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PART VE+W+SINCOME AND CAPITAL

Modifications etc. (not altering text)

CHAPTER IIIE+W+Semployed earners

Earnings of employed earnersE+W+S

35.—(1) [F1Subject to paragraphs (2) and (3),] “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 payment in lieu of remuneration except any periodic sum paid to a claimant on account of the termination of his employment by reason of redundancy;

(c)any payment in lieu of notice F2...;

(d)any holiday pay except any payable more than four weeks after the termination or interruption of employment but this exception shall not apply to a claimant to whom [F3section 23 of the Act (trade disputes) applies or in respect of whom section 20(3) of the Act (conditions of entitlement to income support) has effect as modified by section 23A(b) of the Act (effect of return to work).]

(e)any payment by way of a retainer;

(f)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 his home and place of employment;

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

(g)any award of compensation made under section [F4112(4) or 117(3)(a) of the Employment Rights Act 1996 (the remedies: orders and compensation, enforcement of order and compensation)];

[F5(gg)any payment or remuneration made under section 28, 34, 64, 68 or 70 of the Employment Rights Act 1996 (right to guarantee payments, remuneration on suspension on medical or maternity grounds, complaints to employment tribunals);]

(h)any such sum as is referred to in section [F6112(3) of the Contributions and Benefits Act] (certain sums to be earnings for social security purposes).

[F7(i)where—

F8(i). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(ii)a payment of compensation is made in respect of employment which is part-time employment, the amount of the compensation.]

[F9(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 [F10Part 5 of Schedule 3 to the Social Security (Contributions) Regulations 2001].]

F11(1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) “Earnings” shall not include—

(a)[F12subject to paragraph (2A),] any payment in kind;

(b)any remuneration paid by or on behalf of an employer to the claimant [F13in respect of a period throughout which the claimant is on maternity leave [F14, paternity leave [F15, adoption leave [F16, shared parental leave or parental bereavement leave]]] or is absent from work because he is ill];

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

(d)any occupational pension.

[F17(e)any lump sum payment made under the Iron and Steel Re-adaptation Benefits Scheme]

[F18(f)any payment in respect of expenses arising out of the [F19claimant participating as a service user].]

[F20(2A) Paragraph (2)(a) shall not apply in respect of any non-cash voucher referred to in paragraph (1)(j).]

[F21(3) In this regulation—

(a)“compensation” means any payment made in respect of or on the termination of employment in a case where a person has not received or received only part of a payment in lieu of notice due or which would have been due to him had he not waived his right to receive it, other than—

(i)any payment specified in paragraph (1)(a) to (h);

(ii)any payment specified in paragraph (2)(a) to [F22(e)];

(iii)any redundancy payment within the meaning of section [F23135(1) of the Employment Rights Act 1996], and

(iv)any refund of contributions to which that person was entitled under an occupational pension scheme within the meaning of section 66(1) of the Social Security Pensions Act 1975;

[F24(v) any compensation payable by virtue of section 173 or section 178(3) or (4) of the Education Reform Act 1988.]

F25(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)“part-time employment” means employment in which a person is not to be treated as engaged in remunerative work under regulation 5 or [F266(1)] [F27and (4)] (persons treated, or not treated, as engaged in remunerative work).]

Textual Amendments

F9Reg. 35(1)(j) added (with effect in accordance with reg. 1(2) of the amending S.I.) by The Social Security Amendment (Non-Cash Vouchers) Regulations 1999 (S.I. 1999/1509), regs. 1(1), 2(5)(a)

F12Words in reg. 35(2)(a) inserted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Social Security Amendment (Non-Cash Vouchers) Regulations 1999 (S.I. 1999/1509), regs. 1(1), 2(5)(b)

F13Words in reg. 35(2)(b) substituted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Income-related Benefits Schemes (Miscellaneous Amendments) (No. 4) Regulations 1993 (S.I. 1993/2119), regs. 1(1)(a), 12

F18Reg. 35(2)(f) added (for specified purposes and with effect in accordance with reg. 1(2) of the amending S.I.) by The Social Security (Miscellaneous Amendments) (No. 4) Regulations 2009 (S.I. 2009/2655), regs. 1(2)(a), 2(7)

F20Reg. 35(2A) added (with effect in accordance with reg. 1(2) of the amending S.I.) by The Social Security Amendment (Non-Cash Vouchers) Regulations 1999 (S.I. 1999/1509), regs. 1(1), 2(5)(c)

Modifications etc. (not altering text)

Commencement Information

I1Reg. 35 in force at 11.4.1988, see reg. 1

Calculation of net earnings of employed earnersE+W+S

36.—(1) For the purposes of regulation 29 (calculation of earnings of employed earners) the earnings of a claimant derived from employment as an employed earner to be taken into account shall, subject to paragraph (2), be his net earnings.

(2) There shall be disregarded from a claimant's net earnings, any sum, where applicable, specified in paragraphs 1 to 13 [F28or 15A] of Schedule 8.

(3) For the purposes of paragraph (1) net earnings shall 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 under the Social Security ActF29; and

(b)one-half of any sum paid by the claimant [F30in respect of a pay period] by way of a contribution towards an occupational or personal pension scheme.

Textual Amendments

F30Words in reg. 36(3)(b) inserted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Income-related Benefits Schemes (Miscellaneous Amendments) (No.5) Regulations 1994 (S.I. 1994/2139), regs. 1(1)(a), 26

Commencement Information

I2Reg. 36 in force at 11.4.1988, see reg. 1