The Jobseeker's Allowance Regulations (Northern Ireland) 2016 No. 218

PART 7 N.I. EARNINGS

Rounding of fractions N.I.

53.  Where any calculation under this Part results in a fraction of a penny that fraction must, if it would be to the claimant's advantage, be treated as a penny, but otherwise it must be disregarded.

Calculation of earnings derived from employed earner's employment N.I.

54.—(1) Earnings derived from employment as an employed earner are to be taken into account over a period determined in accordance with the following paragraphs and at a weekly amount determined in accordance with regulation 57 (calculation of weekly amount of earnings).

(2) Subject to the following provisions of this regulation, the period over which a payment is to be taken into account is to be—

(a) where the payment is monthly, a period equal to the number of weeks beginning with the date on which the payment is treated as paid under regulation 56 (date on which earnings are treated as paid) and ending with the date immediately before the date on which the next monthly payment would have been so treated as paid whether or not the next monthly payment is actually paid;

(b) where the payment is in respect of a period which is not monthly, a period equal to the length of the period for which payment is made; or

(c) in any other case, a period equal to such number of weeks as is equal to the number obtained (see paragraph (13)) by applying the formula—

where—

E is the net earnings;

J is the amount of jobseeker's allowance which would be payable had the payment not been made;

D is an amount equal to the total of the sums which would fall to be disregarded from that payment under the Schedule to these Regulations (sums to be disregarded in the calculation of earnings), as is appropriate in the claimant's case,

and that period is to begin on the date on which the payment is treated as paid under regulation 56.

(3) Earnings derived by a claimant as a member of a reserve force prescribed in Part 1 of Schedule 6 to the Social Security (Contributions) Regulations 2001 in respect of a period of annual continuous training for a maximum of 15 days in any calendar year or in respect of training in the claimant's first year of training as a member of a reserve force for a maximum of 43 days in that year, whether paid to the claimant alone or together with other earnings derived from the same source, are to be taken into account—

(a) in the case of a period of training which lasts for the number of days listed in column 1 of the Table, over a period of time which is equal to the number of days set out in the corresponding row in column 2 of that Table; or

(b) in any other case, over a period which is equal to the duration of the training period.

Table

Column 1 Period of training in days	Column 2 Period of time over which earnings are to be taken into account in days
8 to 10	7
15 to 17	14
22 to 24	21
29 to 31	28
36 to 38	35
43	42

(4) The period referred to in paragraph (3) over which earnings are to be taken into account is to begin on the date on which they are treated as paid under regulation 56.

(5) Where earnings are derived from the same source but are not of the same kind and the periods in respect of which those earnings would, but for this paragraph, fall to be taken into account, overlap wholly or partly—

(a) those earnings are to be taken into account over a period equal to the aggregate length of those periods; and

(b) that period is to begin with the earliest date on which any part of those earnings would otherwise be treated as paid under regulation 56.

(6) In a case to which paragraph (5) applies, earnings falling within regulation 58 (earnings of employed earners) are to be taken into account in the following order of priority—

(a) earnings normally derived from the employment;

(b) any compensation payment;

(c) any holiday pay.

(7) Where earnings to which regulation 58(1)(b) or (c) applies are paid in respect of part of a day, those earnings are to be taken into account over a period equal to a day.

(8) Subject to paragraph (9), the period over which a compensation payment is to be taken into account is to be the period beginning on the date on which the payment is treated as paid under regulation 56 and ending—

(a) subject to sub-paragraph (b), where the person who made the payment represents that it, or part of it, was paid in lieu of notice of termination of employment or on account of the early termination of a contract of employment for a term certain, on the expiry date;

(b) in a case where the person who made the payment represents that it, or part of it, was paid in lieu of consultation under Article 216 of the Employment Rights (Northern Ireland) Order 1996 M1 , on the latest of—

(i) the date on which the consultation period under that Article would have ended;

(ii) in a case where sub-paragraph (a) also applies, the expiry date; or

(iii) the standard date; or

(c) in any other case, on the standard date.

(9) The maximum period over which a compensation payment may be taken into account under paragraph (8) is 52 weeks from the date on which the payment is treated as paid under regulation 56.

(10) In this regulation—

“compensation payment” means any payment to which regulation 58(4) applies;

“the expiry date” means in relation to the termination of a person's employment—

(a)

the date on which any period of notice (which means the period of notice of termination of employment to which a person is entitled by statute or by contract, whichever is the longer, or, if they are not entitled to such notice, the period of notice which is customary in the employment in question) applicable to the person was due to expire, or would have expired had it not been waived;

(b)

subject to paragraph (11), where the person who made the payment represents that the period in respect of which that payment is made is longer than the period of notice referred to in paragraph (a), the date on which that longer period is due to expire; or

(c)

where the person had a contract of employment for a term certain, the date on which it was due to expire;

“the standard date” means the earlier of—

(a)

the expiry date; and

(b)

the last day of the period determined by dividing the amount of the compensation payment by the maximum weekly amount which, on the date on which the payment is treated as paid under regulation 56, is specified in Article 23(1) of the Employment Rights (Northern Ireland) Order 1996 M2 , and treating the result (less any fraction of a whole number) as a number of weeks.

(11) For the purposes of paragraph (10), if it appears to the Department in a case to which paragraph (b) of the definition of “expiry date” applies that, having regard to the amount of the compensation payment and the level of remuneration normally received by the claimant when they were engaged in the employment in respect of which the compensation payment was made, it is unreasonable to take the payment into account until the date specified in that paragraph (b), the expiry date is to be the date specified in paragraph (a) of that definition.

(12) For the purposes of this regulation the claimant's earnings are to be calculated in accordance with regulations 58, 59 and 63 (earnings of employed earners, calculation of net earnings of employed earners, notional earnings).

(13) For the purposes of the number obtained as mentioned in paragraph (2)(c), any fraction is to be treated as a corresponding fraction of a week.

Marginal Citations

M1 S.I. 1996/1919 (N.I. 16); Article 216 was amended by regulation 8 of S.R. 1999 No. 432 and paragraph 16 of Schedule 2 to S.R. 2011 No. 350

M2 Article 23(1) was amended by paragraph 4(4) of Schedule 2 to the Employment (Northern Ireland) Order 2002 (S.I. 2002/2836 (N.I. 2)), paragraph 2(2) of Schedule 5 to the Employment (Northern Ireland) Order 2003 (S.I. 2003/2902 (N.I. 15)) and Article 3 of and the Schedule to S.R. 2011 No. 30

Calculation of earnings of self-employed earners N.I.

55.—(1) Except where paragraph (2) applies, where a claimant's income consists of earnings from employment as a self-employed earner the weekly amount of their earnings is to be determined by reference to their average weekly earnings from that employment—

(a) over a period of one year; or

(b) where the claimant has recently become engaged in that employment or there has been a change which is likely to affect the normal pattern of business, over such other period as may, in any particular case, enable the weekly amount of their earnings to be determined more accurately.

(2) Where the claimant's earnings consist of any items to which paragraph (3) applies, those earnings are to be taken into account over a period equal to such number of weeks as is equal to the number obtained (see paragraph (5)) by applying the formula—

where—

E is the earnings;

J is the amount of jobseeker's allowance which would be payable had the payment not been made;

D is an amount equal to the total of the sums which would fall to be disregarded from the payment under the Schedule to these Regulations (sums to be disregarded in the calculation of earnings) as is appropriate in the claimant's case.

(3) This paragraph applies to—

(a) royalties or other sums paid as a consideration for the use of, or the right to use, any copyright, design, patent or trade mark; or

(b) any payment in respect of any—

(i) book registered under the Public Lending Right Scheme 1982 M3 ; or

(ii) work made under any international public lending right scheme that is analogous to the Public Lending Right Scheme 1982,

where the claimant is the first owner of the copyright, design, patent or trade mark, or an original contributor to the book or work concerned.

(4) For the purposes of this regulation the claimant's earnings are to be calculated in accordance with regulations 60 to 62.

(5) For the purposes of the number obtained as mentioned in paragraph (2), any fraction is to be treated as a corresponding fraction of a week.

Marginal Citations

M3 The Scheme was initially set out in the Appendix to S.I. 1982/719 and is now set out in Appendix 2 to S.I. 1990/2360

Date on which earnings are treated as paid N.I.

56.  A payment of earnings to which regulation 54 (calculation of earnings derived from employed earner's employment) applies is to be treated as paid—

(a) in the case of a payment which is due to be paid before the first benefit week pursuant to the claim, on the date on which it is due to be paid; or

(b) in any other case, on the first day of the benefit week in which it is due to be paid or the first succeeding benefit week in which it is practicable to take it into account.

Calculation of weekly amount of earnings N.I.

57.—(1) For the purposes of regulation 54 (calculation of earnings derived from employed earner's employment), subject to paragraphs (2) to (5), where the period in respect of which a payment of earnings is made—

(a) does not exceed a week, the weekly amount is to be the amount of that payment;

(b) exceeds a week, the weekly amount is to be determined—

(i) in a case where that period is a month, by multiplying the amount of the payment by 12 and dividing the product by 52;

(ii) in a case where that period is 3 months, by multiplying the amount of the payment by 4 and dividing the product by 52;

(iii) in a case where that period is a year, by dividing the amount of the payment by 52;

(iv) in any other case, by multiplying the amount of the payment by 7 and dividing the product by the number equal to the number of days in the period in respect of which it is made.

(2) Where a payment for a period not exceeding a week is treated under regulation 56(a) (date on which earnings are treated as paid) as paid before the first benefit week and a part is to be taken into account for some days only in that week (“the relevant days”), the amount to be taken into account for the relevant days is to be calculated by multiplying the amount of the payment by the number of relevant days and dividing the product by the number of days in the period in respect of which it is made.

(3) Where a payment is in respect of a period equal to or in excess of a week and a part is to be taken into account for some days only in a benefit week (“the relevant days”), the amount to be taken into account for the relevant days is, except where paragraph (4) applies, to be calculated by multiplying the amount of the payment by the number of relevant days and dividing the product by the number of days in the period in respect of which it is made.

(4) Except in the case of a payment which it has not been practicable to treat under regulation 56(b) as paid on the first day of the benefit week in which it is due to be paid, where a payment of income from a particular source is or has been paid regularly and that payment falls to be taken into account in the same benefit week as a payment of the same kind and from the same source, the amount of that income to be taken into account in any one benefit week is not to exceed the weekly amount determined under paragraph (1)(a) or (b), as the case may be, of the payment which under regulation 56(b) is treated as paid first.

(5) Where the amount of the claimant's earnings fluctuates and has changed more than once, or a claimant's regular pattern of work is such that they do not work every week, paragraphs (1) to (4) may be modified so that the weekly amount of their earnings is determined by reference to their average weekly earnings—

(a) if there is a recognisable cycle of work, over the period of one complete cycle (including, where the cycle involves periods in which the claimant does no work, those periods but disregarding any other absences);

(b) in any other case, over a period of 5 weeks or such other period as may, in the particular case, enable the claimant's average weekly earnings to be determined more accurately.

Earnings of employed earners N.I.

58.—(1) Subject to paragraphs (2) and (4), “ earnings” means in the case of employment as an employed earner, any remuneration or profit derived from that employment and includes—

(a) any bonus or commission;

(b) any compensation payment;

(c) any holiday pay except any payable more than 4 weeks after the termination or interruption of employment but this exception does not apply to a person who is, or would be, prevented from being entitled to a jobseeker's allowance by Article 16 of the Order (trade disputes);

(d) any payment by way of a retainer;

(e) any payment made by the claimant's employer in respect of expenses not wholly, exclusively and necessarily incurred in the performance of the duties of the employment, including any payment made by the claimant's employer in respect of—

(i) travelling expenses incurred by the claimant between their home and place of employment;

(ii) expenses incurred by the claimant under arrangements made for the care of a member of their family owing to the claimant's absence from home;

(f) any payment or award of compensation made under Articles 146(4), 147, 151(3)(a), 163, 166 or 167 M4 of the Employment Rights (Northern Ireland) Order 1996 (the remedies: orders and compensation, the orders, enforcement of order and compensation, interim relief);

(g) any payment made or remuneration paid under Article 60, 66, 96, 100 or 102 of the Employment Rights (Northern Ireland) Order 1996 (right to guarantee payments, remuneration on suspension on medical or maternity grounds, complaints to employment tribunals) M5 ;

(h) any award of compensation made under Article 154(1), 156(3), 163 to 167, 217 or 220 of the Employment Rights (Northern Ireland) Order 1996 (compensation for unfair dismissal, interim relief, complaint and protective award, complaint by employee to industrial tribunal) M6 ;

(i) any payment made under legislation of, or under any scheme operating in, the Republic of Ireland which is analogous to any income to which sub-paragraphs (a) to (h) relate;

(j) the amount of any payment by way of a non-cash voucher which has been taken into account in the computation of a person's earnings in accordance with Part 5 of Schedule 3 to the Social Security (Contributions) Regulations 2001.

(2) “Earnings” does not include—

(a) subject to paragraph (3), any payment in kind;

(b) any periodic sum paid to a claimant on account of the termination of their employment by reason of redundancy;

(c) any remuneration paid by or on behalf of an employer to the claimant in respect of a period throughout which the claimant is on maternity leave, paternity leave, shared parental leave [F1 , parental bereavement leave] or adoption leave or is absent from work because they are ill;

(d) any payment in respect of expenses wholly, exclusively and necessarily incurred in the performance of the duties of the employment;

(e) any occupational pension;

(f) any redundancy payment within the meaning of Article 170(1) of the Employment Rights (Northern Ireland) Order 1996;

(g) any lump sum payment made under the Iron and Steel Re-adaptation Benefits Scheme M7 ;

(h) any payment in respect of expenses arising out of the claimant's participation as a service user;

(i) any bounty paid at intervals of at least one year and derived from employment to which paragraph 6 of the Schedule to these Regulations (sums to be disregarded in the calculation of earnings) applies.

(3) Paragraph (2)(a) does not apply in respect of any non-cash voucher referred to in paragraph (1)(j).

(4) In this regulation, “compensation payment” means any payment made in respect of the termination of employment other than—

(a) any remuneration or emolument (whether in money or in kind) which accrued in the period before the termination;

(b) any holiday pay;

(c) any payment specified in paragraphs (1)(f), (g) or (h) or (2);

(d) any refund of contributions to which the person was entitled under an occupational pension scheme.

Textual Amendments

F1 Words in reg. 58(2)(c) inserted (29.9.2023) by The Parental Bereavement Leave and Pay (Consequential Amendments to Subordinate Legislation) (No. 2) Regulations (Northern Ireland) 2023 (S.R. 2023/157), regs. 1(1), 25(4), 34 (with regs. 28-33)

Marginal Citations

M4 Articles 146(4) and 151(3)(a) were amended by paragraph 2 of Schedule 5 to the Employment (Northern Ireland) Order 2003 (S.I. 2003/2902 (N.I. 15)) and Article 163 was amended by regulation 32(6) of S.R.1998 No. 386, Article 13 of the Public Interest Disclosure (Northern Ireland) Order 1998 (S.I. 1998/1763 (N.I. 17)), Article 8 of the Employment Relations (Northern Ireland) Order 1999 (S.I. 1999/2790 (N.I. 9)) and paragraph 15 of Schedule 2 to the Employment Relations (Northern Ireland) Order 2004 (S.I. 2004/3078 (N.I. 19))

M5 Article 96 was amended by paragraph 2 of Schedule 10 to S.R. 2000 No. 375

M6 Article 154(1) was amended by regulation 32(6) of S.R. 1998 No. 386 and the Schedule to S.R. 2011 No. 30, Article 156(3) was amended by regulation 32(6) of S.R. 1998 No. 386, Article 164 was amended by regulation 32(6) of S.R. 1998 No. 386 and Article 8 of the Employment Relations (Northern Ireland) Order 1999 (S.I. 1999/2790 (N.I. 9)) and Article 217 was amended by regulation 10 of S.R. 1999 No. 432

M7 The Scheme is set out in regulation 4 of, and the Schedule to, the European Communities (Iron and Steel Employees Re-adaptation Benefits Scheme) (No.2) Regulations 1996 (S.I. 1996/3182)

Calculation of net earnings of employed earners N.I.

59.—(1) For the purposes of regulation 54 (calculation of earnings derived from employed earners), the earnings of a claimant derived from employment as an employed earner to be taken into account are to be, subject to paragraph (2), their net earnings.

(2) There is to be disregarded from a claimant's net earnings, any sum, where applicable, specified in the Schedule to these Regulations.

(3) For the purposes of paragraph (1) net earnings are to be calculated by taking into account the gross earnings of the claimant from that employment less—

(a) any amount deducted from those earnings by way of—

(i) income tax;

(ii) primary Class 1 contributions payable under the Benefits Act; and

(b) half of any sum paid by the claimant in respect of a pay period (the period in respect of which a claimant is, or expects to be, normally paid by their employer, being a week, a fortnight, 4 weeks, a month or other longer or shorter period as the case may be) by way of a contribution towards an occupational or personal pension scheme.

(4) 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 this regulation will be such amounts as, in the opinion of the Department, would have been deducted had the claimant been employed in Northern Ireland.

Earnings of self-employed earners N.I.

60.—(1) Subject to paragraph (2), “earnings”, in the case of employment as a self-employed earner, means the gross receipts of the employment.

(2) “Earnings” does not include—

(a) where a claimant is involved in providing board and lodging accommodation for which a charge is payable, any payment by way of such a charge;

(b) any payment made to the claimant with whom a person is accommodated by virtue of arrangements made—

(i) by an authority under Article 27(2)(a) of the Children (Northern Ireland) Order 1995 (provision of accommodation and maintenance by an authority for children whom it is looking after) M8 , or

(ii) by a voluntary organisation under Article 75(1)(a) of the Children (Northern Ireland) Order 1995 (provision of accommodation by voluntary organisations);

(c) any payment made to the claimant for a person (“the person concerned”), who is not normally a member of the claimant's household but is temporarily in the claimant's care, by—

(i) an authority but excluding payments of housing benefit made in respect of the person concerned;

(ii) a voluntary organisation, or

(iii) the person concerned pursuant to Article 36(7) of the Health and Personal Social Services (Northern Ireland) Order 1972 M9 ;

(d) any sports award.

(3) In this regulation—

“an authority” has the same meaning as in Article 2 of the Children (Northern Ireland) Order 1995.

“board and lodging accommodation” means—

(a)

accommodation provided to a person or, if they are a member of a family, to them or any other member of their family, for a charge which is inclusive of—

(i)

the provision of that accommodation; and

(ii)

at least some cooked or prepared meals which are cooked or prepared (by a person other than the person to whom the accommodation is provided or a member of their family) and consumed in that accommodation or associated premises; or

(b)

accommodation provided to a person in a hotel, guest house, lodging house or some similar establishment, except accommodation provided by a close relative of theirs or of any other member of their family, or other than on a commercial basis.

Marginal Citations

M8 S.I. 1995/755 (N.I. 2)

M9 S.I. 1972/1265 (N.I. 14); Article 36 was substituted by Article 25 of the Health and Personal Social Services (Northern Ireland) Order 1991 (S.I. 1991/194 (N.I. 1)) and amended by paragraph 2(3) to (5) of Schedule 1 to the Registered Homes (Northern Ireland) Order 1992 (S.I. 1992/3204 (N.I. 20))

Calculation of net profit of self-employed earners N.I.

61.—(1) For the purposes of regulation 55 (calculation of earnings of self-employed earners) the earnings of a claimant to be taken into account are—

(a) in the case of a self-employed earner who is engaged in employment on their own account, the net profit derived from that employment;

(b) in the case of a self-employed earner whose employment is carried on in partnership, or is that of a share fisherman within the meaning of regulation 67, the claimant's share of the net profit derived from that employment less—

(i) an amount in respect of income tax and of national insurance contributions payable under the Benefits Act calculated in accordance with regulation 62 (deductions of tax and contributions for self-employed earners); and

(ii) half of any premium paid in the period that is relevant under regulation 55 in respect of a personal pension scheme.

(2) There is to be disregarded from a claimant's net profit any sum, where applicable, specified in paragraphs 1 to 11 of the Schedule to these Regulations (sums to be disregarded in the calculation of earnings).

(3) For the purposes of paragraph (1)(a) the net profit of the employment is, except where paragraph (9) applies, to be calculated by taking into account the earnings of the employment over the period determined under regulation 55 (calculation of earnings of self-employed earners) less—

(a) subject to paragraphs (5) to (7), any expenses wholly and exclusively incurred in that period for the purposes of that employment;

(b) an amount in respect of—

(i) income tax; and

(ii) national insurance contributions payable under the Benefits Act, calculated in accordance with regulation 62; and

(c) half of any premium paid in the period determined under regulation 55 in respect of a personal pension scheme.

(4) For the purposes of paragraph (1)(b), the net profit of the employment is to be calculated by taking into account the earnings of the employment over the period determined under regulation 55 less, subject to paragraphs (5) to (7), any expenses wholly and exclusively incurred in that period for the purposes of that employment.

(5) Subject to paragraph (6), no deduction is to be made under paragraph (3)(a) or (4) in respect of—

(a) any capital expenditure;

(b) the depreciation of any capital asset;

(c) any sum employed or intended to be employed in the setting up or expansion of the employment;

(d) any loss incurred before the beginning of the period determined under regulation 55;

(e) the repayment of capital on any loan taken out for the purposes of the employment;

(f) any expenses incurred in providing business entertainment.

(6) A deduction is to be made under paragraph (3)(a) or (4) in respect of the repayment of capital on any loan used for —

(a) the replacement in the course of business of equipment or machinery; and

(b) the repair of an existing business asset except to the extent that any sum is payable under an insurance policy for its repair.

(c) the purchase of land under the Northern Ireland Land Act 1925 M10 .

(7) The Department must not make a deduction under paragraph (3)(a) or (4) in respect of any expenses where the Department is not satisfied that the expense has been incurred or, having regard to the nature of the expense and its amount, that it has been reasonably incurred.

(8) A deduction under paragraph (3)(a) or (4)—

(a) must not be made in respect of any sum unless it has been incurred for the purposes of the business;

(b) must be made in respect of—

(i) the excess of any Value Added Tax paid over Value Added Tax received in the period determined under regulation 55;

(ii) any income expended in the repair of an existing asset except to the extent that any sum is payable under an insurance policy for its repair;

(iii) any payment of interest on a loan taken out for the purposes of the employment.

(9) Where a claimant is engaged in employment as a child-minder the net profit of the employment is to be one-third of the earnings of that employment, less—

(a) an amount in respect of—

(i) income tax; and

(ii) national insurance contributions payable under the Benefits Act, calculated in accordance with regulation 62; and

(b) half of any premium paid in the period determined under regulation 55 in respect of a personal pension scheme.

(10) Notwithstanding regulation 55 and paragraphs (1) to (9), the Department may assess any item of a claimant's income or expenditure over a period other than that determined under regulation 55 provided that the other period may, in the particular case, enable the weekly amount of that item of income or expenditure to be determined more accurately.

(11) Where a claimant is engaged in employment as a self-employed earner and they are engaged in one or more other employments as a self-employed or employed earner, any loss incurred in any one of their employments is not to be offset against their earnings in any other of their employments.

(12) Where the claimant is a self-employed earner in the Republic of Ireland the amounts to be deducted for income tax and social security contributions under this regulation will be such amounts as, in the opinion of the Department, would have been deducted had the claimant been employed in Northern Ireland.

Marginal Citations

M10 1925 c. 34

Deduction of tax and contributions for self-employed earners N.I.

62.—(1) Subject to paragraph (2), the amount to be deducted in respect of income tax under regulation 61(1)(b)(i), (3)(b)(i) or (9)(a)(i) (calculation of net profit of self-employed earners) is to be calculated—

(a) on the basis of the amount of chargeable income; and

[F2 (b) as if that income were assessable to income tax at the basic rate, or in the case of a Scottish taxpayer, the Scottish basic rate, of tax less only the personal 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 their circumstances.]

(2) If the period determined under regulation 55 is less than a year, the earnings to which the basic rate [F3 , or the Scottish basic rate,] of tax is to be applied and the amount of the [F4 personal reliefs deductible under paragraph (1) are] to be calculated on a pro rata basis.

(3) Subject to paragraph (4), the amount to be deducted in respect of national insurance contributions under regulation 61(1)(b)(i), (3)(b)(ii) or (9)(a)(ii) is to be the total of—

F5 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) the amount of Class 4 contributions (if any) which would be payable under section 15 of that Act (Class 4 contributions recoverable under the Income Tax Acts) M11 at the percentage rate applicable at the date of claim on so much of the chargeable income as exceeds the lower limit but does not exceed the upper limit of profits and gains applicable for the tax year in which the date of claim falls.

(4) If the period determined under regulation 55 is less than a year—

F6 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) the limits referred to in paragraph (3)(b) are to be reduced pro rata.

(5) In this regulation “chargeable income” means—

(a) except where sub-paragraph (b) applies, the earnings derived from the employment less any expenses deducted under regulation 61(3)(a) or, as the case may be, (4);

(b) in the case of employment as a child minder, one-third of the earnings of that employment.

Textual Amendments

F2 Reg. 62(1)(b) substituted (coming into operation in accordance with reg. 1(7) of the amending Regulations) by The Social Security (Miscellaneous Amendments) Regulations (Northern Ireland) 2017 (S.R. 2017/116), regs. 1(7), 10(11)(a)

F3 Words in reg. 62(2) inserted (coming into operation in accordance with reg. 1(7) of the amending Regulations) by The Social Security (Miscellaneous Amendments) Regulations (Northern Ireland) 2017 (S.R. 2017/116), regs. 1(7), 10(11)(b)(i)

F4 Words in reg. 62(2) substituted (coming into operation in accordance with reg. 1(7) of the amending Regulations) by The Social Security (Miscellaneous Amendments) Regulations (Northern Ireland) 2017 (S.R. 2017/116), regs. 1(7), 10(11)(b)(ii)

F5 Reg. 62(3)(a) omitted (6.4.2024) by virtue of The Social Security (Class 2 National Insurance Contributions) (Consequential Amendments and Savings) Regulations 2024 (S.I. 2024/377), regs. 1(1), 8(24)(a)(i) (with reg. 1(4))

F6 Reg. 62(4)(a) omitted (6.4.2024) by virtue of The Social Security (Class 2 National Insurance Contributions) (Consequential Amendments and Savings) Regulations 2024 (S.I. 2024/377), regs. 1(1), 8(24)(a)(ii) (with reg. 1(4))

Marginal Citations

M11 Section 15 was amended by section 13 of the Limited Liability Partnerships Act 2000 (c. 12), section 3(2) of and Schedule 2 to the National Insurance Contributions Act 2002 (c. 19), paragraph 424 of Schedule 1 to the Income Tax (Trading and Other Income) Act 2005 (c. 5), Article 4 of S.I. 2011/938 and Article 4 of S.I. 2012/807

Notional earnings N.I.

63.—(1) Subject to paragraph (2), any earnings which are due to be paid to the claimant but have not been paid to the claimant, are to be treated as possessed by the claimant.

(2) Paragraph (1) does not apply to any earnings which are due to an employed earner on the termination of their employment by reason of redundancy but which have not been paid to them.

(3) Where a claimant's earnings are not ascertainable at the time of the determination of the claim or of any revision or supersession, the Department must 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.

(4) Subject to paragraph (5), 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,

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

(5) Paragraph (4) does not apply—

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

(b) to a claimant who is participating in a work placement approved by the Department (or a person providing services to the Department) before the placement starts.

(6) Where a claimant is treated as possessing any earnings under paragraphs (1) or (2), regulations 54 to 62 apply for the purposes of calculating the amount of those earnings as if a payment had actually been made and as if it were actual earnings which the claimant does possess.

(7) Where a claimant is treated as possessing any earnings under paragraphs (3) or (4), regulations 54 to 62 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—

(a) regulation 59(3) (calculation of net earnings of employed earners) does not apply; and

(b) the claimant's net earnings are to be calculated by taking into account the earnings which the claimant is treated as possessing less the amounts referred to in paragraph (8).

(8) The amounts mentioned in paragraph (7)(b) are—

(a) where the period over which the earnings which the claimant is treated as possessing are to be taken into account is—

(i) a year or more, an amount in respect of income tax equivalent to an amount calculated in accordance with paragraph (11);

(ii) less than a year, the earnings to which the [F7 basic rate, or in the case of a Scottish taxpayer, the Scottish basic rate,] of tax is to be applied and the amount of the [F8 personal reliefs] deductible under this paragraph are to be calculated on a pro rata basis;

(b) where the weekly amount of the earnings which the claimant is treated as possessing is not less than 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 M12 ; and

(c) 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.

(9) Paragraphs (1), (3) and (4) do not apply in respect of any amount of earnings derived from employment as an employed earner, arising out of the claimant's participation as a service user.

(10) In this regulation, “work placement” means practical work experience which is not undertaken in expectation of payment.

[F9 (11) For the purposes of paragraph (8)(a)(i), the amount is calculated by applying to those earnings the basic rate, or in the case of a Scottish taxpayer, the Scottish basic rate, of tax in the year of assessment less only the personal 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 the claimant’s circumstances.]

(12) 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 this regulation will be such amounts as, in the opinion of the Department, would have been deducted had the claimant been employed in Northern Ireland.

Textual Amendments

F7 Words in reg. 63(8)(a)(ii) substituted (coming into operation in accordance with reg. 1(7) of the amending Regulations) by The Social Security (Miscellaneous Amendments) Regulations (Northern Ireland) 2017 (S.R. 2017/116), regs. 1(7), 10(12)(a)(i)

F8 Words in reg. 63(8)(a)(ii) substituted (coming into operation in accordance with reg. 1(7) of the amending Regulations) by The Social Security (Miscellaneous Amendments) Regulations (Northern Ireland) 2017 (S.R. 2017/116), regs. 1(7), 10(12)(a)(ii)

F9 Reg. 63(11) substituted (coming into operation in accordance with reg. 1(7) of the amending Regulations) by The Social Security (Miscellaneous Amendments) Regulations (Northern Ireland) 2017 (S.R. 2017/116), regs. 1(7), 10(12)(b)

Marginal Citations

M12 Section 8 was substituted by section 1(2) of the National Insurance Contributions Act 2002 (c. 19)