PART VIII INCOME AND CAPITAL
Chapter V Other Income
Notional income105
F671
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
F22working tax credit or child tax credit;
e
a jobseeker’s allowance;
F32f
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
g
F59ga
any sum to which paragraph (15A) applies;
F43h
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.
F32A
F24This 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.
F362B
A claimant who has attained the F63qualifying age for state pension credit shall be treated as possessing—
a
the amount of any income from an occupational pension scheme F40a 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.
F453
This paragraph applies where a person F64who 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 F47where paragraph (3)(c)(i) or (ii) applies shall be the F80rate of the annuity which may have been purchased with the fund and shall be determined by F9the 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 1987F1.
5
The amount of any income foregone in a case F46where 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 F37occupational 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).
F385A
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.
F14d
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
F7Any 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 F26in respect of a member of the familyF26his partner shall be treated—
i
in a case where that payment is derived from a payment of any benefit under the F55benefit 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 F25by that member of the family, if it would normally be paid to that memberF25by his partner, if it would normally be paid to his partner;
F13ia
in a case where that payment is a payment of an occupational pension F41, 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 F27that memberF27the claimant’s partner;
ii
in any other case, as possessed by that single claimant F29or by that member of the familyF29or 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)F19, 84(1)(g), 86A(d) or 86B(e), of that single claimant or, as the case may be, F29of any member of the familyF29of his partner, or is used for any council tax or water charges for which that claimant or F29member is liableF29partner is liable;
b
F30to 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;
F30to 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 F33to the third party.
C1F610A
Paragraph (10) shall not apply in respect of a payment of income made—
a
under F65or by the Macfarlane Trust, the Macfarlane (Special Payments) Trust, the Macfarlane (Special Payments) (No.2) Trust, the Fund, the Eileen Trust F61, MFET LimitedF68, the Skipton Fund, the Caxton FoundationF77, the Scottish Infected Blood Support SchemeF79, an approved blood schemeF78, the London Emergencies Trust, the We Love Manchester Emergency FundF81, the National Emergencies Trust or the Independent Living F53Fund (2006);
F82ab
which is a Grenfell Tower payment;
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)F58; or
iv
in the Flexible New Deal.
F66cb
in respect of a person's participation in the Mandatory Work Activity Scheme;
F70cc
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F69cc
in respect of a claimant's participation in a scheme prescribed in regulation 3 of the Jobseeker's Allowance (Schemes for Assisting Persons to Obtain Employment) Regulations 2013;
F72cd
in respect of a person’s participation in a scheme prescribed in regulation 3 of the Jobseeker’s Allowance (Supervised Jobsearch Pilot Scheme) Regulations 2014;
F12d
under an occupational pension scheme F42, 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 F34resides 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 F28or a member of his family in that home shall be treated as possessed by the claimant or by that member of his familyF28or his partner in that home F54or hospital shall be treated as possessed by the claimant or his partner.
F1611A
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 F11review or supersessionF10the 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
F17Subject 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,
F1513A
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 programmeF50; 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 F56... the basic rate F73, or in the case of a Scottish taxpayer, the Scottish basic rate, of tax in the year of assessment less only the F74personal reliefs to which the claimant is entitled under Chapters 2, 3 and 3A of Part 3 of the Income Tax Act 2007 as are 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 F49F57basic rate F75, or the Scottish basic rate, of tax is to be applied and the amount of the F76personal reliefs 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.
F6015A
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 F71claimant participating as a service user.
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 F44or 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 1993F2.
F48“work placement” means practical work experience which is not undertaken in expectation of payment.