The Social Security Benefit (Computation of Earnings) Regulations 1996

Notional earnings E+W+S

4.—(1) Where a claimant’s earnings are not ascertainable at the date [F1 of the determination of the claim or of any subsequent review the adjudicating authority shall treat the claimant [F1 on which a decision falls to be made by the Secretary of State under Chapter II of Part I of the Social Security Act 1998 or regulations made thereunder the claimant shall be treated]] 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.

(2) 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, [F2 the adjudicating authority the Secretary of State shall treat the claimant [F2 the claimant shall be treated]] as possessing such earnings (if any) as is reasonable for that employment unless the claimant satisfies [F3 the adjudicating authority [F3 the Secretary of State]] that the means of that person are insufficient for him to pay or to pay more for the service; [F4 but this paragraph shall not apply to a claimant–

(i) who is engaged by a charitable or voluntary organisation or is a volunteer if the Secretary of State is satisfied in any of those cases that it is reasonable for him to provide his services free of charge; or

(ii) who is participating in an employment or training programme 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; and for this purpose “ employment or training programme” has the meaning given in regulation 19(3) of the Jobseeker’s Allowance Regulations 1996 and “training allowance” has the meaning given in regulation 1(3) of those Regulations.]

(3) Where a claimant is treated as possessing any earnings under paragraph (1) or (2) these Regulations 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 10 (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 M1 (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 Contributions and 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 M2 ; 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.

Textual Amendments

F1 Words in reg. 4(1) substituted (E.W.) (29.11.1999) by The Social Security Act 1998 (Commencement No. 12 and Consequential and Transitional Provisions) Order 1999 (S.I. 1999/3178), reg. 1, Sch. 16 para. 3(a)

F2 Words in reg. 4(2) substituted (E.W.) (29.11.1999) by The Social Security Act 1998 (Commencement No. 12 and Consequential and Transitional Provisions) Order 1999 (S.I. 1999/3178), reg. 1, Sch. 16 para. 3(b)

F3 Words in reg. 4(2) substituted (E.W.) (6.9.1999) by The Social Security Act 1998 (Commencement No. 9, and Savings and Consequential and Transitional Provisions) Order 1999 (S.I. 1999/2422), reg. 1, Sch. 13 para. 1

F4 Words in reg. 4(2) substituted (3.4.2000) by The Social Security (Approved Work) Regulations 2000 (S.I. 2000/678), regs. 1, 8

Marginal Citations

M1 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).

M2 Section 8(1) was amended by the Pension Schemes Act 1993 (c.48), Schedule 8, paragraph 33.