PART VIII INCOME AND CAPITAL
Chapter V Other Income
Notional incomeC3105
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;
d
F26working tax credit or child tax credit;
e
a jobseeker’s allowance;
F36f
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
g
a personal pension scheme where the claimant is aged under 60;F7or
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; F8or
i
rehabilitation allowance made under section 2 of the Employment and Training Act 1973,
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.
F52A
F28This 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 1988F1, 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 F12the Secretary of State 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 1987F2.
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.
F17d
any earnings which are due to an employed earner on the termination of his employment by reason of redundancy but which have not been paid to him.
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
F10Any payment of income, other than a payment of income specified in paragraph (10A)—
a
to a third party in respect of a single claimant or in respect of a single claimant or F30in respect of a member of the familyF30his partner 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, F37a payment from the Armed Forces and Reserve Forces Compensation Scheme, a war disablement pension or war widows pension F25or war widower’s pension, as possessed by that single claimant, if it would normally be paid to him, or as possessed F29by that member of the family, if it would normally be paid to that memberF29by his partner, if it would normally be paid to his partner;
F16ia
ii
in any other case, as possessed by that single claimant F33or by that member of the familyF33or his partner 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)F22, 84(1)(g), 86A(d) or 86B(e), of that single claimant or, as the case may be, F33of any member of the familyF33of his partner, or is used for any council tax or water charges for which that claimant or F33member is liableF33partner is liable;
b
F34to 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;
F34to 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;
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 F38to the third party.
F910A
Paragraph (10) shall not apply in respect of a payment of income made—
a
under the Macfarlane Trust, the Macfarlane (Special Payments) Trust, the Macfarlane (Special Payments) (No.2) Trust, the Fund, the Eileen Trust or the Independent Living Funds;
b
pursuant to section 19(1)(a) of the Coal Industry Act 1994 (concessionary coal); or
C1c
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);
ii
in a training scheme specified in regulation 75(1)(b)(ii); or
F23iia
in the Intensive Activity Period for 50 plus or in the Intensive Activity Period specified in regulation 75(1)(a)(iv); or
iii
in a qualifying course within the meaning specified in regulation 17A(7).
F15d
under an occupational pension scheme or in respect of a pension or other periodical payment made under a personal pension scheme 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 F6;
ii
the payment is made to the trustee in bankruptcy or any other person acting on behalf of the creditors; and
11
Where the claimant F39resides in a care home, an Abbeyfield Home or an independent hospital, or is temporarily absent from such a home or hospital, 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 F32or a member of his family in that home shall be treated as possessed by the claimant or by that member of his familyF32or his partner in that home shall be treated as possessed by the claimant or his partner.
F1911A
Where the amount of a subsistence allowance paid to a claimant in a benefit week is less than the amount of income-based jobseeker’s allowance that person would have received in that benefit week had it been payable to him, less 50p, he shall be treated as possessing the amount which is equal to the amount of income-based jobseeker’s allowance which he would have received in that week, less 50p.
12
Where a claimant’s earnings are not ascertainable at the time of the determination of the claim or of any F14review or supersessionF13the Secretary of State 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.
C213
F20Subject to paragraph (13A), 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,
F1813A
Paragraph (13) shall not apply–
a
to a claimant who is engaged by a charitable or voluntary organisation or who is a volunteer if the Secretary of State is satisfied in any of those cases that it is reasonable for him to provide those services free of charge;
b
in a case where the service is performed in connection with–
i
the claimant’s participation in an employment or training programme in accordance with regulation 19(1)(q)F24, other than where the service is performed in connection with the claimant’s participation in the Intensive Activity Period for 50 plus or in the Intensive Activity Period specified in regulation 75(1)(a)(iv); or
ii
the claimant’s or the claimant’s partner’s participation in an employment or training programme as defined in regulation 19(3) for which a training allowance is not payable or, where such an allowance is payable, it is payable for the sole purpose of reimbursement of travelling or meal expenses to the person participating in that programme.
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 F3 (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 1993F4.