The Tax Credits (Definition and Calculation of Income) Regulations 2002

General disregards in the calculation of income U.K.

19.—(1) For the purposes of regulation 3—

(a) the sums specified in Table 6 are disregarded in the calculation of income;

(b) the sums specified in column 1 of Table 7 are disregarded in the calculation of income if the condition in the corresponding entry in column 2 of that Table is satisfied; and

(c) the sums specified in column 1 of Table 8 are disregarded in the calculation of income to the extent specified in the corresponding entry in column 2 of that Table.

(2) In this regulation—

• “the JSA Regulations” means the Jobseeker’s Allowance Regulations 1996; and

• “the JSA (NI) Regulations” means the Jobseeker’s Allowance (Northern Ireland) Regulations 1996.

  Table 6

  Sums disregarded in the calculation of income

  1. Any payment of an employment credit under a scheme under section 2(2) of the Employment Act known as “New Deal 50 plus” or the corresponding scheme under section 1 of the Employment and Training Act (Northern Ireland) 1950.

  2. Any payment made— (a) under section 15 of the Disabled Persons (Employment Act) 1944 M1 or section 15 of the Disabled Persons (Employment) Act (Northern Ireland) 1945 M2 ; or (b) in accordance with arrangements made under section 2 of the Employment Act or section 1 of the Employment and Training Act (Northern Ireland) 1950 M3 to assist disabled persons to obtain or retain employment despite their disability.

  3. Any mandatory top-up payment made pursuant to— (a) section 2 of the Employment Act [F1 or section 1 of the Employment and Training Act (Northern Ireland) 1950] in respect of the claimant’s participation in— (i) an employment programme specified in regulation 75(1)(a)(ii)(bb) of the JSA Regulations or regulation 75(1)(a)(ii) of the JSA (NI) Regulations (Voluntary Sector Option of the New Deal); (ii) an employment programme specified in regulation 75(1)(a)(ii)(cc) of the JSA Regulations (Environmental Task Force Option of the New Deal) or regulation 75(1)(a)(iii) of the JSA (NI) Regulations; or (iii) the Intensive Activity Period of the New Deal Pilots for 25 plus specified in regulation 75(1)(a)(iv) of the JSA Regulations or, in Northern Ireland, the Preparation for Employment Programme specified in regulation 75(1)(a)(v) of the JSA (NI) Regulations M4 ; F2 ... (b) a written arrangement entered into between— (i) the Secretary of State and the person who has arranged for the claimant’s participation in the Intensive Activity Period of the New Deal for 25 plus and which is made in respect of his participation in that Period; or (ii) the Department for Employment and Learning and the person who has arranged for the claimant’s participation in the Preparation for Employment Programme and which is made in respect of the claimant’s participation in the Programme. [F3 This item applies only to the extent that the payment is not taxable as a profit of a trade, profession or vocation][F4 ; or (c) the Steps to Work Programme specified in regulation 75(1)(a)(vi) of the Jobseeker’s Allowance Regulations (Northern Ireland) 1996.]

  4. Any discretionary payment pursuant to section 2 of the Employment Act, or, in Northern Ireland, section 1(1) of the Employment and Training Act (Northern Ireland) 1950 to meet, or help to meet, special needs in respect of the claimant’s participation in the Full-Time Education and Training Option of the New Deal as specified in regulation 75(1)(b)(ii) of the JSA Regulations or of the JSA (NI) Regulations.

  5. Any— (a) education maintenance allowance in accordance with regulations made under section 518 of the Education Act 1996 M5 (payment of school expenses; grant of scholarships etc.); or (b) payment (not within sub-paragraph (a)) in respect of a course of study attended by a child or qualifying young person payable— (i) in accordance with regulations made under section 518 of the Education (Scotland) Act 1980 M6 (power to assist persons to take advantage of educational facilities) or section 12(2)(c) of the Further and Higher Education (Scotland) Act 1992 M7 (provision of financial assistance to students); or (ii )by virtue of regulations made Article 50, 51 or 55(1) of the Education and Libraries (Northern Ireland) Order 1986 (provisions to assist persons to take advantage of educational facilities) M8 .

  6. Any payment made by an employment zone contractor payable in respect of the claimant’s participation in the employment zone programme by way of— (a) a training premium; (b) a discretionary payment, being a fee, grant, loan or otherwise; or (c) any arrears of subsistence allowance paid as a lump sum.

  7. F5 . . .

  8. An amount of income equal to any qualifying maintenance payment within section 347B of the Taxes Act M9 .

  [F6 9. Any payment by way of foster care receipts to the extent that those receipts qualify for relief under [F7 Chapter 2 of Part 7 of ITTOIA.]]

  10. Any payment of maintenance, whether under a court order or not, which is made or due to be made by— (a) the claimant’s former partner, or the claimant’s partner’s former partner; or (b) the parent of a child or qualifying young person where that child or qualifying young person is a member of the claimant’s household except where that parent is the claimant or the claimant’s partner.

  11. Any payment in respect of a child or qualifying young person who is a member of the claimant’s household made— [F8 (a) to adopters which is exempt from income tax by virtue of [F9 sections 744 to 746 of ITTOIA;]] (b) by a local authority in pursuance of paragraph 15(1) of Schedule 1 to the Children Act 1989 M10 (local authority contribution to child’s maintenance); [F10 (bb) by a local authority by way of special guardianship support services pursuant to regulations under section 14F(1)(b) of the Children Act 1989; or] (c) by an authority, as defined in Article 2 of the Children (Northern Ireland) Order 1995 M11 , in pursuance of Article 15 of, and paragraph 17 of Schedule 1 to, that Order (contribution by an authority to child’s maintenance).

  12. Any payment in respect of travelling expenses— (a) in relation to England and Wales, under regulation 3, 5 or 8 of the National Health Service (Travelling Expenses and Remission of Charges) Regulations 1988 M12 ; (b) in relation to Scotland, under regulation 3, 5 or 8 of the National Health Service (Travelling Expenses and Remission of Charges) (Scotland) Regulations 1988 M13 ; (c) in relation to Northern Ireland under regulation 3, 5 or 8 of the Travelling Expenses and Remission of Charges Regulations (Northern Ireland) 1989 M14 ; or (d) made by the Secretary of State for Health, the Scottish Ministers, the Secretary of State for Wales, or the Department of Health, Personal Social Services and Public Safety and which is analogous to a payment specified in paragraph (a), (b) or (c).

  13. Any payment made by the Secretary of State or the Scottish Ministers under a scheme established to assist relatives and other persons to visit persons in custody.

  [F11 14. Any payment under the Community Care (Direct Payments) Act 1996, section 57 of the Health and Social Care Act 2001, section 12B of the Social Work (Scotland) Act 1968, Article 15A of the Health and Personal Social Services (Direct Payments) (Northern Ireland) Order 1996 [F12 or regulations made under section 57 of the Health and Social Care Act 2001 (direct payments)] or section 8 of the Carers and Direct Payments Act (Northern Ireland) 2002.]

  [F13 14A. Any payment made under the “Supporting People” programme— (a) in England and Wales, under section 93 of the Local Government Act 2000; (b) in Scotland, under section 91 of the Housing (Scotland) Act 2001; or (c) in Northern Ireland, under Article 4 of the Housing Support Services (Northern Ireland) Order 2002.]

  15. [F14 Any payment or a voucher] provided under section 95 or 98 of the Immigration and Asylum Act 1999 M15 for any former asylum-seeker or his dependants.

  16. Any payment of a provident benefit by a trade union. Here— “provident benefit” has the meaning given in section 467(2) of the Taxes Act; and “trade union” has the meaning given in section 467(4) of the Taxes Act.

  Table 7

  Sums disregarded in calculating income if conditions are satisfied

  1. Description of payment	2. [F15 Conditions] that must be satisfied
  1. Any payment in respect of any expenses incurred by a claimant who is engaged by a charitable or voluntary organisation or is a volunteer.	The claimant does not receive remuneration or profit from the engagement and is not treated as possessing any employment income under regulation 17 in respect of that engagement.
  2. A payment by way of— (a) travelling expenses reimbursed to the claimant; (b) a living away from home allowance under section 2(2)(d) of the Employment Act M16 , section 2(4)(c) of the Enterprise and New Towns (Scotland) Act 1990 M17 or section 1 of the Employment and Training Act (Northern Ireland) 1950 M18 ; (c) training grant; F16 ... (d) child care expenses reimbursed to the claimant in respect of his participation in— (i) a New Deal option, (ii) the Intensive Activity Period of the New Deal Pilots for 25 plus, F17 ... (iii) the Preparation for Employment Programme[F18 ; or (iv) the Flexible New Deal specified in regulation 75(1)(a)(v) of the Jobseeker’s Allowance Regulations 1996][F19 ; or (e) child care expenses under the Steps to Work Programme specified in regulation 75(1)(a)(vi) of the Jobseeker’s Allowance Regulations (Northern Ireland) 1996.]	The claimant— (a)participates in arrangements for training made under— (i)section 2 of the Employment Act; (ii)section 2 of the Enterprise and New Towns (Scotland) Act 1990; or (iii)section 1 of the Employment and Training Act (Northern Ireland) 1950; or (b)attends a course at an employment rehabilitation centre established under section 2 of the Employment Act. [F20 The payment is not taxable as a profit of a trade, profession or vocation.]

  Table 8

  Sums partly disregarded in the calculation of income

  Type of payment to be disregarded	Limit on, or exception to, the extent of disregard
  1. Any discretionary payment made pursuant to section 2 of the Employment Act, or, in Northern Ireland section 1(1) of the Employment and Training Act (Northern Ireland) 1950 to meet, or help meet, the claimant’s special needs in undertaking a qualifying course within the meaning of regulation 17A(7) of the JSA Regulations M19 or regulation 17A(7) of the JSA (NI) Regulations.	A payment is not within this item to the extent that it relates to travel expenses incurred as a result of the claimant’s attendance on the course if an amount in respect of those expenses has already been disregarded pursuant to regulation 8.
  2. Any payment made in respect of a career development loan paid pursuant to section 2 of the Employment Act.	A payment is not within this item to the extent that the loan has been applied for or paid in respect of living expenses for the period of education and training supported by the loan.
  3. Any payment made to the claimant or his partner in respect of a person who is not normally a member of the claimant’s household but is temporarily in his care, by— (a) a health authority; (b) a local authority; (c) a voluntary organisation; (d) that person pursuant to section 26(3A) of the National Assistance Act 1948 M20 ; (e) a primary care trust established under section 16A of the National Health Service Act 1977 M21 .	A payment is only to be disregarded by virtue of this item if— [F21 (a)] any profits F22 ... arising from the payment mentioned in column 1 are treated as nil by [F23 section 791 to 794 of ITTOIA (full rent-a-room relief)] [F24 ; or (b) excluded from profits [F25 by section 795 to 798 of ITTOIA (alternative calculation of profits if amount exceeds limit)].]
  4. Any payment made in Northern Ireland to the claimant or his partner in respect of a person who is not normally a member of the claimant’s household but is temporarily in his care— (a) pursuant to Article 36(7) of the Health and Personal Social Services (Northern Ireland) Order 1972 M22 by an authority; a voluntary organisation; or the person concerned, or (b) by a training school within the meaning of section 137 of the Children and Young Persons Act (Northern Ireland) 1968 M23 . In this item “an authority” has the meaning given by Article 2 of the Children (Northern Ireland) Order 1995.	A payment is only to be disregarded by virtue of this item if— [F26 (a)] any profits F22 ... arising from the payment mentioned in column 1 are treated as nil by [F23 section 791 to 794 of ITTOIA (full rent-a-room relief)] [F27 ; or (b) excluded from profits [F25 by section 795 to 798 of ITTOIA (alternative calculation of profits if amount exceeds limit)].]
  5. Any payment under an insurance policy taken out to insure against the risk of being unable to maintain the repayments— (a) on a loan which is secured on the dwelling house which the claimant occupies as his home; or (b) under a regulated agreement or under a hire-purchase agreement or a conditional sale agreement. For the purposes of paragraph (b)— “regulated agreement” has the meaning given in the Consumer Credit Act 1974 M24 ; and “hire-purchase agreement” and “conditional sale agreement” have the meanings given in Part 3 of the Hire-Purchase Act 1964 M25 .	A payment is only to be disregarded by virtue of this item to the extent that it is used to— (a) maintain the repayments referred to in column (1); and (b) meet any amount due by way of premiums on— (i) that policy; or (ii) in a case to which paragraph (a) of this item applies, an insurance policy taken out to insure against loss or damage to any building or part of a building which is occupied by the claimant as his home and which is required as a condition of the loan referred to in column (1).
  [F28 6.] Any payment in respect of the claimant’s attendance at court as a juror or witness.	This item applies only to the extent that the payment is not compensation for loss of earnings or for the loss of payment of social security income.
  [F29 7.] Any payment of a sports award except to the extent that it has been made in respect of living expenses.	For the purposes of this item “living expenses” does not include— (a)the cost of vitamins, minerals or other special dietary supplements intended to enhance the performance of the claimant in the sport in respect of which the award was made; or (b)accommodation costs incurred as a consequence of living away from home whilst training for, or competing in, the sport in respect of which the award was made.

Textual Amendments

F1 Words in reg. 19 Table 6 Item 3(a) inserted (6.4.2004) by The Tax Credits (Miscellaneous Amendments) Regulations 2004 (S.I. 2004/762), regs. 1(1), 16(2)(a)(i)

F2 Word in reg. 19 Table 6 Item 3 omitted (21.11.2009) by virtue of The Tax Credits (Miscellaneous Amendments) (No. 2) Regulations 2009 (S.I. 2009/2887), regs. 1(a), 7(2)(a)

F3 Words in reg. 19 Table 6 Item 3 added (6.4.2004) by The Tax Credits (Miscellaneous Amendments) Regulations 2004 (S.I. 2004/762), regs. 1(1), 16(2)(a)(ii)

F4 Words in reg. 19 Table 6 Item 3 inserted (21.11.2009) by The Tax Credits (Miscellaneous Amendments) (No. 2) Regulations 2009 (S.I. 2009/2887), regs. 1(a), 7(2)(b)

F5 Reg. 19 Table 6 Item 7 omitted (6.4.2004) by virtue of The Tax Credits (Miscellaneous Amendments) Regulations 2004 (S.I. 2004/762), regs. 1(1), 16(2)(b)

F6 Reg. 19 Table 6 Item 9 substituted (26.11.2003) by The Tax Credits (Miscellaneous Amendments No.2) Regulations 2003 (S.I. 2003/2815), regs. 1, 11(2)

F7 Words in reg. 19 Table 6 Item 9 substituted (6.4.2006) by The Tax Credits (Miscellaneous Amendments) Regulations 2006 (S.I. 2006/766), regs. 1, 19(2)(a)

F8 Reg. 19 Table 6 Item 11(a) substituted (26.11.2003) by The Tax Credits (Miscellaneous Amendments No.2) Regulations 2003 (S.I. 2003/2815), regs. 1, 11(3)

F9 Words in reg. 19 Table 6 Item 11 substituted (6.4.2006) by The Tax Credits (Miscellaneous Amendments) Regulations 2006 (S.I. 2006/766), regs. 1, 19(2)(b)

F10 Words in reg. 19 Table 6 Item 11(bb) inserted (6.4.2004) by The Tax Credits (Miscellaneous Amendments) Regulations 2004 (S.I. 2004/762), regs. 1(1), 16(2)(c)

F11 Reg. 19 Table 6 Item 14 substituted (26.11.2003) by The Tax Credits (Miscellaneous Amendments No.2) Regulations 2003 (S.I. 2003/2815), regs. 1, 11(4)

F12 Words in reg. 19 Table 6 item 14 added (1.11.2004) by The Community Care, Services for Carers and Children’s Services (Direct Payments) (Wales) Regulations 2004 (S.I. 2004/1748), reg. 1(b), Sch. 2 para. 3

F13 Reg. 19 Table 6 Item 14A inserted (6.4.2003) by The Tax Credits (Definition and Calculation of Income) (Amendment) Regulations 2003 (S.I. 2003/732), regs. 1, 11(2)(a)

F14 Words in reg. 19 Table 6 Item 15 substituted (6.4.2003) by The Tax Credits (Definition and Calculation of Income) (Amendment) Regulations 2003 (S.I. 2003/732), regs. 1, 11(2)(b)

F15 Word in reg. 19 Table 7 substituted (6.4.2004) by The Tax Credits (Miscellaneous Amendments) Regulations 2004 (S.I. 2004/762), regs. 1(1), 16(3)(a)

F16 Word in reg. 19 Table 7 Item 2 omitted (21.11.2009) by virtue of The Tax Credits (Miscellaneous Amendments) (No. 2) Regulations 2009 (S.I. 2009/2887), regs. 1(a), 7(3)(a)

F17 Word in reg. 19 Table 7 Item 2 omitted (5.10.2009) by virtue of The Tax Credits (Miscellaneous Amendments) Regulations 2009 (S.I. 2009/697), regs. 1(b), 8(a)

F18 Words in reg. 19 Table 7 Item 2 added (5.10.2009) by The Tax Credits (Miscellaneous Amendments) Regulations 2009 (S.I. 2009/697), regs. 1(b), 8(b)

F19 Words in reg. 19 Table 7 Item 2 inserted (21.11.2009) by The Tax Credits (Miscellaneous Amendments) (No. 2) Regulations 2009 (S.I. 2009/2887), regs. 1(a), 7(3)(b)

F20 Words in reg. 19 Table 7 Item 2 added (6.4.2004) by The Tax Credits (Miscellaneous Amendments) Regulations 2004 (S.I. 2004/762), regs. 1(1), 16(3)(b)

F21 Words in reg. 19 Table 8 Item 3 renumbered as reg. 19 Table 8 Item 3(a) (6.4.2003) by The Tax Credits (Definition and Calculation of Income) (Amendment) Regulations 2003 (S.I. 2003/732), regs. 1, 11(3)(a)(i)

F22 Words in reg. 19 Table 8 Items 3, 4 omitted (6.4.2006) by virtue of The Tax Credits (Miscellaneous Amendments) Regulations 2006 (S.I. 2006/766), regs. 1, 19(3)(a)(i)

F23 Words in reg. 19 Table 8 Items 3, 4 substituted (6.4.2006) by The Tax Credits (Miscellaneous Amendments) Regulations 2006 (S.I. 2006/766), regs. 1, 19(3)(a)(ii)

F24 Reg. 19 Table 8 Item 3(b) and preceding word added (6.4.2003) by The Tax Credits (Definition and Calculation of Income) (Amendment) Regulations 2003 (S.I. 2003/732), regs. 1, 11(3)(a)(ii)

F25 Words in reg. 19 Table 8 Items 3, 4 substituted (6.4.2006) by The Tax Credits (Miscellaneous Amendments) Regulations 2006 (S.I. 2006/766), regs. 1, 19(3)(b)

F26 Words in reg. 19 Table 8 Item 4 renumbered as reg. 19 Table 8 Item 4(a) (6.4.2003) by The Tax Credits (Definition and Calculation of Income) (Amendment) Regulations 2003 (S.I. 2003/732), regs. 1, 11(3)(a)(i)

F27 Reg. 19 Table 8 Item 4(b) and preceding word added (6.4.2003) by The Tax Credits (Definition and Calculation of Income) (Amendment) Regulations 2003 (S.I. 2003/732), regs. 1, 11(3)(a)(ii)

F28 Reg. 19 Table 8 Item 5 renumbered as reg. 19 Table 8 Item 6 (6.4.2003) by The Tax Credits (Definition and Calculation of Income) (Amendment) Regulations 2003 (S.I. 2003/732), regs. 1, 11(3)(b)

F29 Reg. 19 Table 8 Item 6 renumbered as reg. 19 Table 8 Item 7 (6.4.2003) by The Tax Credits (Definition and Calculation of Income) (Amendment) Regulations 2003 (S.I. 2003/732), regs. 1, 11(3)(b)

Marginal Citations

M1 1944 c.10. Section 15 was amended by section 61 of the Disability Discrimination Act 1995 (c.50).

M2 1945 c.6 (N.I.).

M3 1950 c.29 (N.I.).

M4 Paragraph (1)(a)(v) was inserted by regulation 5(a) of S.R. 2001 No. 151.

M5 1996 c.56. Section 518 was substituted by section 129 of the Schools Standards and Framework Act 1998 (c.31).

M6 1980 c.44.

M7 1992 c.37.

M8 S.I. 1986/594 (N.I. 3). Article 55(1) was amended by Schedule 5 to the Education and Libraries (Northern Ireland) Order 1993 (S.I. 1993/2810 (N.I. 12)).

M9 1988 c.1. Section 347B was inserted by section 36 of the Finance Act 1988 (c.39) and amended (for the tax year beginning on 6th April 1990 and subsequent tax years) by paragraph 13 of Schedule 3, further amended by Part 8 of Schedule 14 to the Finance Act 1988, section 5 of and paragraph 6 of Schedule 4 to the Contracts (Applicable Law) Act 1990 (c.36), sections 61 and 62 of the Finance (No. 2) Act 1992 (c.48), section 79 to and Schedule 26 Part 5(1) to the Finance Act 1994 (c.9), paragraphs 11 and 15 of Schedule 2 to the Jobseekers Act 1995 (c.18), section 27 to and Schedule 27 Part 3(1) of the Finance Act 1998 (c.36) and sections 36 and 139 of and Schedule 20 Part 3(6) to the Finance Act 1999 (c.16).

M10 1989 c.41.

M11 S.I. 1995/755 (N.I. 2).

M12 S.I. 1988/551.

M13 S.I. 1988/546.

M14 S.R. 1989 No. 348, modified by S.R. 1990 No. 164.

M15 1999 c.33.

M16 Section 2 was substituted by section 25 of the Employment Act 1988 (c.19) and amended by section 29(4) of and Schedule 7 Part 1 to the Employment Act 1989 (c.38) and section 47(1) of the Trade Union Reform and Employment Rights Act 1993 (c.19).

M17 1990 c.35.

M18 1950 c.29.

M19 Regulation 17A(7) was amended by regulation 2(4) of S.I. 1998/2874 and regulation 2 of S.I. 1999/3083.

M20 1948 c.29. Section 26(3A) was inserted by section 42(4) of the National Health Service and Community Care Act 1990 (c.19).

M21 1977 c.49. Section 16A was inserted by section 2 of the Health Act 1999 (c.8).

M22 S.I. 1972/1265 (N.I. 14). Article 36 was substituted by Article 25 of S.I. 1991/194 (N.I. 1) and amended by paragraph 2(4) and (5) of Schedule 1 to S.I. 1992/3204 (N.I. 20).

M23 1968 c.34 (N.I.). Section 137 was amended by Schedule 18 to the Health and Personal Social Services (Northern Ireland) Order 1972 and Article 185(1) of, and paragraph 42 of Schedule 9 to, the Children (Northern Ireland) Order 1995 (S.I. 1995/755 (N.I. 2)).

M24 1974 c.39.

M25 1964 c.53.