109.—(1) Where a claimant is treated as possessing any income under regulation 106 or 107 the foregoing provisions of this Part are to 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 the claimant does possess.
(2) Where a claimant is treated as possessing any earnings under regulation 108(1) or (2) the foregoing provisions of this Part are to 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 the claimant does possess except that regulation 96(3) (calculation of net earnings of employed earners) does not apply and the claimant’s net earnings are to be calculated by taking into account the earnings which the claimant is treated as possessing, less—
(a)where the period over which those earnings are to be taken into account is a year or more, an amount in respect of income tax equivalent to an amount calculated by applying to those earnings F1... the basic rate of tax in the year of assessment less only the personal allowance to which the claimant is entitled under section 257(1) of the Taxes Act(1) (personal allowance) as is appropriate to the claimant’s circumstances;
(b)where if the period over which those earnings are to be taken into account is less than a year, the earnings to which the [F2basic rate] of tax is to be applied and the amount of the personal allowance deductible under this paragraph is to be calculated on a pro rata basis;
(c)where the weekly amount of those earnings equals or exceeds the lower earnings limit, an amount representing primary Class 1 contributions under section 6(1)(a) of the Contributions and 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(2); and
(d)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.
(3) Where the claimant is an employed earner in the Republic of Ireland the amounts to be deducted for income tax and primary Class 1 contributions under paragraph (2) are to be such amounts as, in the opinion of the Department, would have been deducted had the claimant been employed in Northern Ireland.
Textual Amendments
F1Words in reg. 109(2)(a) omitted (27.10.2008) by virtue of The Employment and Support Allowance (Miscellaneous Amendments) Regulations (Northern Ireland) 2008 (S.R. 2008/413), regs. 1(1), 3(14)(a)
F2Words in reg. 109(2)(b) substituted (27.10.2008) by The Employment and Support Allowance (Miscellaneous Amendments) Regulations (Northern Ireland) 2008 (S.R. 2008/413), regs. 1(1), 3(14)(b)
Commencement Information
Section 257 was substituted by section 33 of the Finance Act 1988 (c. 39) and amended by paragraph 29 of Schedule 1 to the Income Tax Act 2007 (c. 3) and Article 2(2) of S.I. 2006/3241
Section 8 was substituted by section 1(2) of the National Insurance Contributions Act 2002