The Social Security Benefit (Computation of Earnings) (Amendment) Regulations 2016

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations amend the Social Security Benefit (Computation of Earnings) Regulations 1996 (S.I. 1996/2745).

The 1996 Regulations make provision for the calculation or estimation of income so as to enable the Secretary of State to determine the amount of benefit a claimant should be awarded. Broadly, the income of a self-employed claimant is calculated by determining the claimant’s net profit over a representative period and then deducting (amongst other liabilities) an amount in respect of income tax, based on the basic rate of tax applicable to that period.

Regulations 2(2) to (4) of these Regulations amend the provisions relating to calculation or estimation of income in consequence of the power of the Scottish Parliament to set a Scottish rate of income tax provided for in Part 4A of the Scotland Act 1998 (c. 46). The power is first being exercised for the tax year 2016-2017.

Paragraph (2) introduces definitions of a “Scottish taxpayer” and the “Scottish basic rate” of tax and paragraphs (3) and (4) add references to the “Scottish basic rate” of tax to the existing references to the basic rate of tax and update references to “personal reliefs” so as to refer to the relevant provisions of the Income Tax Act 2007 (c. 3).

Regulation 2(3)(a) omits regulation 4(2) of the 1996 Regulations, which is no longer relevant.

Paragraph (5) amends paragraph 6 of Schedule 1 to the 1996 Regulations, which enables a payment to be disregarded in the calculation of earnings if it is made by a local authority in relation to a child being looked after by the authority, so as to include a reference to the provisions under which such payments are made in the Social Services and Well-being (Wales) Act 2014 (anaw 4).

An impact assessment has not been produced for this instrument as it has no impact on business or civil society organisations.