C4PART VINCOME AND CAPITAL
C4C3CHAPTER VIcapital
Pt. V Ch. VI applied (with modifications) (S.) (6.10.2003) by The National Health Service (Travelling Expenses and Remission of Charges) (Scotland) (No. 2) Regulations 2003 (S.S.I. 2003/460), reg. 1, sch. Pt. I Table A (with reg. 13)
I9F74Capital limitC7C10C12C14C1645
For the purposes of section 134(1) of the Contributions and Benefits Act as it applies to income support (no entitlement to benefit if capital exceeds prescribed amount), the prescribed amount is £16,000.
Calculation of capitalI146
1
For the purposes of Part II of the Act as it applies to income support, the capital of a claimant to be taken into account shall, subject to paragraph (2), be the whole of his capital calculated in accordance with this Part and any income treated as capital under F11regulation 48 (income treated as capital).
2
There shall be disregarded from the calculation of a claimant's capital under paragraph (1) any capital, where applicable, specified in Schedule 10.
Disregard of capital of child or young personI247
F48The capital of a child or young person who is a member of the claimant's family shall not be treated as capital of the claimant.
Income treated as capitalI348
1
2
Except in the case of an amount to which section 23(5) (a) (ii) of the Act (refund of tax in trade disputes cases) F6or regulation 41(4) (capital treated as income) applies, any amount by way of a refund of income tax deducted from profits or emoluments chargeable to income tax under Schedule D or E shall be treated as capital.
3
Any holiday pay which is not earnings under regulation 35(1) (d) (earnings of employed earners) shall be treated as capital.
4
5
Subject to paragraph (6), in the case of employment as an employed earner, any advance of earnings or any loan made by the claimant's employer shall be treated as capital.
F36
Paragraph (5) shall not apply to a person to whom section 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) (effect of return to work).
7
F358
F49Any payment made by a local authority, which represents arrears of payments under—
a
paragraph 15 of Schedule 1 to the Children Act 1989 (power of a local authority to make contributions to a person with whom a child lives as a result of a residence order); or
b
section 34(6) or as the case may be, section 50 of the Children Act 1975 (payments towards maintenance for children),
shall be treated as capital.
8A
F50Any payment made by an authority, as defined in Article 2 of the Children Order which represents arrears of payments under Article 15 of, and paragraph 17 of Schedule 1 to, that Order (contribution by an authority to child’s maintenance), shall be treated as capital.
F139
Any charitable or voluntary payment which is not made or not due to be made at regular intervals, other than one to which paragraph (10) applies, shall be treated as capital.
F1310
This paragraph applies to a payment—
a
which is made to a person to whom section 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) F52or to a member of the familyF52or to the partner of such a person;
F109ab
which is a Grenfell Tower payment;
F114ac
which is a child abuse payment;
ad
which is a Windrush payment; or
b
F51to which regulation 44(2) (modification in respect of children and young persons) applies; or
c
which is made under F93or by the Macfarlane Trust F15, the Macfarlane (Special Payments) TrustF18, the Macfarlane (Special Payments) (No. 2) TrustF21, the FundF25, the Eileen TrustF92, MFET Limited F98, the Skipton Fund, the Caxton FoundationF102, the Scottish Infected Blood Support SchemeF106, an approved blood schemeF104, the London Emergencies Trust, the We Love Manchester Emergency FundF108, the National Emergencies Trust or F24the Independent Living F88Fund (2006).
F8611
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F4112
Any arrears of subsistence allowance which are paid to a claimant as a lump sum shall be treated as capital.
F85Calculation of capital in the United KingdomI449
Capital which a claimant possesses in the United Kingdom shall be calculated at its current market or surrender value less—
a
where there would be expenses attributable to sale, 10 per cent; and
b
the amount of any incumbrance secured on it.
Calculation of capital outside the United KingdomI550
Capital which a claimant possesses in a country outside the United Kingdom shall be calculated—
a
in a case in which there is no prohibition in that country against the transfer to the United Kingdom of an amount equal to its current market or surrender value in that country, at that value;
b
in a case where there is such a prohibition, at the price which it would realise if sold in the United Kingdom to a willing buyer,
less, where there would be expenses attributable to sale, 10 per cent and the amount of any incumbrance secured on it.
Notional capitalI651
1
A claimant shall be treated as possessing capital of which he has deprived himself for the purpose of securing entitlement to income support or increasing the amount of that benefit F17except–
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 51A (diminishing notional capital rule)F33or
F82c
any sum to which paragraph 44(2)(a) of Schedule 10 (capital to be disregarded) applies which is administered in the way referred to in paragraph 44(1)(a);
d
any sum to which paragraph 45(a) of Schedule 10 refers.
C12
Except in the case of—
a
a discretionary trust;
b
a trust derived from a payment made in consequence of a personal injury; or
C20c
any loan which would be obtainable only if secured against capital disregarded under Schedule 10, F26or
F71da
F83e
any sum to which paragraph 44(2)(a) of Schedule 10 (capital to be disregarded) applies which is administered in a way referred to in paragraph 44(1)(a); or
f
any sum to which paragraph 45(a) of Schedule 10 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 but only from the date on which F4it could be expected to be acquired were an application made
F93
F36Any payment of capital, other than a payment of capital specified in F112paragraph (3A) or (3B), made—
a
to a third party in respect of a single claimant or F54in respect of a member of the familyF54his partner (but not a member of the third party’s family) shall be treated—
i
in a case where that payment is derived from a payment of any benefit under the benefit Acts, F60a payment from the Armed Forces and Reserve Forces Compensation Scheme, a war disablement pensionF30, war widow’s pension F44or war widower’s pension or a pension payable to a person as a F67widow, widower or surviving civil partner under F91... 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 who have died in consequence of service as members of the armed forces of the Crown, as possessed by that single claimant, if it is paid to him, F53or by that member if it is paid to any member of the familyF53or by his partner, if it is paid to his partner;
F40ia
in a case where that payment is a payment of an occupational pension F70, 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 F55that memberF55the claimant’s partner;
C2ii
in any other case, as possessed by that single claimant F56or by that memberF56or his partner to the extent that it is used for the food, ordinary clothing or footwear, household fuel, rent F61... for which housing benefit F45is payable orF19... any housing costs to the extent that they are met under regulation 17(1)(e) and 18(1)(f) (housing costs) F46..., of that single claimant or, as the case may be, F56of any member of that familyF56of his partnerF20, or is used for any F22council tax or water charges for which that claimant or F56member is liableF56partner is liable;
b
F57to 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.
F57to 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.
F373A
Paragraph (3) shall not apply in respect of a payment of capital made—
a
under F95or by the Macfarlane Trust, the Macfarlane (Special Payments) Trust, the Macfarlane (Special Payments) (No.2) Trust, the Fund, the Eileen Trust F94, MFET LimitedF59, the Independent Living F89Fund (2006)F68, the Skipton Fund F99, the Caxton FoundationF103, the Scottish Infected Blood Support SchemeF107, an approved blood schemeF105, the London Emergencies Trust, the We Love Manchester Emergency FundF111, the National Emergencies Trust or the London Bombings Relief Charitable Fund;
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) of the Jobseeker’s Allowance Regulations 1996;
ii
in a training scheme specified in regulation 75(1)(b)(ii) of those Regulations; or
F42iia
in the Intensive Activity Period specified in regulation 75(1)(a)(iv) of those RegulationsF87...; or
iii
in a qualifying course within the meaning specified in regulation 17A(7) of those Regulations.
F97ba
in respect of a person’s participation in F100a scheme prescribed in regulation 3 of the Jobseeker's Allowance (Schemes for Assisting Persons to Obtain Employment) Regulations 2013 or the Mandatory Work Activity Scheme;
F39c
under an occupational pension scheme F73, 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;
ii
the payment is made to the trustee in bankruptcy or any other person acting on behalf of the creditors; and
F1103B
Paragraph (3) shall not apply in respect of F113any of the following payments of capital—
a
a Grenfell Tower payment;
b
a child abuse payment;
c
a Windrush payment.
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 46 (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.
F57
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.
F108
In paragraph (3) 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.
F16Diminishing notional capital rule51A
1
Where a claimant is treated as possessing capital under regulation 51(1) (notional capital), the amount which he is treated as possessing–
a
in the case of a week that is subsequent to–
i
the relevant week in respect of which the conditions set out in paragraph (2) are satisfied, or
ii
a week which follows that relevant week and which satisfies those conditions,
shall be reduced by an amount determined under paragraph (2);
b
in the case of a week in respect of which paragraph (1)(a) does not apply but where–
i
that week is a week subsequent to the relevant week, and
ii
that relevant week is a week in which the condition in paragraph (3) is satisfied,
shall be reduced by the amount determined under paragraph (3).
2
This paragraph applies to a benefit week or part week where the claimant satisfies the conditions that–
a
he is in receipt of income support; and
b
but for regulation 51(1), he would have received an additional amount of income support in that benefit week or, as the case may be, that part week;
and in such a case, the amount of the reduction for the purposes of paragraph (1)(a) shall be equal to that additional amount.
3
Subject to paragraph (4), for the purposes of paragraph (1)(b) the condition is that the claimant would have been entitled to income support in the relevant week, but for regulation 51(1), and in such a case the amount of the reduction shall be equal to the aggregate of–
a
the amount of income support to which the claimant would have been entitled in the relevant week but for regulation 51(1); and for the purposes of this sub-paragraph if the relevant week is a part-week that amount shall be determined by dividing the amount of income support to which he would have been so entitled by the number equal to the number of days in the part-week and multiplying the quotient by 7;
b
the amount of housing benefit (if any) equal to the difference between his maximum housing benefit and the amount (if any) of housing benefit which he is awarded in respect of the benefit week, within the meaning of regulation 2(1) of F69the Housing Benefit Regulations 2006 (interpretation), which includes the last day of the relevant week;
F90c
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F23d
the amount of council tax benefit (if any) equal to the difference between his maximum council tax benefit and the amount (if any) of council tax benefit which he is awarded in respect of the benefit week which includes the last day of the relevant week, and for this purpose “benefit week” F101means a period of 7 consecutive days beginning on a Monday and ending on a Sunday.
4
The amount determined under paragraph (3) shall be re-determined under that paragraph if the claimant makes a further claim for income support and the conditions in paragraph (5) are satisfied, and in such a case–
a
sub-paragraphs F43(a) to (d) of paragraph (3) shall apply as if for the words “relevant week” there were substituted the words “relevant subsequent week”; and
b
subject to paragraph (6), the amount as re-determined shall have effect from the first week following the relevant subsequent week in question.
5
The conditions are that–
a
a further claim is made 26 or more weeks after–
i
the date on which the claimant made a claim for income support in respect of which he was first treated as possessing the capital in question under regulation 51(1); or
ii
in a case where there has been at least one re-determination in accordance with paragraph (4), the date on which he last made a claim for income support which resulted in the weekly amount being re-determined; or
iii
the date on which he last ceased to be in receipt of income support; whichever last occurred; and
b
the claimant would have been entitled to income support but for regulation 51(1).
6
The amount as re-determined pursuant to paragraph (4) shall not have effect if it is less than the amount which applied in that case immediately before the re-determination and in such a case the higher amount shall continue to have effect.
7
For the purpose of this regulation–
a
“part-week” means a period to which sub-section (1A) of section 21 of the Act (amount etc. of income support) applies;
b
“relevant week” means the benefit week or part-week in which the capital in question of which the claimant has deprived himself within the meaning of regulation 51(1)–
i
was first taken into account for the purpose of determining his entitlement to income support; or
ii
was taken into account on a subsequent occasion for the purpose of determining or re-determining his entitlement to income support on that subsequent occasion and that determination or re-determination resulted in his beginning to receive, or ceasing to receive, income support;
and where more than one benefit week or part-week is identified by reference to heads (i) and (ii) of this sub-paragraph the later or latest such benefit week or, as the case may be, the later or latest such part-week;
c
“relevant subsequent week” means the benefit week or part-week which includes the day on which the further claim or, if more than one further claim has been made, the last such claim was made.
Capital jointly heldI752
Except where a claimant possesses capital which is disregarded under regulation 51 (4) (notional capital), where a claimant and one or more persons are beneficially entitled in possession to any capital asset they shall be treated as if each of them were entitled in possession F38to the whole beneficial interest therein in an equal share and the foregoing provisions of this Chapter shall apply for the purposes of calculating the amount of capital which the claimant is treated as possessing as if it were actual capital which the claimant does possess.
Calculation of tariff income from capitalI8C5C6C8C9C11C13C15C18C17C1953
1
F28Except where the circumstances prescribed in paragraph F76... (1B) apply to the claimant, where the claimant's capital calculated in accordance with this Part exceeds F77£6,000 it shall be treated as equivalent to a weekly income of £1 for each complete £250 in excess of F77£6,000 but not exceeding F78£16,000.
F751ZA
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F271A
Where the circumstances prescribed in paragraph (1B) apply to the claimant and that claimant’s capital calculated in accordance with this Part exceeds £10,000, it shall be treated as equivalent to a weekly income of £1 for each complete £250 in excess of £10,000 but not exceeding £16,000.
1B
For the purposes of paragraph (1A)F79..., the prescribed circumstances are that the claimant lives permanently in—
F62a
a care home or an independent hospital;
F62b
an Abbeyfield Home;
c
accommodation provided under section 3 of, and Part II of the Schedule to, the Polish Resettlement Act 1947 (provision of accommodation in camps) where the claimant requires personal care F34by reason of old age, disablement, past or present dependence on alcohol or drugs, past or present mental disorder or a terminal illness and the care is provided in the home.
F63d
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1C
For the purposes of paragraph (1B), a claimant shall be treated as living permanently in such home F64, hospital or accommodation where he is absent—
a
from a homeF64, hospital or accommodation referred to in sub-paragraph F31(a) F65or (b) of paragraph (1B)—
i
F47... in the case of a person over pensionable age, for a period not exceeding 52 weeks, and
ii
in any other case, for a period not exceeding 13 weeks;
b
from accommodation referred to in sub-paragraph (c) of paragraph (1B), where the claimant, with the agreement of the manager of the accommodation, intends to return to the accommodation in due course.
2
3
F664
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pt. V applied (with modifications) (S.) (6.10.2003) by The National Health Service (Travelling Expenses and Remission of Charges) (Scotland) (No. 2) Regulations 2003 (S.S.I. 2003/460), reg. 1, sch. Pt. I Table A (with reg. 13)