PART VIII INCOME AND CAPITAL

Chapter III Employed Earners

Earnings of employed earners

98.—(1) Subject 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 compensation payment;

(c)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 person who is, or would be, prevented from being entitled to a jobseeker’s allowance by section 14 (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 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;

[F1(f)any payment or award of compensation made under section [F2112(4), 113, 117(3)(a), 128, 131 and 132 of the Employment Rights Act 1996 (the remedies: orders and compensation, the orders, enforcement of order and compensation, interim relief)];

(ff)any payment or remuneration made under section [F328, 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)];]

(g)any award of compensation made under section 156, F4...161 to 166, 189 or 192 of the Trade Union and Labour Relations (Consolidation) Act 1992 F5 (compensation for unfair dismissal or redundancy on grounds of involvement in trade union activities, and protective awards).

[F6(h)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 [F7Part 5 of Schedule 3 to the Social Security (Contributions) Regulations 2001].]

(2) “Earnings" shall not include–

(a)[F8subject to paragraph (2A),] any payment in kind;

(b)any periodic sum paid to a claimant on account of the termination of his 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[F9, paternity leave, adoption leave] or is absent from work because he is 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 [F10section 135(1) of the Employment Rights Act 1996].

[F11(g)any lump sum payment made under the Iron and Steel Re-adaptation Benefits Scheme]

[F12(2A) Paragraph (2)(a) shall not apply in respect of any non-cash voucher referred to in paragraph (1)(h).]

(3) 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)[F13, (ff),] or (g) or (2);

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

Textual Amendments

F6Reg. 98(1)(h) 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(6)(a)

F8Words in reg. 98(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(6)(b)

F12Reg. 98(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(6)(c)

Calculation of net earnings of employed earners

99.—(1) For the purposes of regulation 94 (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) Subject to paragraph (3), there shall be disregarded from a claimant’s net earnings, any sum, where applicable, specified in paragraphs 1 to 16 and 19 of Schedule 6.

(3) For the purposes of calculating the amount to be deducted in respect of earnings under regulation 80 (contribution-based jobseeker’s allowance: deductions in respect of earnings) the disregards specified in paragraphs 5 to 8 and 11 of Schedule 6 shall not apply.

(4) 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 payable under the Benefits Act; and

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