PART 10Income and earnings

Earnings of employed earners80

1

Subject to paragraphs (2) and (3), “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 the claimant's employment by reason of redundancy;

c

any payment in lieu of notice;

d

any holiday pay except any payable more than four weeks after the termination or interruption of 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 the claimant's home and place of employment;

ii

expenses incurred by the claimant under arrangements made for the care of a member of the claimant's 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 (the remedies: orders and compensation, enforcement of order and compensation) M1;

h

any payment made or remuneration paid under F4section 28, 34, 64, 68 F4or 70 of the Employment Rights Act 1996 (right to guarantee payments, remuneration on suspension on medical or maternity grounds, complaints to employment tribunals) M2;

i

any such sum as is referred to in section 112(3) of the Contributions and Benefits Act (certain sums to be earnings for social security purposes)M3;

j

where a payment of compensation is made in respect of employment which is part-time employment, the amount of the compensation;

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 M4.

2

“Earnings” are not to include—

a

subject to paragraph (3), any payment in kind;

b

any remuneration paid by or on behalf of an employer to the claimant in respect of a period throughout which the claimant is on maternity leave, paternity leave F9, adoption leave (which means a period of absence from work on ordinary or additional adoption leave under section 75A or 75B of the Employment Rights Act 1996 M5)F2, shared parental leave under section 75E or 75G of that ActF8, parental bereavement leave under section 80EA of that Act or is absent from work because the claimant is ill;

c

any payment in respect of expenses wholly, exclusively and necessarily incurred in the performance of the duties of the employment;

d

any occupational pension (which means any pension or other periodical payment under an occupational pension scheme but does not include any discretionary payment out of a fund established for relieving hardship in particular cases);

e

any lump sum payment made under the Iron and Steel Re-adaptation Benefits Scheme M6;

f

any payment in respect of expenses arising out of the claimant participating as a service user.

F5g

any bounty paid at intervals of at least one year and derived from employment as—

i

a part-time fire-fighter in a fire brigade maintained in pursuance of the Fire and Rescue Services Act 2004;

ii

a part-time fire-fighter employed by a fire and rescue authority under that Act;

iii

a part-time fire-fighter employed by the Scottish Fire and Rescue Service established under section 1A of the Fire (Scotland) Act 2005;

iv

an auxiliary coastguard in respect of coast rescue activities;

v

a person engaged part-time in the manning or launching of a lifeboat;

vi

a member of any territorial or reserve force prescribed in Part 1 of Schedule 6 to the Social Security (Contributions) Regulations 2001.

3

Paragraph (2)(a) is not to apply in respect of any non-cash voucher referred to in paragraph (1)(k).

4

In this regulation—

  • “compensation” means any payment made in respect of, or on the termination of, employment in a case where a claimant has not received or received only part of a payment in lieu of notice due or which would have been due to the claimant had that claimant not waived the right to receive it, other than—

    1. a

      any payment specified in paragraph (1)(a) to (i);

    2. b

      any payment specified in paragraph (2)(a) to (f);

    3. c

      any redundancy payment within the meaning of section 135(1) of the Employment Rights Act 1996;

    4. d

      any refund of contributions to which that person was entitled under an occupational pension scheme; and

    5. e

      any compensation payable by virtue of section 173 of the Education Reform Act 1988 M7;

  • “paternity leave” means a period of absence from work on F3... paternity leave by virtue of section 80A or 80B of the Employment Rights Act 1996 M8F7....

5

The reference in paragraph (2)(f) to a person participating as a service user is to—

a

a person who is being consulted by or on behalf of—

i

a body which has a statutory duty to provide services in the field of health, social care or social housing; or

ii

a body which conducts research or undertakes monitoring for the purpose of planning or improving such services,

in the person's capacity as a user, potential user, carer of a user or person otherwise affected by the provision of those services; or

F6ab

a person who is being consulted by or on behalf of—

i

the Secretary of State in relation to any of the Secretary of State’s functions in the field of social security or child support or under section 2 of the Employment and Training Act 1973; or

ii

a body which conducts research or undertakes monitoring for the purpose of planning or improving such functions,

in their capacity as a person affected or potentially affected by the exercise of those functions or the carer of such a person;

b

the carer of a person consulted under F1sub-paragraphs (a) or (ab).