34.—(1) A claimant shall be treated as possessing capital of which he has deprived himself for the purpose of securing entitlement to [F1working families' tax credit] or increasing the amount of that benefit [F2except—
(a)where that capital is derived from a payment made in consequence of any personal injury and is placed on trust for the benefit of the claimant; or
(b)to the extent that the capital which he is treated as possessing is reduced in accordance with regulation 34A (diminishing notional capital rule);] [F3or
(c)any sum to which paragraph 46(a) or 47(a) of Schedule 3 (disregard of compensation for personal injuries which is administered by the Court) refers,]
(2) Except in the case of—
(a)a discretionary trust;
(b)a trust derived from a payment made in consequence of a personal injury; or
(c)any loan which would be obtainable only if secured against capital disregarded under Schedule 3; [F4or
(d)a personal pension scheme or retirement annuity contract,]
(e)[F5any sum to which paragraph 46(a) or 47(a) of Schedule 3 (disregard of compensation for personal injuries which is administered by the Court) refers,]
any capital 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.
(3) [F6Any payment of capital, other than a payment of capital specified in paragraph (3A)] [F7of those Regulations] made—
[F8(a)to a third party in respect of a member of [F9the family] (but not a member of the third party’s family) shall be treated as possessed by that member of the family to the extent that it is used for his food, ordinary clothing or footwear, household fuel F10 ... or housing costs [F11or is used for any personal community [F12charge,] collective community charge contribution [F13or council tax] for which that member is liable]; and in this sub-paragraph the expression “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;]
(b)to 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 member to the extent that it is kept by him or used on behalf of any member of the family.
[F14(3A) Paragraph (3) shall not apply in respect of a payment of capital made—
(a)under the Macfarlane Trust, the Macfarlane (Special Payments) Trust, the Macfarlane (Special Payments) (No.2) Trust, the Fund, the Eileen Trust or the Independent Living Funds; or
(b)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
(iia)[F15in the Intensive Activity Period specified in regulation 75(1)(a)(iv) of those Regulations or in the Intensive Activity Period for 50 plus; or]
(iii)in a qualifying course within the meaning specified in regulation 17A(7).]
(4) Where a claimant stands in relation to a company in a position analogous to that of a sole owner or partner in the business of that company, he shall be treated as if he were such sole owner or partner and in such a case—
(a)the value of his holding in that company shall, notwithstanding regulation 29 (calculation of capital), be disregarded; and
(b)he shall, subject to paragraph (5), be treated as possessing an amount of capital equal to the value or, as the case may be, his share of the value of the capital of that company and the foregoing provisions of this Chapter shall apply for the purposes of calculating that amount as if it were actual capital which he does possess.
(5) For so long as the claimant undertakes activities in the course of the business of the company, the amount which he is treated as possessing under paragraph (4) shall be disregarded.
(6) Where a claimant is treated as possessing capital under any of paragraphs (1) to (4) the foregoing provisions of this Chapter shall apply for the purposes of calculating its amount as if it were actual capital which he does possess.
[F16(7) For the avoidance of doubt a claimant is to be treated as possessing capital under paragraph (1) only if the capital of which he has deprived himself is actual capital.]
Textual Amendments
F1Words in reg. 34(1) substituted (5.10.1999) by The Tax Credits Schemes (Miscellaneous Amendments) Regulations 1999 (S.I. 1999/2487), regs. 1(1), 26(1), Sch. 1 para. 1(xii)
F2Words in reg. 34(1) substituted (2.10.1990) by Family Credit (General) Amendment No. 2 Regulations 1990 (S.I. 1990/1774), reg. 1(1), 2
F3Reg. 34(1)(c) and preceding word inserted (7.10.1997) by The Income-related Benefits and Jobseeker’s Allowance (Amendment) (No. 2) Regulations 1997 (S.I. 1997/2197), regs. 1(1), 3
F4Reg. 34(2)(d) and preceding word added (with effect in accordance with reg. 1(3) of the amending S.I.) by The Income-related Benefits Schemes and Social Security (Claims and Payments) (Miscellaneous Amendments) Regulations 1995 (S.I. 1995/2303), regs. 1(1)(b), 4(5)
F5Reg. 34(2)(e) and preceding word inserted (7.10.1997) by The Income-related Benefits and Jobseeker’s Allowance (Amendment) (No. 2) Regulations 1997 (S.I. 1997/2197), regs. 1(1), 3
F6Words in reg. 34(3) substituted (24.9.1998) by The Social Security Amendment (New Deal) (No.2) Regulations 1998 (S.I. 1998/2117), regs. 1(1), 3(1)(a)
F7Words in reg. 34(3) inserted (5.1.1998) by The Social Security Amendment (New Deal) Regulations 1997 (S.I. 1997/2863), regs. 1(1), 17(5), (6)(c)
F8Reg. 34(3)(a) substituted (12.9.1988) by Family Credit (General) Amendment No. 3 Regulations 1988 (S.I. 1988/1438), reg. 1(1)(b), 5
F9Words in reg. 34(3)(a) inserted (5.12.1988) by Family Credit (General) Amendment No. 4 Regulations 1988 (S.I. 1988/1970), reg. 1(1), 10(b)
F10Words in reg. 34(3)(a) omitted (8.10.1991) by The Family Credit (General) Amendment Regulations 1991 (S.I. 1991/1520), reg. 1(1), 5(a)
F11Words in reg. 34(3)(a) inserted (8.10.1991) by The Family Credit (General) Amendment Regulations 1991 (S.I. 1991/1520), reg. 1(1), 5(b)
F12Word in reg. 34(3)(a) substituted (1.4.1993) by The Income-related Benefits Schemes (Miscellaneous Amendments) Regulations 1993 (S.I. 1993/315), regs. 1(1)(c), Sch. para 8(a)
F13Word in reg. 34(3)(a) inserted (1.4.1993) by The Income-related Benefits Schemes (Miscellaneous Amendments) Regulations 1993 (S.I. 1993/315), regs. 1(1)(c), Sch. para 8(b)
F14Reg. 34(3A) inserted (24.9.1998) by The Social Security Amendment (New Deal) (No.2) Regulations 1998 (S.I. 1998/2117), regs. 1(1), 3(1)(b)
F15Reg. 34(3A)(b)(iia) inserted (24.4.2001) by The Tax Credits (New Deal Consequential Amendments) Regulations 2001 (S.I. 2001/1334), regs. 1, 7(2)
F16Reg. 34(7) inserted (11.4.1988) by Family Credit (General) Amendment Regulations 1988 (S.I. 1988/660), reg. 1, 9(b)
Modifications etc. (not altering text)
C1Reg. 34(3A) modified (temp. until 27.11.2001) (28.11.2000) by The Social Security (New Deal Pilot) Regulations 2000 (S.I. 2000/3134), regs. 1(1)(b), 15(2), (3)(c)