant 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,
F2613A
Paragraph (13) shall not apply–
a
to a claimant who is engaged by a charitable or voluntary organisation or who is a volunteer if the Secretary of State is satisfied in any of those cases that it is reasonable for him to provide those services free of charge;
b
in a case where the service is performed in connection with–
i
ii
the claimant’s or the claimant’s partner’s participation in an employment or training programme as defined in regulation 19(3) 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 programmeF74; or
c
to a claimant 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.
14
Where a claimant is treated as possessing any income under any of paragraphs (1) to (11) the foregoing provisions of this Part shall 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 he does possess.
15
Where a claimant is treated as possessing any earnings under paragraphs (12) or (13) the foregoing provisions of this Part shall 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 he does possess, except that paragraph (4) of regulation 99 (calculation of net earnings of employed earners) shall not apply and his net earnings shall be calculated by taking into account the earnings which he is treated as possessing, less—
a
an amount in respect of income tax equivalent to an amount calculated by applying to those earnings F87... the basic rate of tax in the year of assessment less only the F69personal allowance to which the claimant is entitled under F70section 257(1) of the Income and Corporation Taxes Act 1988 F4 (F69personal allowance) as is appropriate to his circumstances; but, if the period over which those earnings are to be taken into account is less than a year, the earnings to which the F73F88basic rate of tax is to be applied and the amount of the F69personal allowance deductible under this paragraph shall be calculated on a pro rata basis;
b
where the weekly amount of those earnings equals or exceeds the lower earnings limit, an amount representing primary Class 1 contributions under the Benefits Act, calculated by applying to those earnings the initial and main primary percentages in accordance with section 8(1)(a) and (b) of that Act; and
c
one-half of any sum payable by the claimant in respect of a pay period by way of a contribution towards an occupational or personal pension scheme.
F9115A
Paragraphs (1), (2), (6), (10) (12) and (13) shall not apply in respect of any amount of income other than earnings, or earnings derived from employment as an employed earner, arising out of the claimant’s participation in a service user group.
16
In this regulation–
“ordinary clothing or footwear" means clothing or footwear for normal daily use, but does not include school uniforms, or clothing or footwear used solely for sporting activities;
“pension fund holder" means with respect to a personal pension scheme F66or an occupational pension scheme the trustees, managers or scheme administrators, as the case may be, of the scheme concerned;
“resources" has the same meaning as in section 181 of the Pension Schemes Act 1993F5.
F72“work placement” means practical work experience which is not undertaken in expectation of payment.
Modifications in respect of children and young persons106
F501
Any capital of a child or young person payable by instalments which are outstanding on the first day in respect of which an income-based jobseeker’s allowance is payable or, in the case of a F21suppression, the date of that F21suppression, shall, if the aggregate of the instalments outstanding and the amount of that child or young person’s other capital calculated in accordance with Chapter VI of this Part in like manner as for the claimant would exceed £3,000, be treated as income.
2
In the case of a child or young person who is residing at an educational establishment at which he is receiving relevant education—
a
any payment made to the educational establishment, in respect of that child’s or young person’s maintenance, by or on behalf of a person who is not a member of the family or by a member of the family out of funds contributed for that purpose by a person who is not a member of the family, shall be treated as income of that child or young person but it shall only be taken into account over periods during which that child or young person is present at that educational establishment; and
b
if a payment has been so made, for any period in a benefit week in term-time during which that child or young person returns home, he shall be treated as possessing an amount of income in that week calculated by multiplying the amount of F33personal allowance, any disabled child premium and any enhanced disability premium applicable in respect of that child or young person by the number equal to the number of days in that week in which he was present at his educational establishment and dividing the product by seven; but this sub-paragraph shall not apply where the educational establishment is provided under section 8 of the Education Act 1944 F6 (duty of local authority to secure primary and secondary schools) by a local education authority or where the payment is made under section 49 or 50 of the Education (Scotland) Act 1980 F7 (power of education authority to assist persons).
3
Where a child or young person–
a
is resident at an educational establishment and he is wholly or partly maintained at that establishment by a local education authority under section 8 of the Education Act 1944; or
b
is maintained at an educational establishment under section 49 or 50 of the Education (Scotland) Act 1980, he shall for each day he is present at that establishment be treated as possessing an amount of income equal to the sum obtained by dividing the amount of F33personal allowance, any disabled child premium and any enhanced disability premium applicable in respect of him by seven.
4
Where the income of a child or young person who is a member of the claimant’s family calculated in accordance with Chapters I to V of this Part exceeds the amount of the F33personal allowance, any disabled child premium and any enhanced disability premium applicable in respect of that child or young person, the excess shall not be treated as the income of the claimant.
5
Where the capital of a child or young person if calculated in accordance with Chapter VI of this Part in like manner as for the claimant, except as provided in paragraph (1), would exceed £3,000, any income of that child or young person shall not be treated as the income of the claimant.
6
In calculating the net earnings or net profit of a child or young person there shall be disregarded (in addition to any sum which falls to be disregarded under paragraphs 14 to 16), any sum specified in paragraphs 17 and 18 of Schedule 6 (earnings to be disregarded).
7
Any income of a child or young person which is to be disregarded under Schedule 7 (income other than earnings to be disregarded) shall be disregarded in such manner as to produce the result most favourable to the claimant.
8
Where a child or young person is treated as possessing any income under paragraphs (2) or (3) the foregoing provisions of this Part shall apply for the purposes of calculating that income as if a payment had actually been made and as if it were actual income which he does possess.
9
For the purposes of this regulation, a child or young person shall not be treated as present at his educational establishment on any day if on that day he spends the night with the claimant or a member of his household.