PART 6Income and capital
SECTION 1General
Calculation of income and capital of members of claimant's family and of a polygamous marriage25
1
The income and capital of a claimant's partner which by virtue of section 136(1) of the Act is to be treated as income and capital of the claimant, shall be calculated or estimated in accordance with the following provisions of this Part in like manner as for the claimant; and any reference to the “claimant” shall, except where the context otherwise requires, be construed for the purposes of this Part as if it were a reference to his partner.
2
Where a claimant or the partner of a claimant is married polygamously to two or more members of his household—
a
the claimant shall be treated as possessing capital and income belonging to each such member; and
b
the income and capital of that member shall be calculated in accordance with the following provisions of this Part in like manner as for the claimant.
3
The income and capital of a child or young person shall not be treated as the income and capital of the claimant.
Circumstances in which income of non-dependant is to be treated as claimant's26
1
Where it appears to the relevant authority that a non-dependant and the claimant have entered into arrangements in order to take advantage of the housing benefit scheme and the non-dependant has more capital and income than the claimant, that authority shall, except where the claimant is on income supportF151, an income-based jobseeker's allowance or an income-related employment and support allowance, treat the claimant as possessing capital and income belonging to that non-dependant and, in such a case, shall disregard any capital and income which the claimant does possess.
2
Where a claimant is treated as possessing capital and income belonging to a non-dependant under paragraph (1) the capital and income of that non-dependant shall be calculated in accordance with the following provisions of this Part in like manner as for the claimant and any reference to the “claimant” shall, except where the context otherwise requires, be construed for the purposes of this Part as if it were a reference to that non-dependant.
SECTION 2Income
Calculation of income on a weekly basis27
1
Subject to regulations 34 (disregard of changes in tax, contributions etc), and 80 and 81 (calculation of weekly amounts and rent free periods) for the purposes of section 130(1)(c) of the Act (conditions of entitlement to housing benefit) the income of a claimant shall be calculated on a weekly basis—
a
by estimating the amount which is likely to be his average weekly income in accordance with this Section and Sections 3 to 5 of this Part and Sections 1 and 3 of Part 7;
b
by adding to that amount the weekly income calculated under regulation 52 (calculation of tariff income from capital); and
c
by then deducting any relevant child care charges to which regulation 28 (treatment of child care charges) applies from any earnings which form part of the average weekly income or, in a case where the conditions in paragraph (2) are met, from those earnings plus whichever credit specified in sub-paragraph (b) of that paragraph is appropriate, up to a maximum deduction in respect of the claimant's family of whichever of the sums specified in paragraph (3) applies in his case.
2
The conditions of this paragraph are that—
a
the claimant's earnings which form part of his average weekly income are less than the lower of either his relevant child care charges or whichever of the deductions specified in paragraph (3) otherwise applies in his case; and
b
that claimant or, if he is a member of a couple either the claimant or his partner, is in receipt of either working tax credit or child tax credit.
3
The maximum deduction to which paragraph (1)(c) above refers shall be—
4
For the purposes of paragraph (1) “income” includes capital treated as income under regulation 41 (capital treated as income) and income which a claimant is treated as possessing under regulation 42 (notional income).
Treatment of child care charges28
1
This regulation applies where a claimant is incurring relevant child care charges and—
a
is a lone parent and is engaged in remunerative work;
b
is a member of a couple both of whom are engaged in remunerative work; or
c
is a member of a couple where one member is engaged in remunerative work and the other—
i
is incapacitated;
ii
is an in-patient in hospital; or
iii
is in prison (whether serving a custodial sentence or remanded in custody awaiting trial or sentence).
2
For the purposes of paragraph (1) and subject to paragraph (4), a person to whom paragraph (3) applies shall be treated as engaged in remunerative work for a period not exceeding 28 weeks during which he—
a
is paid statutory sick pay;
b
is paid short-term incapacity benefit at the lower rate under sections 30A to 30E of the ActM1;
F144ba
is paid an employment and support allowance;
c
is paid income support on the grounds of incapacity for work under regulation 4ZA of, and paragraph 7 or 14 of Schedule 1B to, the Income Support RegulationsM2; or
3
This paragraph applies to a person who was engaged in remunerative work immediately before—
a
the first day of the period in respect of which he was first paid statutory sick pay, short-term incapacity benefitF84, an employment and support allowance or income support on the grounds of incapacity for work; or
b
the first day of the period in respect of which earnings are credited,
as the case may be.
4
In a case to which paragraph (2)(c) or (d) applies, the period of 28 weeks begins on the day on which the person is first paid income support or on the first day of the period in respect of which earnings are credited, as the case may be.
5
Relevant child care charges are those charges for care to which paragraphs (6) and (7) apply, and shall be calculated on a weekly basis in accordance with paragraph (10).
6
The charges are paid by the claimant for care which is provided—
a
in the case of any child of the claimant's family who is not disabled, in respect of the period beginning on that child's date of birth and ending on the day preceding the first Monday in September following that child's fifteenth birthday; or
b
in the case of any child of the claimant's family who is disabled, in respect of the period beginning on that person's date of birth and ending on the day preceding the first Monday in September following that person's sixteenth birthday.
7
The charges are paid for care which is provided by one or more of the care providers listed in paragraph (8) and are not paid—
a
in respect of the child's compulsory education;
b
by a claimant to a partner or by a partner to a claimant in respect of any child for whom either or any of them is responsible in accordance with regulation 20 (circumstances in which a person is treated as responsible or not responsible for another); or
c
in respect of care provided by a relative of a child wholly or mainly in the child's home.
8
The care to which paragraph (7) refers may be provided—
a
out of school hours, by a school on school premises or by a local authority—
i
for children who are not disabled in respect of the period beginning on their eighth birthday and ending on the day preceding the first Monday in September following their fifteenth birthday; or
ii
for children who are disabled in respect of the period beginning on their eighth birthday and ending on the day preceding the first Monday in September following their sixteenth birthday;
b
by a child care provider approved in accordance with the Tax Credit (New Category of Child Care Provider) Regulations 1999M4;
c
F55d
by a person who is excepted from registration under Part 2 of the Children and Families (Wales) Measure 2010 because the child care that person provides is in a school or establishment referred to in article 11, 12 or 14 of the Child Minding and Day Care Exceptions (Wales) Order 2010;
F21e
by—
i
persons registered under section 59(1) of the Public Services Reform (Scotland) Act 2010; or
ii
local authorities registered under section 83(1),
where the care provided is child minding or day care of children within the meaning of that Act; or
f
by a person prescribed in regulations made pursuant to section 12(4) of the Tax Credits Act; F7or
g
by a person who is registered under Chapter 2 or 3 of Part 3 of the Childcare Act 2006; or
h
by any of the schools mentioned in section 34(2) of the Childcare Act 2006 in circumstances where the requirement to register under Chapter 2 of Part 3 of that Act does not apply by virtue of section 34(2) of that Act; or
i
by any of the schools mentioned in section 53(2) of the Childcare Act 2006 in circumstances where the requirement to register under Chapter 3 of Part 3 of that Act does not apply by virtue of section 53(2) of that Act; or
j
by any of the establishments mentioned in section 18(5) of the Childcare Act 2006 in circumstances where the care is not included in the meaning of “childcare” for the purposes of Part 1 and Part 3 of that Act by virtue of that subsection; or
k
by a foster parent F158or kinship carer under the Fostering Services Regulations 2002, the Fostering Services (Wales) Regulations 2003 or the F127Looked After Children (Scotland) Regulations 2009 in relation to a child other than one whom the foster parent is fostering F159or kinship carer is looking after; or
l
by a domiciliary care worker under the Domiciliary Care Agencies Regulations 2002 or F19by a person who is employed, or engaged under a contract for services, to provide care and support by the provider of a domiciliary support service within the meaning of Part 1 of the Regulation and Inspection of Social Care (Wales) Act 2016; or
m
by a person who is not a relative of the child wholly or mainly in the child’s home.
9
In paragraphs (6) and (8)(a), “the first Monday in September” means the Monday which first occurs in the month of September in any year.
10
Relevant child care charges shall be estimated over such period, not exceeding a year, as is appropriate in order that the average weekly charge may be estimated accurately having regard to information as to the amount of that charge provided by the child minder or person providing the care.
11
For the purposes of paragraph (1)(c) the other member of a couple is incapacitated where—
a
F135the claimant’s applicable amount includes a disability premium on account of the other member’s incapacity F119or the support component or F13the other member is a member of the work-related activity groupF124... on account of the other member having limited capability for work;—
i
a disability premium; or
ii
a higher pensioner premium by virtue of the satisfaction of paragraph 11(2)(b) of Schedule 3,
on account of the other member's incapacity;
b
F161ba
the claimant's applicable amount would include the support component or F143the other member would be a member of the work-related activity groupF75... on account of the other member having limited capability for work but for that other member being treated as not having limited capability for work by virtue of a determination made in accordance with the Employment and Support Allowance Regulations F110or the Employment and Support Allowance Regulations 2013;
c
the claimant (within the meaning of regulation 2) is, or is treated as, incapable of work and has been so incapable, or has been so treated as incapable, of work in accordance with the provisions of, and regulations made under, Part 12A of the Act (incapacity for work) for a continuous period of not less than 196 days; and for this purpose any two or more separate periods separated by a break of not more than 56 days shall be treated as one continuous period;
F22ca
the claimant (within the meaning of regulation 2(1)) has, or is treated as having, limited capability for work and has had, or been treated as having, limited capability for work in accordance with the Employment and Support Allowance Regulations F139or the Employment and Support Allowance Regulations 2013 for a continuous period of not less than 196 days and for this purpose any two or more separate periods separated by a break of not more than 84 days must be treated as one continuous period;
d
there is payable in respect of him one or more of the following pensions or allowances—
i
long-term incapacity benefit or short-term incapacity benefit at the higher rate under Schedule 4 to the Act;
ii
attendance allowance under section 64 of the Act;
iii
severe disablement allowance under section 68 of the Act;
iv
disability living allowance under section 71 of the Act;
F42iva
child disability payment;
v
increase of disablement pension under section 104 of the Act;
vi
a pension increase F29paid as part of a war disablement pension or under an industrial injuries scheme which is analogous to an allowance or increase of disablement pension under head (ii), (iv) or (v) above;
F103vii
main phase employment and support allowance;
F152viii
personal independence payment;
F15ix
armed forces independence payment;
e
a pensionF100, allowance or payment to which head (ii), (iv), (v), (vi) or (viii) of sub-paragraph (d) above refers was payable on account of his incapacity but has ceased to be payable in consequence of his becoming a patient F94, which in this regulation shall mean a person (other than a person who is serving a sentence of imprisonment or detention in a youth custody institution) who is regarded as receiving free in-patient treatment within the meaning of F33regulation 2(4) and (5) of the Social Security (Hospital In-Patients) Regulations 2005;
f
sub-paragraph (d) or (e) would apply to him if the legislative provisions referred to in those sub-paragraphs were provisions under any corresponding enactment having effect in Northern Ireland; or
g
he has an invalid carriage or other vehicle provided to him by the Secretary of State under section 5(2)(a) of and Schedule 2 to the National Health Service Act 1977 M7or by Scottish Ministers under section 46 of the National Health Service (Scotland) Act 1978 M8or provided by the F182Department of Health, Social Services and Public Safety in Northern Ireland under Article 30(1) of the Health and Personal Social Services (Northern Ireland) Order 1972.
12
For the purposes of paragraph (11), once paragraph (11)(c) applies to the claimant, if he then ceases, for a period of 56 days or less, to be incapable, or to be treated as incapable, of work, that paragraph shall, on his again becoming so incapable, or so treated as incapable, of work at the end of that period, immediately thereafter apply to him for so long as he remains incapable, or is treated as remaining incapable, of work.
F11812A
For the purposes of paragraph (11), once paragraph (11)(ca) applies to the claimant, if he then ceases, for a period of 84 days or less, to have, or to be treated as having, limited capability for work, that paragraph is, on his again having, or being treated as having, limited capability for work at the end of that period, immediately thereafter to apply to him for so long as he has, or is treated as having, limited capability for work.
13
For the purposes of paragraphs (6) and (8)(a), a person is disabled if he is a person—
a
in respect of whom disability living allowance is payable, or has ceased to be payable solely because he is a patient;
F174aa
in respect of whom child disability payment is payable;
F132b
who is certified as severely sight impaired or blind by a consultant ophthalmologist;
c
d
e
in respect of whom armed forces independence payment is payable.
14
For the purposes of—
a
paragraph (1) a person on maternity leave, paternity leaveF14, shared parental leaveF78, parental bereavement leave or adoption leave shall be treated as if she is engaged in remunerative work for the period specified in sub-paragraph (b) (“the relevant period”) provided that—
i
ii
the claimant is incurring relevant child care charges within the meaning of paragraph (5); and
iii
she is entitled to statutory maternity pay under section 164 of the Act, F5statutory paternity pay by virtue of section 171ZA or 171ZB of the ActF171F5... statutory paternity pay by virtue of section 171ZA or 171ZB of the Act M9,F98additional statutory paternity pay by virtue of section 171ZEA or 171ZEB of the Act, statutory adoption pay by virtue of section 171ZL of the ActM10, maternity allowance under section 35 of the ActF17, statutory shared parental pay by virtue of section 171ZU or 171ZV of the ActF162, statutory parental bereavement pay by virtue of section 171ZZ6 of the Act or qualifying support;
b
sub-paragraph (a) the relevant period shall begin on the day on which the person's maternity leave, paternity leaveF181, parental bereavement leave or adoption leave commences and shall end on—
i
the date that leave ends;
ii
if no child care element of working tax credit is in payment on the date that entitlement to maternity allowance, qualifying support, statutory maternity pay, F156statutory paternity pay, statutory adoption payF36, statutory shared parental pay or statutory parental bereavement pay ends, the date that entitlement ends; or
iii
if a child care element of working tax credit is in payment on the date that entitlement to maternity allowance, qualifying support, statutory maternity pay, F111statutory paternity pay, statutory adoption pay F188, statutory shared parental pay or statutory parental bereavement pay ends, the date that entitlement to that award of the child care element of working tax credit ends,
whichever shall occur first.
15
In paragraph (14)—
a
“qualifying support” means income support to which that person is entitled by virtue of paragraph 14B of Schedule 1B to the Income Support RegulationsM11; and
b
“child care element” of working tax credit means the element of working tax credit prescribed under section 12 of the Tax Credits Act (child care element).
Average weekly earnings of employed earners29
1
Where a claimant's income consists of earnings from employment as an employed earner his average weekly earnings shall be estimated by reference to his earnings from that employment—
a
over a period immediately preceding the benefit week in which the claim is made or treated as made and being a period of—
i
5 weeks, if he is paid weekly; or
ii
2 months, if he is paid monthly; or
b
whether or not sub-paragraph (a)(i) or (ii) applies, where a claimant's earnings fluctuate, over such other period preceding the benefit week in which the claim is made or treated as made as may, in any particular case, enable his average weekly earnings to be estimated more accurately.
2
Where the claimant has been in his employment for less than the period specified in paragraph (1)(a)(i) or (ii)—
a
if he has received any earnings F20or expects to receive an amount of earnings for the period that he has been in that employment and those earnings are likely to represent his average weekly earnings from that employment his average weekly earnings shall be estimated by reference to those earnings;
b
in any other case, the relevant authority shall require the claimant's employer to furnish an estimate of the claimant's likely weekly earnings over such period as the relevant authority may require and the claimant's average weekly earnings shall be estimated by reference to that estimate.
3
Where the amount of a claimant's earnings changes during an award the relevant authority shall estimate his average weekly earnings by reference to his likely earnings from the employment over such period as is appropriate in order that his average weekly earnings may be estimated accurately but the length of the period shall not in any case exceed 52 weeks.
4
For the purposes of this regulation the claimant's earnings shall be calculated in accordance with Section 3 of this Part.
F128Date on which income consisting of earnings from employment as an employed earner are taken into account29A
1
A claimant’s average weekly earnings from employment estimated pursuant to regulation 29 (Average weekly earnings of employed earners) and Section 3 (Employed earners) of this Part shall be taken into account—
a
in the case of a claim, on the date that the claim was made or treated as made and the first day of each benefit week thereafter, regardless of whether those earnings were actually received in that benefit week;
b
in the case of a claim or award where the claimant commences employment, the first day of the benefit week following the date the claimant commences that employment, and the first day of each benefit week thereafter, regardless of whether those earnings were actually received in that benefit week; or
c
in the case of a claim or award where the claimant’s average weekly earnings from employment change, the first day of the benefit week following the date of the change, and the beginning of each benefit week thereafter, regardless of whether those earnings were actually received in that benefit week.
Average weekly earnings of self-employed earners30
1
Where a claimant's income consists of earnings from employment as a self-employed earner his average weekly earnings shall be estimated by reference to his earnings from that employment over such period as is appropriate in order that his average weekly earnings may be estimated accurately but the length of the period shall not in any case exceed a year.
2
For the purposes of this regulation the claimant's earnings shall be calculated in accordance with Section 4 of this Part.
Average weekly income other than earnings31
1
A claimant's income which does not consist of earnings shall, except where paragraph (2) applies, be estimated over such period as is appropriate in order that his average weekly income may be estimated accurately but the length of the period shall not in any case exceed 52 weeks; and nothing in this paragraph shall authorise an authority to disregard any such income other than that specified in Schedule 5.
2
The period over which any benefit under the benefit Acts is to be taken into account shall be the period in respect of which that benefit is payable.
3
For the purposes of this regulation income other than earnings shall be calculated in accordance with Section 5 of this Part.
Calculation of average weekly income from tax credits32
1
This regulation applies where a claimant receives a tax credit.
2
Where this regulation applies, the period over which a tax credit is to be taken into account shall be the period set out in paragraph (3).
3
Where the instalment in respect of which payment of a tax credit is made is—
a
a daily instalment, the period is 1 day, being the day in respect of which the instalment is paid;
b
a weekly instalment, the period is 7 days, ending on the day on which the instalment is due to be paid;
c
a two weekly instalment, the period is 14 days, commencing 6 days before the day on which the instalment is due to be paid;
d
a four weekly instalment, the period is 28 days, ending on the day on which the instalment is due to be paid.
4
For the purposes of this regulation “tax credit” means child tax credit or working tax credit.
Calculation of weekly income33
1
For the purposes of regulations 29 (average weekly earnings of employed earners), 31 (average weekly income other than earnings) and 32 (calculation of average weekly income from tax credits), where the period in respect of which a payment is made—
a
does not exceed a week, the weekly amount shall be the amount of that payment;
b
exceeds a week, the weekly amount shall be determined—
i
in a case where that period is a month, by multiplying the amount of the payment by 12 and dividing the product by 52;
ii
in any other case, by dividing the amount of the payment by the number equal to the number of days in the period to which it relates and multiplying the quotient by 7.
2
For the purposes of regulation 30 (average weekly earnings of self-employed earners) the weekly amount of earnings of a claimant shall be determined by dividing his earnings over the assessment period by the number equal to the number of days in that period and multiplying the quotient by 7.
Disregard of changes in tax, contributions etc34
In calculating the claimant's income the appropriate authority may disregard any legislative change—
a
in the basic or other rates of income tax;
F91aa
in the Scottish basic or other rates of income tax;
b
in the amount of any personal tax F68reliefs under Chapters 2, 3 and 3A of Part 3 of the Income Tax Act 2007;
c
in the rates of F136national insurance contributions payable under the Act or in the lower earnings limit or upper earnings limit for Class 1 contributions under the Act, the lower or upper limits applicable to Class 4 contributions under the Act or the amount specified in section 11(4) of the Act (F93small profits threshold in relation to Class 2 contributions);
d
in the amount of tax payable as a result of an increase in the weekly rate of Category A, B, C or D retirement pension or any addition thereto or any graduated pension payable under the Act F66or a state pension under Part 1 of the Pensions Act 2014;
e
in the maximum rate of child tax credit or working tax credit,
for a period not exceeding 30 benefit weeks beginning with the benefit week immediately following the date from which the change is effective.
SECTION 3Employed earners
Earnings of employed earners35
1
Subject to paragraph (2), “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 payment in lieu of remuneration except any periodic sum paid to a claimant on account of the termination of his employment by reason of redundancy;
c
any payment in lieu of notice or any lump sum payment intended as compensation for the loss of employment but only in so far as it represents loss of income;
d
any holiday pay except any payable more than 4 weeks after termination or interruption of the employment;
e
any payment by way of a retainer;
f
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;
g
any award of compensation made under section 112(4) or 117(3)(a) of the Employment Rights Act 1996 M12 (remedies and compensation for unfair dismissal);
F140gg
any payment or remuneration made under section 28, 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);
h
any such sum as is referred to in section 112 of the Act (certain sums to be earnings for social security purposes);
i
j
k
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 Part 5 of Schedule 3 to the Social Security (Contributions) Regulations 2001 M13.
2
Earnings shall not include—
a
subject to paragraph (3), any payment in kind;
b
any payment in respect of expenses wholly, exclusively and necessarily incurred in the performance of the duties of the employment;
c
any occupational pension.
3
Paragraph (2)(a) shall not apply in respect of any non-cash voucher referred to in paragraph (1)(k).
Calculation of net earnings of employed earners36
1
For the purposes of regulation 29 (average weekly earnings of employed earners), the earnings of a claimant derived or likely to be derived from employment as an employed earner to be taken into account shall, subject to paragraph (2), be his net earnings.
2
There shall be disregarded from a claimant's net earnings, any sum, where applicable, specified in paragraphs 1 to 14 of Schedule 4.
3
For the purposes of paragraph (1) net earnings shall, except where paragraph (6) applies, be calculated by taking into account the gross earnings of the claimant from that employment over the assessment period, less—
a
any amount deducted from those earnings by way of—
i
income tax;
ii
primary Class 1 contributions under the Act;
b
one-half of any sum paid by the claimant by way of a contribution towards an occupational pension scheme;
c
one-half of the amount calculated in accordance with paragraph (5) in respect of any qualifying contribution payable by the claimant; and
d
where those earnings include a payment which is payable under any enactment having effect in Northern Ireland and which corresponds to statutory sick pay, statutory maternity pay, F18statutory paternity pay, statutory adoption payF44, statutory shared parental pay or statutory parental bereavement pay, any amount deducted from those earnings by way of any contributions which are payable under any enactment having effect in Northern Ireland and which correspond to primary Class 1 contributions under the Act.
4
In this regulation “qualifying contribution” means any sum which is payable periodically as a contribution towards a personal pension scheme.
5
The amount in respect of any qualifying contribution shall be calculated by multiplying the daily amount of the qualifying contribution by the number equal to the number of days in the assessment period; and for the purposes of this regulation the daily amount of the qualifying contribution shall be determined—
a
where the qualifying contribution is payable monthly, by multiplying the amount of the qualifying contribution by 12 and dividing the product by 365;
b
in any other case, by dividing the amount of the qualifying contribution by the number equal to the number of days in the period to which the qualifying contribution relates.
6
Where the earnings of a claimant are estimated under sub-paragraph (b) of paragraph (2) of regulation 29 (average weekly earnings of employed earners), his net earnings shall be calculated by taking into account those earnings over the assessment period, less—
a
an amount in respect of income tax equivalent to an amount calculated by applying to those earnings F109... and the basic rateF122, or in the case of a Scottish taxpayer, the Scottish basic rate, of tax applicable to the assessment period less only the F50personal reliefs to which the claimant is entitled under Chapters 2, 3 and 3A of Part 3 of the Income Tax Act 2007 as are appropriate to his circumstances but, if the assessment period is less than a year, the earnings to which the F185basic rateF49, or the Scottish basic rate, of tax is to be applied and the amount of the personal F69reliefs deductible under this sub-paragraph shall be calculated on a pro rata basis;
b
an amount equivalent to the amount of the primary Class 1 contributions that would be payable by him under the Act in respect of those earnings if such contributions were payable; and
c
one-half of any sum which would be payable by the claimant by way of a contribution towards an occupational or personal pension scheme, if the earnings so estimated were actual earnings.
SECTION 4Self-employed earners
Earnings of self-employed earners37
1
2
“Earnings” shall not include any payment to which paragraph F5726, 27 or 27A of Schedule 5 refers (payments in respect of a person accommodated with the claimant under arrangements made by a local authority or voluntary organisation F87payments made to the claimant by a health authority, local authority or voluntary organisation in respect of persons temporarily in the claimant's care) F114and any payments made to a claimant under section 73(1)(b) of the Children and Young People (Scotland) Act 2014 (kinship care assistance) nor shall it include any sports award.
F612A
Earnings shall also not include any payment made in accordance with section 26A of the Children (Scotland) Act 1995 (duty to provide continuing care)—
a
to a claimant; or
b
where paragraph (2B) applies, to another person (“A”) which A passes on to the claimant.
2B
This paragraph applies only where A—
a
was formerly in the claimant’s care;
b
is aged 16 or over; and
c
continues to live with the claimant.
F273
This paragraph applies to—
a
royalties or other sums paid as a consideration for the use of, or the right to use, any copyright, design, patent or trade mark; or
b
any payment in respect of any—
i
book registered under the Public Lending Right Scheme 1982; or
ii
work made under any international public lending right scheme that is analogous to the Public Lending Right Scheme 1982,
where the claimant is the first owner of the copyright, design, patent or trade mark, or an original contributor to the book or work concerned.
F1874
Where the claimant’s earnings consist of any items to which paragraph (3) applies, those earnings shall be taken into account over a period equal to such number of weeks as is equal to the number obtained (and any fraction shall be treated as a corresponding fraction of a week) by dividing the earnings by the amount of housing benefit which would be payable had the payment not been made plus an amount equal to the total of the sums which would fall to be disregarded from the payment under Schedule 4 (sums to be disregarded in the calculation of earnings) as appropriate in the claimant’s case.
Calculation of net profit of self-employed earners38
1
For the purposes of regulation 30 (average weekly earnings of self-employed earners) the earnings of a claimant to be taken into account shall be—
a
in the case of a self-employed earner who is engaged in employment on his own account, the net profit derived from that employment;
b
M14in the case of a self-employed earner whose employment is carried on in partnership or is that of a share fisherman within the meaning of the Social Security (Mariners' Benefits) Regulations 1975 , his share of the net profit derived from that employment, less—
i
an amount in respect of income tax and of F35national insurance contributions payable under the Act calculated in accordance with regulation 39 (deduction of tax and contributions for self-employed earners); and
ii
one-half of the amount calculated in accordance with paragraph (11) in respect of any qualifying premium.
2
There shall be disregarded from a claimant's net profit, any sum, where applicable, specified in paragraphs 1 to 14 of Schedule 4.
3
For the purposes of paragraph (1)(a) the net profit of the employment shall, except where paragraph (9) applies, be calculated by taking into account the earnings of the employment over the assessment period less—
a
subject to paragraphs (5) to (7), any expenses wholly and exclusively incurred in that period for the purposes of that employment;
b
an amount in respect of—
i
income tax; and
ii
F197national insurance contributions payable under the Act,
calculated in accordance with regulation 39 (deduction of tax and contributions for self-employed earners); and
c
one-half of the amount calculated in accordance with paragraph (11) in respect of any qualifying premium.
4
For the purposes of paragraph (1)(b) the net profit of the employment shall be calculated by taking into account the earnings of the employment over the assessment period less, subject to paragraphs (5) to (7), any expenses wholly and exclusively incurred in that period for the purposes of the employment.
5
Subject to paragraph (6), no deduction shall be made under paragraph (3)(a) or (4), in respect of—
a
any capital expenditure;
b
the depreciation of any capital asset;
c
any sum employed or intended to be employed in the setting up or expansion of the employment;
d
any loss incurred before the beginning of the assessment period;
e
the repayment of capital on any loan taken out for the purposes of the employment;
f
any expenses incurred in providing business entertainment; and
g
any debts, except bad debts proved to be such, but this sub-paragraph shall not apply to any expenses incurred in the recovery of a debt.
6
A deduction shall be made under paragraph (3)(a) or (4) in respect of the repayment of capital on any loan used for—
a
the replacement in the course of business of equipment or machinery; and
b
the repair of an existing business asset except to the extent that any sum is payable under an insurance policy for its repair.
7
The relevant authority shall refuse to make a deduction in respect of any expenses under paragraph (3)(a) or (4) where it is not satisfied given the nature and the amount of the expense that it has been reasonably incurred.
8
For the avoidance of doubt—
a
a deduction shall not be made under paragraph (3)(a) or (4) in respect of any sum unless it has been expended for the purposes of the business;
b
a deduction shall be made thereunder in respect of—
i
the excess of any value added tax paid over value added tax received in the assessment period;
ii
any income expended in the repair of an existing business asset except to the extent that any sum is payable under an insurance policy for its repair;
iii
any payment of interest on a loan taken out for the purposes of the employment.
9
Where a claimant is engaged in employment as a child minder the net profit of the employment shall be one-third of the earnings of that employment, less—
a
an amount in respect of—
i
income tax; and
ii
F8national insurance contributions payable under the Act,
calculated in accordance with regulation 39 (deduction of tax and contributions for self-employed earners); and
b
one-half of the amount calculated in accordance with paragraph (11) in respect of any qualifying premium.
10
For the avoidance of doubt where a claimant is engaged in employment as a self-employed earner and he is also engaged in one or more other employments as a self-employed or employed earner any loss incurred in any one of his employments shall not be offset against his earnings in any other of his employments.
11
The amount in respect of any qualifying premium shall be calculated by multiplying the daily amount of the qualifying premium by the number equal to the number of days in the assessment period; and for the purposes of this regulation the daily amount of the qualifying premium shall be determined—
a
where the qualifying premium is payable monthly, by multiplying the amount of the qualifying premium by 12 and dividing the product by 365;
b
in any other case, by dividing the amount of the qualifying premium by the number equal to the number of days in the period to which the qualifying premium relates.
12
In this regulation, “qualifying premium” means any premium which is payable periodically in respect of F121... a personal pension scheme and is so payable on or after the date of claim.
Deduction of tax and contributions of self-employed earners39
1
The amount to be deducted in respect of income tax under regulation 38(1)(b)(i), (3)(b)(i) or (9)(a)(i) (calculation of net profit of self-employed earners) shall be calculated on the basis of the amount of chargeable income and as if that income were assessable to income tax at F32... and the basic rateF53, or in the case of a Scottish taxpayer, the Scottish basic rate, of tax applicable to the assessment period less only the F39personal reliefs to which the claimant is entitled under Chapters 2, 3 and 3A of Part 3 of the Income Tax Act 2007 as are appropriate to his circumstances; but, if the assessment period is less than a year, the earnings to which the F95F149basic rateF106, or the Scottish basic rate, of tax is to be applied and the amount of the personal F196reliefs deductible under this paragraph shall be calculated on a pro rata basis.
2
The amount to be deducted in respect of F34national insurance contributions under regulation 38(1)(b)(i), (3)(b)(ii) or (9)(a)(ii) shall be the total of—
a
the amount of Class 2 contributions payable under section F8111(2) or, as the case may be, F10711(8) of the Act at the rate applicable to the assessment period except where the claimant's chargeable income is less than the amount specified in section 11(4) of the Act (F2small profits threshold) for the tax year applicable to the assessment period; but if the assessment period is less than a year, the amount specified for that tax year shall be reduced pro rata; and
b
the amount of Class 4 contributions (if any) which would be payable under section 15 of the Act (Class 4 contributions recoverable under the Income Tax Acts) at the percentage rate applicable to the assessment period on so much of the chargeable income as exceeds the lower limit but does not exceed the upper limit of profits and gains applicable for the tax year applicable to the assessment period; but if the assessment period is less than a year, those limits shall be reduced pro rata.
3
In this regulation “chargeable income” means—
a
except where sub-paragraph (b) applies, the earnings derived from the employment less any expenses deducted under paragraph (3)(a) or, as the case may be, (4) of regulation 38;
b
in the case of employment as a child minder, one third of the earnings of that employment.
SECTION 5Other income
Calculation of income other than earnings40
1
For the purposes of regulation 31 (average weekly income other than earnings), the income of a claimant which does not consist of earnings to be taken into account shall, subject to paragraphs (2) to (7) be his gross income and any capital treated as income under regulation 41 (capital treated as income).
2
There shall be disregarded from the calculation of a claimant's gross income under paragraph (1), any sum, where applicable, specified in Schedule 5.
F1053
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1054
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Where the payment of any benefit under the benefit Acts is subject to any deduction by way of recovery the amount to be taken into account under paragraph (1) shall be the gross amount payable.
F245A
Where the claimant or, where the claimant is a member of a couple, his partner is receiving a contributory employment and support allowance and that benefit has been reduced under regulation 63 of the Employment and Support Allowance Regulations F54or section 11J of the Welfare Reform Act the amount of that benefit to be taken into account is the amount as if it had not been reduced.
6
Where an award of any working tax credit or child tax credit under the Tax Credits Act is subject to a deduction by way of recovery of an overpayment of working tax credit or child tax credit which arose in a previous tax year the amount to be taken into account under paragraph (1) shall be the amount of working tax credit or child tax credit awarded less the amount of that deduction.
7
F26Paragraphs (8) and (8A) apply where—
a
a relevant payment has been made to a person in an academic year; and
b
that person abandons, or is dismissed from, his course of study before the payment to him of the final instalment of the relevant payment.
8
F10Where a relevant payment is made quarterly, the amount of a relevant payment to be taken into account for the assessment period for the purposes of paragraph (1) in respect of a person to whom paragraph (7) applies, shall be calculated by applying the formula—
where—
A= the total amount of the relevant payment which that person would have received had he remained a student until the last day of the academic term in which he abandoned, or was dismissed from, his course, less any deduction under regulation 64(5);
B= the number of benefit weeks from the benefit week immediately following that which includes the first day of that academic year to the benefit week which includes the day on which the person abandoned, or was dismissed from, his course;
C= the weekly amount of the relevant payment, before the application of the £10 disregard, which would have been taken into account as income under regulation 64(2) had the person not abandoned or been dismissed from, his course and, in the case of a person who was not entitled to housing benefit immediately before he abandoned or was dismissed from his course, had that person, at that time, been entitled to housing benefit;
D= the number of benefit weeks in the assessment period.
F1788A
Where a relevant payment is made by two or more instalments in a quarter, the amount of a relevant payment to be taken into account for the assessment period for the purposes of paragraph (1) in respect of a person to whom paragraph (7) applies, shall be calculated by applying the formula in paragraph (8) but as if—
- A
the total amount of relevant payments which that person received, or would have received, from the first day of the academic year to the day the person abandoned the course, or was dismissed from it, less any deduction under regulation 64(5).
9
F177In this regulation—
“academic year” and “student loan” shall have the same meanings as for the purposes of Part 7;
F165“assessment period” means—
- a
in a case where a relevant payment is made quarterly, the period beginning with the benefit week which includes the day on which the person abandoned, or was dismissed from, his course and ending with the benefit week which includes the last day of the last quarter for which an instalment of the relevant payment was payable to that person;
- b
in a case where the relevant payment is made by two or more instalments in a quarter, the period beginning with the benefit week which includes the day on which the person abandoned, or was dismissed from, his course and ending with the benefit week which includes—
- i
the day immediately before the day on which the next instalment of the relevant payment would have been due had the payments continued; or
- ii
the last day of the last quarter for which an instalment of the relevant payment was payable to that person,
whichever of those dates is earlier;
- i
- a
F180“quarter” in relation to an assessment period means a period in that year beginning on—
- a
1st January and ending on 31st March;
- b
1st April and ending on 30th June;
- c
1st July and ending on 31st August; or
- d
1st September and ending on 31st December;
- a
“relevant payment” means either a student loan or an amount intended for the maintenance of dependants referred to in regulation 59(7) or both.
10
For the avoidance of doubt there shall be included as income to be taken into account under paragraph (1)—
a
any payment to which regulation 35(2) (payments not earnings) applies; or
b
in the case of a claimant who is receiving support under section 95 or 98 of the Immigration and Asylum Act including support provided by virtue of regulations made under Schedule 9 to that Act, the amount of such support provided in respect of essential living needs of the claimant and his dependants (if any) as is specified in regulations made under paragraph 3 of Schedule 8 to the Immigration and Asylum Act.
Capital treated as income41
1
Any capital payable by instalments which are outstanding at the date on which the claim is made or treated as made, or, at the date of any subsequent revision or supersession, shall, if the aggregate of the instalments outstanding and the amount of the claimant's capital otherwise calculated in accordance with Section 6 exceeds £16,000, be treated as income.
2
Any payment received under an annuity shall be treated as income.
3
Any earnings to the extent that they are not a payment of income shall be treated as income.
4
Any Career Development Loan paid pursuant to section 2 of the 1973 Act shall be treated as income.
5
Where an agreement or court order provides that payments shall be made to the claimant in consequence of any personal injury to the claimant and that such payments are to be made, wholly or partly, by way of periodic payments, any such periodic payments received by the claimant (but not a payment which is treated as capital by virtue of this Part), shall be treated as income.
Notional income42
1
A claimant shall be treated as possessing income of which he has deprived himself for the purpose of securing entitlement to housing benefit or increasing the amount of that benefit.
2
Except in the case of—
a
a discretionary trust;
b
a trust derived from a payment made in consequence of a personal injury;
c
F186d
any sum to which paragraph 45(2)(a) of Schedule 6 (capital to be disregarded) applies which is administered in the way referred to in paragraph 45(1)(a);
F186da
any sum to which paragraph 46(a) of Schedule 6 refers;
e
rehabilitation allowance made under section 2 of the 1973 Act;
f
child tax credit; or
g
working tax credit,
F25h
any sum to which paragraph (12A) applies;
any 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 the claimant but only from the date on which it could be expected to be acquired were an application made.
F1943
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1943A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1944
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1945
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
Any payment of income, other than a payment of income specified in F108paragraph (7) or (7A), made—
a
to a third party in respect of a single claimant or a member of the family (but not a member of the third party's family) shall, where that payment is a payment of an occupational pension F167, a pension or other periodical payment made under a personal pension scheme or a payment made by the Board of the Pension Protection Fund, be treated as possessed by that single claimant or, as the case may be, by that member;
b
to a third party in respect of a single claimant or in respect of a member of the family (but not a member of the third party's family) shall, where it is not a payment referred to in sub-paragraph (a), be treated as possessed by that single claimant or by that member to the extent that it is used for the food, household fuel or, subject to paragraph (13), rent or ordinary clothing or footwear, of that single claimant or, as the case may be, of any member of that family or is used for any council tax or water charges for which that claimant or member is liable;
c
to a single claimant or a member of the family in respect of a third party (but not in respect of another member of that 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.
C27
Paragraph (6) shall not apply in respect of a payment of income made—
a
under F56or by the Macfarlane Trust, the Macfarlane (Special Payments) Trust, the Macfarlane (Special Payments) (No. 2) Trust, the Fund, the Eileen Trust F137, MFET LimitedF72, the Skipton Fund, the Caxton FoundationF43, the Scottish Infected Blood Support SchemeF184, an approved blood schemeF141, the London Emergencies Trust, the We Love Manchester Emergency FundF123, the National Emergencies Trust or the Independent Living F28Fund (2006);
b
pursuant to section 19(1)(a) of the Coal Industry Act 1994 M15 (concessionary coal);
c
pursuant to section 2 of the 1973 Act in respect of a person's participation—
i
in an employment programme specified in regulation 75(1)(a)(ii) of the Jobseeker's Allowance Regulations;
ii
in a training scheme specified in regulation 75(1)(b)(ii) of those Regulations;
iii
iv
in a qualifying course within the meaning specified in regulation 17A(7) of those Regulations F74; or
v
in the Flexible New Deal specified in regulation 75(1)(a)(v) of those Regulations;
F90cb
in respect of a person's participation in the Mandatory Work Activity Scheme;
F16cc
in respect of a claimant's participation in a scheme prescribed in regulation 3 of the Jobseeker's Allowance (Schemes for Assisting Persons to Obtain Employment) Regulations 2013;
F142cd
in respect of a person’s participation in a scheme prescribed in regulation 3 of the Jobseeker’s Allowance (Supervised Jobsearch Pilot Scheme) Regulations 2014;
F47ce
in respect of a person’s participation in a scheme prescribed in regulation 3 of the Jobseekers Allowance (18 - 21 Work Skills Pilot Scheme) Regulations 2014;
d
under an occupational pension scheme F99, in respect of a pension or other periodical payment made under a personal pension scheme or a payment made by the Board of the Pension Protection Fund 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 1980M16;
ii
the payment is made to the trustee in bankruptcy or any other person acting on behalf of the creditors; and
iii
the person referred to in (i) and any member of his family does not possess, or is not treated as possessing, any other income apart from that payment.
F67A
Paragraph (6) shall not apply in respect of F9any of the following payments of income—
a
a Grenfell Tower payment;
b
a child abuse payment;
c
a Windrush payment.
8
Where a claimant is in receipt of any benefit (other than housing benefit) under the benefit Acts and the rate of that benefit is altered with effect from a date on or after 1st April in any year but not more than 14 days thereafter, the relevant authority shall treat the claimant as possessing such benefit at the altered rate—
a
in a case in which the claimant's weekly amount of eligible rent falls to be calculated in accordance with regulation 80(2)(b) F172or (c) (calculation of weekly amounts), from 1st April in that year;
b
in any other case, from the first Monday in April in that year,
to the date on which the altered rate is to take effect.
9
Subject to paragraph (10), 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 relevant authority shall treat the claimant as possessing such earnings (if any) as is reasonable for that employment unless the claimant satisfies the authority that the means of that person are insufficient for him to pay or to pay more for the service.
10
Paragraph (9) shall not apply—
a
to a claimant who is engaged by a charitable or voluntary organisation or who is a volunteer if the relevant authority is satisfied in any of those cases that it is reasonable for him to provide those services free of charge; or
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) of the Jobseeker's Allowance Regulations, other than where the service is performed in connection with the claimant's participation in the Intense Activity Period specified in regulation 75(1)(a)(iv) of those RegulationsF113...; or
ii
the claimant's or the claimant's partner's participation in an employment or training programme as defined in regulation 19(3) of those Regulations 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 F62; or
c
to a claimant who is participating in a work placement approved by the Secretary of State (or a person providing services to the Secretary of State) before the placement starts.
10A
In paragraph (10)(c) “work placement” means practical work experience which is not undertaken in expectation of payment.
11
Where a claimant is treated as possessing any income under any of paragraphs (1) to (8), 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.
12
Where a claimant is treated as possessing any earnings under paragraph (9) 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 (3) of regulation 36 (calculation of net earnings of employed earners) shall not apply and his net earnings shall be calculated by taking into account those 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 F154... and the basic rate F83, or in the case of a Scottish taxpayer, the Scottish basic rate, of tax applicable to the assessment period less only the F82personal reliefs to which the claimant is entitled under Chapters 2, 3 and 3A of Part 3 of the Income Tax Act 2007 as are appropriate to his circumstances; but, if the assessment period is less than a year, the earnings to which the F131basicF133rate F168, or the Scottish basic rate, of tax is to be applied and the amount of the personal F70reliefs deductible under this sub-paragraph shall be calculated on a pro rata basis;
b
an amount equivalent to the amount of the primary Class 1 contributions that would be payable by him under the Act in respect of those earnings if such contributions were payable; and
c
one-half of any sum payable by the claimant by way of a contribution towards an occupational or personal pension scheme.
F1212A
Paragraphs (1), (2), (6) and (9) shall not apply in respect of any amount of income other than earnings, or earnings of an employed earner, arising out of the F170claimant participating as a service user.
13
In paragraph (6) “rent” means eligible rent less any deductions in respect of non-dependants which fall to be made under regulation 74 (non-dependant deductions).
SECTION 6Capital
Capital limit43
For the purposes of section 134(1) of the Act as it applies to housing benefit (no entitlement to benefit if capital exceeds prescribed amount), the prescribed amount is £16,000.
Calculation of capital44
1
For the purposes of Part 7 of the Act (income-related benefits) as it applies to housing benefit, the capital of a claimant to be taken into account shall, subject to paragraph (2), be the whole of his capital calculated in accordance with this Part and any income treated as capital under regulation 46 (income treated as capital).
2
There shall be disregarded from the calculation of a claimant's capital under paragraph (1), any capital, where applicable, specified in Schedule 6.
Disregard of capital of child and young person45
The capital of a child or young person who is a member of the claimant's family shall not be treated as capital of the claimant.
Income treated as capital46
1
Any bounty derived from employment to which paragraph 8 of Schedule 4 applies and paid at intervals of at least one year shall be treated as capital.
2
Any amount by way of a refund of income tax deducted from profits or emoluments chargeable to income tax under Schedule D or E shall be treated as capital.
3
Any holiday pay which is not earnings under regulation 35(1)(d) (earnings of employed earners) shall be treated as capital.
4
Except any income derived from capital disregarded under paragraphs 1, 2, 4, 8, 14 F1, 25 to 28, 45 or 46 of Schedule 6, any income derived from capital shall be treated as capital but only from the date it is normally due to be credited to the claimant's account.
5
In the case of employment as an employed earner, any advance of earnings or any loan made by the claimant's employer shall be treated as capital.
6
Any charitable or voluntary payment which is not made or due to be made at regular intervals, F4other than a Grenfell Tower paymentF46, a child abuse payment, a Windrush payment or a payment which is made under F166or by the Macfarlane Trust, the Macfarlane (Special Payments) Trust, the Macfarlane (Special Payments) (No. 2) Trust, the Fund, the Eileen TrustF138, MFET LimitedF92, the Skipton Fund, the Caxton FoundationF88, the Scottish Infected Blood Support SchemeF192, an approved blood schemeF96, the London Emergencies Trust, the We Love Manchester Emergency FundF129, the National Emergencies Trust or the Independent Living F102Fund (2006), shall be treated as capital.
7
There shall be treated as capital the gross receipts of any commercial activity carried on by a person in respect of which assistance is received under the self-employment route, but only in so far as those receipts were payable into a special account F150... during the period in which that person was receiving such assistance.
8
Any arrears of subsistence allowance which are paid to a claimant as a lump sum shall be treated as capital.
9
Any arrears of working tax credit or child tax credit shall be treated as capital.
Calculation of capital in the United KingdomF16047
Capital which a claimant possesses in the United Kingdom shall be calculated at its current market or surrender value less—
a
where there would be expenses attributable to the sale, 10 per cent; and
b
the amount of any encumbrance secured on it.
Calculation of capital outside the United Kingdom48
Capital which a claimant possesses in a country outside the United Kingdom shall be calculated—
a
in a case where there is no prohibition in that country against the transfer to the United Kingdom of an amount equal to its current market or surrender value in that country, at that value;
b
in a case where there is such a prohibition, at the price which it would realise if sold in the United Kingdom to a willing buyer,
less, where there would be expenses attributable to sale, 10 per cent. and the amount of any encumbrances secured on it.
Notional capital49
1
A claimant shall be treated as possessing capital of which he has deprived himself for the purpose of securing entitlement to housing benefit or increasing the amount of that benefit except to the extent that that capital is reduced in accordance with regulation 50 (diminishing notional capital rule).
2
Except in the case of—
a
a discretionary trust; or
b
a trust derived from a payment made in consequence of a personal injury; or
c
any loan which would be obtained only if secured against capital disregarded under Schedule 6; or
d
F191e
any sum to which paragraph 45(2)(a) of Schedule 6 (capital to be disregarded) applies which is administered in the way referred to in paragraph 45(1)(a); or
F191ea
any sum to which paragraph 46(a) of Schedule 6 refers; or
f
child tax credit; or
g
working tax credit,
any capital 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.
3
Any payment of capital, other than a payment of capital specified in F30paragraph (4) or (4A), made—
a
to a third party in respect of a single claimant or a member of the family (but not a member of the third party's family) shall, where that payment is a payment of an occupational pension F97, a pension or other periodical payment made under a personal pension scheme or a payment made by the Board of the Pension Protection Fund, be treated as possessed by that single claimant or, as the case may be, by that member;
b
to a third party in respect of a single claimant or in respect of a member of the family (but not a member of the third party's family) shall, where it is not a payment referred to in sub-paragraph (a), be treated as possessed by that single claimant or by that member to the extent that it is used for the food, household fuel or, subject to paragraph (8), rent or ordinary clothing or footwear, of that single claimant or, as the case may be, of any member of that family or is used for any council tax or water charges for which that claimant or member is liable;
c
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.
C14
Paragraph (3) shall not apply in respect of a payment of capital made—
a
under F73or by the Macfarlane Trust, the Macfarlane (Special Payments) Trust, the Macfarlane (Special Payments) (No. 2) Trust, the Fund, the Eileen Trust F104, MFET Limited, the Independent Living F147Fund (2006), the Skipton Fund F117, the Caxton FoundationF79, the Scottish Infected Blood Support SchemeF63, an approved blood schemeF37, the London Emergencies Trust, the We Love Manchester Emergency FundF183, the National Emergencies Trust or the London Bombings Relief Charitable Fund;
b
pursuant to section 2 of the 1973 Act in respect of a person's participation—
i
in an employment programme specified in regulation 75(1)(a)(ii) of the Jobseeker's Allowance Regulations;
ii
in a training scheme specified in regulation 75(1)(b)(ii) of those Regulations;
iii
iv
in a qualifying course within the meaning specified in regulation 17A(7) of those Regulations F145; or
v
in the Flexible New Deal specified in regulation 75(1)(a)(v) of those Regulations;
F48bb
in respect of a person's participation in the Mandatory Work Activity Scheme;
F65bc
in respect of a claimant's participation in a scheme prescribed in regulation 3 of the Jobseeker's Allowance (Schemes for Assisting Persons to Obtain Employment) Regulations 2013;
F71bd
in respect of a person’s participation in a scheme prescribed in regulation 3 of the Jobseeker’s Allowance (Supervised Jobsearch Pilot Scheme) Regulations 2014;
F86be
in respect of a person’s participation in a scheme prescribed in regulation 3 of the Jobseekers Allowance (18 - 21 Work Skills Pilot Scheme) Regulations 2014;
c
under an occupational pension schemeF189, in respect of a pension or other periodical payment made under a personal pension scheme or a payment made by the Board of the Pension Protection Fund 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 M17;
ii
the payment is made to the trustee in bankruptcy or any other person acting on behalf of the creditors; and
iii
the person referred to in (i) and any member of his family does not possess, or is not treated as possessing, any other income apart from that payment.
F1014A
Paragraph (3) shall not apply in respect of a payment of capital which is a Grenfell Tower payment F59any of the following payments of capital—
F59a
a Grenfell Tower payment;
b
a child abuse payment;
c
a Windrush payment.
5
Where a claimant stands in relation to a company in a position analogous to that of a sole owner or partner in the business of that company, he may be treated as if he were such sole owner or partner and in such a case—
a
the value of his holding in that company shall, notwithstanding regulation 44 (calculation of capital) be disregarded; and
b
he shall, subject to paragraph (6), be treated as possessing an amount of capital equal to the value or, as the case may be, his share of the value of the capital of that company and the foregoing provisions of this Section shall apply for the purposes of calculating that amount as if it were actual capital which he does possess.
6
For so long as the claimant undertakes activities in the course of the business of the company, the amount which he is treated as possessing under paragraph (5) shall be disregarded.
7
Where a claimant is treated as possessing capital under any of paragraphs (1) to (3) the foregoing provisions of this Section shall apply for the purposes of calculating its amount as if it were actual capital which he does possess.
8
In paragraph (3) “rent” means eligible rent less any deductions in respect of non-dependants which fall to be made under regulation 74 (non-dependant deductions).
Diminishing notional capital rule50
1
Where a claimant is treated as possessing capital under regulation 49(1) (notional capital), the amount which he is treated as possessing—
a
in the case of a week that is subsequent to—
i
the relevant week in respect of which the conditions set out in paragraph (2) are satisfied; or
ii
a week which follows that relevant week and which satisfies those conditions,
shall be reduced by an amount determined under paragraph (3);
b
in the case of a week in respect of which paragraph (1)(a) does not apply but where—
i
that week is a week subsequent to the relevant week; and
ii
that relevant week is a week in which the condition in paragraph (4) is satisfied,
shall be reduced by the amount determined under paragraph (4).
2
This paragraph applies to a benefit week where the claimant satisfies the conditions that—
a
he is in receipt of housing benefit; and
b
but for regulation 49(1), he would have received an additional amount of housing benefit in that week.
3
In a case to which paragraph (2) applies, the amount of the reduction for the purposes of paragraph (1)(a) shall be equal to the aggregate of—
a
the additional amount to which sub-paragraph (2)(b) refers;
b
where the claimant has also claimed council tax benefit, the amount of any council tax benefit or any additional amount of council tax benefit to which he would have been entitled in respect of the benefit week to which paragraph (2) refers but for the application of regulation 39(1) of the Council Tax Benefit Regulations 2006 (notional capital);
c
d
where the claimant has also claimed a jobseeker's allowance, the amount of an income-based jobseeker's allowance to which he would have been entitled in respect of the benefit week to which paragraph (2) refers but for the application of regulation 113 of the Jobseeker's Allowance Regulations (notional capital); F116and
e
where the claimant has also claimed an employment and support allowance, the amount of an income-related employment and support allowance to which he would have been entitled in respect of the benefit week to which paragraph (2) refers but for the application of regulation 115 of the Employment and Support Allowance Regulations (notional capital).
4
Subject to paragraph (5), for the purposes of paragraph (1)(b) the condition is that the claimant would have been entitled to housing benefit in the relevant week but for regulation 49(1), and in such a case the amount of the reduction shall be equal to the aggregate of—
a
the amount of housing benefit to which the claimant would have been entitled in the relevant week but for regulation 49(1) and, for the purposes of this sub-paragraph, if the relevant week is a week to which F190regulation 80(3)(a) refers (calculation of weekly amounts), that amount shall be determined by dividing the amount of housing benefit to which he would have been so entitled by the number of days in that week for which he was liable to make payments in respect of the dwelling he occupies as his home and multiplying the quotient so obtained by 7;
b
if the claimant would, but for regulation 39(1) of the Council Tax Benefit Regulations 2006, have been entitled to council tax benefit or to an additional amount of council tax benefit in respect of the benefit week which includes the last day of the relevant week, the amount which is equal to—
i
in a case where no council tax benefit is payable, the amount to which he would have been entitled; or
ii
in any other case, the amount equal to the additional amount of council tax benefit to which he would have been entitled;
and, for the purposes of this sub-paragraph, if the amount is in respect of a part-week, that amount shall be determined by dividing the amount of the council tax benefit to which he would have been so entitled by the number equal to the number of days in the part-week and multiplying the quotient so obtained by 7;
c
if the claimant would, but for regulation 51(1) of the Income Support Regulations, have been entitled to income support in respect of the benefit week, within the meaning of regulation 2(1) of those Regulations (interpretation), which includes the last day of the relevant week, the amount to which he would have been entitled and, for the purposes of this sub-paragraph, if the amount is in respect of a part-week, that amount shall be determined by dividing the amount of the income support to which he would have been so entitled by the number equal to the number of days in the part-week and multiplying the quotient so obtained by 7;
d
if the claimant would, but for regulation 113 of the Jobseeker's Allowance Regulations, have been entitled to an income-based jobseeker's allowance in respect of the benefit week, within the meaning of regulation 1(3) of those Regulations (interpretation), which includes the last day of the relevant week, the amount to which he would have been entitled and, for the purposes of this sub-paragraph, if the amount is in respect of a part-week, that amount shall be determined by dividing the amount of the income-based jobseeker's allowance to which he would have been so entitled by the number equal to the number of days in the part-week and multiplying the quotient so obtained by 7.
F195e
if the claimant would, but for regulation 115 of the Employment and Support Allowance Regulations, have been entitled to an income-related employment and support allowance in respect of the benefit week, within the meaning of regulation 2(1) of those Regulations (interpretation), which includes the last day of the relevant week, the amount to which he would have been entitled and, for the purposes of this sub-paragraph, if the amount is in respect of a part-week, that amount must be determined by dividing the amount of the income-related employment and support allowance to which he would have been so entitled by the number equal to the number of days in that part-week and multiplying the quotient so obtained by 7.
5
The amount determined under paragraph (4) shall be re-determined under that paragraph if the claimant makes a further claim for housing benefit and the conditions in paragraph (6) are satisfied, and in such a case—
a
sub-paragraphs (a) to (d) of paragraph (4) shall apply as if for the words “relevant week” there were substituted the words “relevant subsequent week”; and
b
subject to paragraph (7), the amount as re-determined shall have effect from the first week following the relevant subsequent week in question.
6
The conditions are that—
a
a further claim is made 26 or more weeks after—
i
the date on which the claimant made a claim for housing benefit in respect of which he was first treated as possessing the capital in question under regulation 49(1);
ii
in a case where there has been at least one redetermination in accordance with paragraph (5), the date on which he last made a claim for housing benefit which resulted in the weekly amount being re-determined; or
iii
the date on which he last ceased to be entitled to housing benefit,
whichever last occurred; and
b
the claimant would have been entitled to housing benefit but for regulation 49(1).
7
The amount as re-determined pursuant to paragraph (5) shall not have effect if it is less than the amount which applied in that case immediately before the redetermination and in such a case the higher amount shall continue to have effect.
8
For the purposes of this regulation—
a
“part-week” in paragraph (4)(b) means a period of less than a week for which council tax benefit is allowed;
b
“part-week” in paragraph (4)(c)F163, (d) and (e) means—
i
a period of less than a week which is the whole period for which income supportF130, an income-related employment and support allowance, or, as the case may be, an income-based jobseeker's allowance, is payable; and
ii
any other period of less than a week for which it is payable;
c
“relevant week” means the benefit week in which the capital in question of which the claimant has deprived himself within the meaning of regulation 49(1)—
i
was first taken into account for the purpose of determining his entitlement to housing benefit; or
ii
was taken into account on a subsequent occasion for the purpose of determining or re-determining his entitlement to housing benefit on that subsequent occasion and that determination or redetermination resulted in his beginning to receive, or ceasing to receive, housing benefit;
and where more than one benefit week is identified by reference to heads (i) and (ii) of this sub-paragraph the later or latest such benefit week;
d
“relevant subsequent week” means the benefit week which includes the day on which the further claim or, if more than one further claim has been made, the last such claim was made.
Capital jointly held51
Except where a claimant possesses capital which is disregarded under regulation 49(5) (notional capital) where a claimant and one or more persons are beneficially entitled in possession to any capital asset they shall be treated as if each of them were entitled in possession to the whole beneficial interest therein in an equal share and the foregoing provisions of this Section shall apply for the purposes of calculating the amount of capital which the claimant is treated as possessing as if it were actual capital which the claimant does possess.
Calculation of tariff income from capital52
1
Except where the circumstances prescribed in paragraph F169... (4) apply to the claimant, where the claimant's capital calculated in accordance with this Part exceeds F45£6,000 it shall be treated as equivalent to a weekly tariff income of £1 for each complete £250 in excess of F45£6,000 but not exceeding £16,000.
F642
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
Where the circumstances prescribed in paragraph (4) apply to a claimant and that claimant's capital calculated in accordance with this Part exceeds £10,000, it shall be treated as equivalent to a weekly tariff income of £1 for each complete £250 in excess of £10,000 but not exceeding £16,000.
4
For the purposes of paragraph (3), the prescribed circumstances are that the claimant—
a
occupies residential accommodation as his home; or
b
is a person—
i
to whom on 3rd October 2005 paragraph (2) of regulation 7 of the former regulations M19 as in force on that date applied; or
ii
to whom on 3rd October 2005, paragraph (5) or paragraph (7) of regulation 7 of those Regulations as in force on that date applied and continues to apply;
5
For the purposes of paragraph (4), the claimant shall be treated as—
a
occupying residential accommodation as his home; or
b
a person to whom regulation 9(1A) as inserted by paragraph 9(3)(a) of Schedule 3 to the Consequential Provisions Regulations, applies; or
c
a person to whom regulation 9(6) as inserted by paragraph 9(5)(a) of Schedule 3 to the Consequential Provisions Regulations, applies; or
d
a person to whom regulation 9(6) as inserted by paragraph 9(7)(a) of Schedule 3 to the Consequential Provisions Regulations, applies,
in any period during which he is treated as occupying the accommodation as his home pursuant to regulation 7(12), (13) or (17).
6
Notwithstanding paragraphs (1) F23... and (3) where any part of the excess is not a complete £250 that part shall be treated as equivalent to a weekly tariff income of £1.
7
For the purposes of paragraphs (1) F23... and (3), capital includes any income treated as capital under regulation 46 (income treated as capital).
8
For the purposes of this regulation and subject to paragraph (9), “residential accommodation” means accommodation which is provided by an establishment—
a
under sections 21 to 24 of the National Assistance Act 1948 M20 (provision of accommodation) F125or under Part 1 of the Care Act 2014 (care and support) or under section 59 of the Social Work (Scotland) Act 1968 M21 (provision of residential and other establishments) F3or under section 35 or 36 of the Social Services and Well-being (Wales) Act 2014 (duty and power to meet care and support needs of an adult) where board is not available to the claimant and the home in which the accommodation is provided is either owned or managed or owned and managed by a local authority;
b
which is managed or provided by a body incorporated by Royal Charter or constituted by Act of Parliament (other than a social services authority) and provides both board and personal care for the claimant; and in this sub-paragraph, “personal care” means care which includes assistance with bodily functions where such assistance is required;
c
which is an Abbeyfield Home,
and in this definition, “board” refers to the availability to the claimant in the home in which his accommodation is provided of cooked or prepared food, where the food is made available to him in consequence solely of his paying the charge for the accommodation or any other charge which he is required to pay as a condition of occupying the accommodation, or both those charges and is made available for his consumption without any further charge to him.
9
Paragraph (8) shall not apply to residential accommodation of the type referred to in sub-paragraphs (a) to (c) of paragraph (8) where such accommodation is residential accommodation for the purpose of regulation 9 unless the claimant is a person to whom paragraphs 10, 11 or 12 of Schedule 3 to the Social Security (Care Homes and Independent Hospitals) Regulations 2005 apply M22.