The Jobseeker’s Allowance Regulations 1996

Notional income

105.—(1) A claimant shall be treated as possessing income of which he has deprived himself for the purpose of securing entitlement to a jobseeker’s allowance or increasing the amount of that allowance, or for the purpose of securing entitlement to, or increasing the amount of, income support.

(2) Except in the case of–

(a) a discretionary trust;

(b) a trust derived from a payment made in consequence of a personal injury;

[F1 (c) child benefit to which paragraph (2A) refers;]

(d) family credit or disability working allowance;

(e) a jobseeker’s allowance;

(f) payments under the earnings top-up scheme operated by the Secretary of State for Social Security;

(g) a personal pension scheme where the claimant is aged under 60,[F2 or

(h) any sum to which paragraph 42(a) or 43(a) of Schedule 8 (disregard of compensation for personal injuries which is administered by the Court) refers]

income 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 it could be expected to be acquired were an application made.

[F3 (2A) This paragraph refers to child benefit payable in accordance with regulation 2(1)(a)(ii) of the Child Benefit and Social Security (Fixing and Adjustment of Rates) Regulations 1976 (weekly rate for only, elder or eldest child of a lone parent) but only to the extent that it exceeds the amount specified in regulation 2(1)(a)(i) of those Regulations.]

(3) Where a person, aged not less than 60, is a member of, or a person deriving entitlement to a pension under, a personal pension scheme, and—

(a) in the case of a personal pension scheme other than one referred to in sub-paragraph (b), he fails to purchase an annuity with the funds available in that scheme where—

(i) he defers, in whole or in part, the payment of any income which would have been payable to him by his pension fund holder;

(ii) he fails to take any necessary action to secure that the whole or part of any income which would be payable to him by his pension fund holder upon his applying for it, is so paid; or

(iii) income withdrawal is not available to him under that scheme; or

(b) in the case of a contract or trust scheme approved under Chapter III of Part XIV of the Income and Corporation Taxes Act 1988 F4 , he fails to purchase an annuity with the funds available under that contract or scheme,

the amount of any income foregone shall be treated as possessed by him, but only from the date on which it could be expected to be acquired were an application for it to be made.

(4) The amount of any income foregone in a case to which either head (i) or (ii) of paragraph (3)(a) applies shall be the maximum amount of income which may be withdrawn from the fund and shall be determined by the adjudication officer who shall take account of information provided by the pension fund holder in accordance with regulation 7(5) of the Social Security (Claims and Payments) Regulations 1987 F5 .

(5) The amount of any income foregone in a case to which either head (iii) of paragraph (3)(a), or paragraph (3)(b) applies shall be the income that the claimant could have received without purchasing an annuity had the fund held under the relevant personal pension scheme been held under a personal pension scheme where income withdrawal was available and shall be determined in the manner specified in paragraph (4).

(6) Subject to paragraph (7), any income which is due to be paid to the claimant but has not been paid to him, shall be treated as possessed by the claimant.

(7) Paragraph (6) shall not apply to–

(a) any amount to which paragraph (8) or (9) applies;

(b) a payment to which section 74(2) or (3) of the Administration Act applies (abatement of prescribed payments from public funds which are not made before the prescribed date, and abatement from prescribed benefits where maintenance not paid); and

(c) a payment from a discretionary trust, or a trust derived from a payment made in consequence of a personal injury.

(8) This paragraph applies to an amount which is due to be paid to the claimant under an occupational pension scheme but which is not paid because the trustees or managers of the scheme have suspended or ceased payment due to an insufficiency of resources.

(9) This paragraph applies to any amount by which a payment made to the claimant from an occupational pension scheme falls short of the payment to which he was due under the scheme where the shortfall arises because the trustees or managers of the scheme have insufficient resources available to them to meet in full the scheme’s liabilities.

(10) Any payment of income, other than a payment of income made under the Macfarlane Trust, the Macfarlane (Special Payments) Trusts, the Macfarlane (Special Payments) (No.2) Trust, the Fund, the Eileen Trust or the Independent Living Funds [F6 or payments made pursuant to section 19(1)(a) of the Coal Industry Act 1994 (concessionary coal)] [F7 or to section 2 of the Employment and Training Act 1973 in respect of a person’s participation in an employment programme specified in regulation 75(1)(a)(ii) or in a training scheme specified in regulation 75(1)(b)(ii)], made —

(a) to a third party in respect of a single claimant or in respect of a single claimant or in respect of a member of the family shall be treated—

(i) in a case where that payment is derived from a payment of any benefit under the Act or under the Benefits Act, a war disablement pension or war widows pension, as possessed by that single claimant, if it would normally be paid to him, or as possessed by that member of the family, if it would normally be paid to that member;

(ii) in any other case, as possessed by that single claimant or by that member of the family to the extent that it is used for the food, ordinary clothing or footwear, household fuel, rent for which housing benefit is payable, or any housing costs to the extent that they are met under regulation 83(f) or 84(1)(g), of that single claimant or, as the case may be, of any member of the family, or is used for any council tax or water charges for which that claimant or member is liable;

(b) to 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;

but, except where sub-paragraph (a)(i) applies and in the case of a person who is, or would be, prevented from being entitled to a jobseeker’s allowance by section 14 (trade disputes), this paragraph shall not apply to any payment in kind.

(11) Where the claimant lives in a residential care home or a nursing home, or is temporarily absent from such a home, any payment made by a person other than the claimant or a member of his family in respect of some or all of the cost of maintaining the claimant or a member of his family in that home shall be treated as possessed by the claimant or by that member of his family.

(12) Where a claimant’s earnings are not ascertainable at the time of the determination of the claim or of any subsequent review the adjudication officer shall 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.

(13) 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 adjudication officer shall treat the claimant as possessing such earnings (if any) as is reasonable for that employment unless the claimant satisfies him that the means of that person are insufficient for him to pay or to pay more for the service; but this paragraph shall not apply to a claimant who is engaged by a charitable or voluntary organisation or is a volunteer if the adjudication officer is satisfied in any of those cases that it is reasonable for him to provide his services free of charge [F8 or in a case where the service is performed in connection with the claimant’s participation in an employment or training programme in accordance with regulation 19(1)(q)].

(14) Where a claimant is treated as possessing any income under any of paragraphs (1) to (11) the foregoing provisions of this Part shall 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 he does possess.

(15) Where a claimant is treated as possessing any earnings under paragraphs (12) or (13) the foregoing provisions of this Part shall 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 he does possess, except that paragraph (4) of regulation 99 (calculation of net earnings of employed earners) shall not apply and his net earnings shall be calculated by taking into account the earnings which he is treated as possessing, less—

(a) an amount in respect of income tax equivalent to an amount calculated by applying to those earnings the lower rate or, as the case may be, the lower rate and the basic rate of tax in the year of assessment less only the personal relief to which the claimant is entitled under sections 257(1), 257A(1) and 259 of the Income and Corporation Taxes Act 1988 F9 (personal reliefs) as is appropriate to his circumstances; but, if the period over which those earnings are to be taken into account is less than a year, the earnings to which the lower rate of tax is to be applied and the amount of the personal relief deductible under this paragraph shall be calculated on a pro rata basis;

(b) where the weekly amount of those earnings equals or exceeds 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; and

(c) 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.

(16) In this regulation–

“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;

“pension fund holder" means with respect to a personal pension scheme the trustees, managers or scheme administrators, as the case may be, of the scheme concerned;

“resources" has the same meaning as in section 181 of the Pension Schemes Act 1993 F10 .

Textual Amendments

F1 Reg. 105(2)(c) substituted (with effect in accordance with reg. 1(3) of the amending S.I.) by The Child Benefit, Child Support and Social Security (Miscellaneous Amendments) Regulations 1996 (S.I. 1996/1803), regs. 1(b), 42(a)

F2 Word added in reg. 105(2)(g) (with effect in accordance with reg. 1(2)(3) of the amending S.I.) by The Income-related Benefits and Jobseekers Allowance (Amendment) (No. 2) Regulations 1997 (S.I. 1997/2197), regs. 1(2), 6

F3 Reg. 105(2A) inserted (with effect in accordance with reg. 1(3) of the amending S.I.) by The Child Benefit, Child Support and Social Security (Miscellaneous Amendments) Regulations 1996 (S.I. 1996/1803), regs. 1(b), 42(b)

F4 1988 c.1.

F5 S.I. 1987/1968; paragraph (5) was added by S.I.1995/2303.

F6 Words in reg. 105(10) inserted (with effect in accordance with reg. 1(2)(3) of the amending S.I.) by The Income-related Benefits and Jobseekers Allowance (Amendment) (No. 2) Regulations 1997 (S.I. 1997/2197), regs. 1(2), 7(3)(4)(f)

F7 Words in reg. 105(10) inserted (5.1.1998) by The Social Security Amendment (New Deal) Regulations 1997 (S.I. 1997/2863), regs. 1(1), 9(a)

F8 Words in reg. 105(13) added (5.1.1998) by The Social Security Amendment (New Deal) Regulations 1997 (S.I. 1997/2863), regs. 1(1), 9(b)

F9 1988 c.1; sections 257 to 257F were substituted for section 257 by section 33 of the Finance Act 1988 (c.39); section 259 was amended by sections 30 and 35 of the Finance Act 1988, section 20 of the Finance (No.2) Act 1992 (c.48), and section 77 and Schedule 8, paragraph 6 of the Finance Act 1994 (c.9).

F10 1993 c.48.