The Employment and Support Allowance Regulations (Northern Ireland) 2016

• “work as a councillor” includes any work which a claimant undertakes as a member of a district council or any body of which the claimant is a member by reason of being a councillor.

Claimants who are treated as not entitled to any allowance at all by reason of regulation 37(1) are to be treated as not having limited capability for work

38

• (1) Where a claimant is treated as not entitled to an employment and support allowance by reason of regulation 37(1), the claimant is to be treated as not having limited capability for work.

• (2) Paragraph (1) applies even if—

• (a) it has been determined that the claimant has or is to be treated as having, under any of regulations 16 (certain claimants to be treated as having limited capability for work), 21 (hospital patients), 22 (claimants receiving certain treatment) and 25 (exceptional circumstances), limited capability for work; or

• (b) the claimant meets the conditions set out in regulation 26(2) for being treated as having limited capability for work until a determination is made in accordance with the limited capability for work assessment.

Exempt work

39

• (1) the categories of work referred to in regulation 37(2)(f) are—

• (a) work for which the total earnings in any week does not exceed £20;

• (b) work for which the total earnings in any week does not exceed 16 times the national living wage, subject to paragraph (4), and which—

• (i) is part of the claimant’s treatment programme and is done under medical supervision while the claimant is an in-patient, or is regularly attending as an out-patient, of a hospital or similar institution, or

• (ii) is supervised by a person employed by a public authority or by a voluntary organisation or community interest company engaged in the provision or procurement of work for persons who have disabilities;

• (c) work which is done for less than 16 hours a week, for which total earnings in any week does not exceed 16 times the national living wage, subject to paragraph (4)...;

• (d) work done in the course of receiving assistance in pursuing self-employed earner’s employment whilst participating in a programme provided, or in other arrangements made, under section 1 of the Employment and Training Act⁵⁰;

• (e) work done where the claimant receives no payment of earnings and where the claimant is—

• (i) engaged by a charity or voluntary organisation, or

• (ii) a volunteer,

and where the Department is satisfied in either of those cases that it is reasonable for the claimant to do the work free of charge;

• (f) work done in the course of participating in a work placement approved in writing by the Department for Employment and Learning (or a person providing services to that Department) before the placement starts.

• (2) The number of hours for which a claimant is engaged in work is to be determined—

• (a) where no recognisable cycle has been established in respect of a claimant’s work, by reference to the number of hours or, where those hours are likely to fluctuate, the average of the hours, which the claimant is expected to work in a week;

• (b) where the number of hours for which the claimant is engaged fluctuate, by reference to the average of hours worked over—

• (i) if there is a recognisable cycle of work, the period of one complete cycle (including, where the cycle involves periods in which the claimant does no work, those periods but disregarding any other absences),

• (ii) in any other case, the period of 5 weeks immediately before the date of claim or the date on which a superseding decision is made under Article 11 of the 1998 Order⁵¹ (decisions superseding earlier decisions), or such other length of time as may, in the particular case, enable the claimant’s average hours of work to be determined more accurately.

• (3) For the purposes of determining the number of hours for which a claimant is engaged in work, that number is to include any time allowed to that claimant by the claimant’s employer for a meal or for refreshment, but only where that claimant is, or expects to be, paid earnings in respect of that time.

• (4) Where the amount determined by the calculation in paragraph (1)(b) or (c) would, but for this paragraph, include an amount of—

• (a) less than 50p, that amount is to be rounded up to the nearest 50p; or

• (b) less than £1 but more than 50p, that amount is to be rounded up to the nearest £1.

• (5) Part 10 applies for the purposes of calculating any income which consists of earnings under this regulation.

• (6) In this regulation—

• ...

• “volunteer” means a person who is engaged in voluntary work otherwise than for a relative, where the only payment received or due to be paid to the person by virtue of being so engaged is in respect of any expenses reasonably incurred by the person in connection with that work;

• ...

• “work placement” means practical work experience with an employer, which is neither paid nor undertaken in expectation of payment.

• (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Effect of work on entitlement to an employment and support allowance where claimant is receiving certain treatment

40

Where a claimant who is entitled to an employment and support allowance and is treated as having limited capability for work by virtue of regulation 22 works on any day during a week when the claimant is receiving certain treatment mentioned in regulation 22 or recovering from that treatment, that work is to have no effect on the claimant’s entitlement to the employment and support allowance.

PART 7 — CLAIMANT RESPONSIBILITIES

Interpretation

41

• (1) In this Part—

• “responsible carer”, in relation to a child, means— a person who is the only person responsible for the child; or a person who is a member of a couple where— both members of the couple are responsible for the child, and the person has been nominated by the couple jointly as responsible for the child;

• “responsible foster parent”, in relation to a child, means— a person who is the only foster parent in relation to the child; or a person who is a member of a couple where— both members of the couple are foster parents in relation to the child, and the person has been nominated by the couple jointly as the responsible foster parent.

• (2) The nomination of a responsible carer or responsible foster parent for the purposes of paragraph (1) may be changed—

• (a) once in a 12 month period, beginning with the date of the previous nomination; or

• (b) on any occasion where the Department considers that there has been a change of circumstances which is relevant to the nomination.

• (3) Only one person may be nominated as a responsible carer or a responsible foster parent.

• (4) The nomination applies to all of the children for whom the claimant is responsible.

Application of regulations where there is dual entitlement

42

• (1) This regulation applies where a person is entitled to universal credit and an employment and support allowance.

• (2) The work-related requirements under sections 11B to 11I of the Act⁵² and regulations 46 to 49 of these Regulations do not apply to such a person.

• (3) Reductions relating to the award of an employment and support allowance under section 11J of the Act⁵³ (sanctions) and regulations 50 to 60 of these Regulations do not apply to such a person.

Sanction ceases to apply to employment and support allowance

43

• (1) This regulation applies where—

• (a) a person is entitled to an employment and support allowance;

• (b) there is a reduction relating to the award of the employment and support allowance under section 11J of the Act;

• (c) the person becomes entitled to universal credit; and

• (d) the person remains entitled to an employment and support allowance.

• (2) Any reduction relating to the award of the employment and support allowance is to cease being applied to the award of the employment and support allowance.

Claimant commitment – date and method of acceptance

44

• (1) For the purposes of section 1(3)(aa) of the Act⁵⁴, a claimant who has accepted a claimant commitment within such period after making a claim for an employment and support allowance as the Department specifies is to be treated as having accepted that claimant commitment on the first day of the period in respect of which the claim is made.

• (2) In a case where an award of an employment and support allowance may be made without a claim, a claimant who accepts a claimant commitment within such period as the Department specifies is to be treated as having accepted a claimant commitment on the day that would be the first day of the first benefit week in relation to the award.

• (3) The Department may extend the period within which a claimant is required to accept a claimant commitment or an updated claimant commitment where the claimant requests an extension and the Department considers that the request is reasonable.

• (4) A claimant must accept a claimant commitment by one of the following methods, as specified by the Department—

• (a) electronically;

• (b) by telephone; or

• (c) in writing.

Claimant commitment – exceptions

45

• (1) A claimant may be entitled to an employment and support allowance without having accepted a claimant commitment if the Department considers that—

• (a) the claimant cannot accept a claimant commitment because they lack capacity to do so; or

• (b) there are exceptional circumstances in which it would be unreasonable to expect the person to accept a claimant commitment.

• (2) A claimant may be entitled to an employment and support allowance without having accepted a claimant commitment if the claimant is terminally ill.

Purposes of a work-focused interview

46

The purposes of a work-focused interview are any or all of the following—

• (a) assessing the claimant’s prospects for remaining in or obtaining work;

• (b) assisting or encouraging the claimant to remain in or obtain work;

• (c) identifying activities that the claimant may undertake that will make remaining in or obtaining work more likely;

• (d) identifying training, educational or rehabilitation opportunities for the claimant which may make it more likely that the claimant will remain in or obtain work or be able to do so;

• (e) identifying current or future work opportunities for the claimant that are relevant to the claimant’s needs and abilities.

Claimants subject to no work-related requirements

47

• (1) A claimant falls within section 11D of the Act (persons subject to no work-related requirements) if they are a claimant who—

• (a) has caring responsibilities for one or more severely disabled persons for at least 35 hours a week but does not meet the conditions of entitlement to a carer’s allowance or have entitlement to carer support payment;

• (b) is the responsible foster parent of a child under the age of one;

• (c) is an adopter and it is 52 weeks or less since—

• (i) the date on which the child was placed with the claimant, or

• (ii) if the claimant requested that the 52 weeks should run from a date within 14 days before the child was expected to be placed, that date;

• (d) has been enrolled on, been accepted for or is undertaking, a full-time course of study or training which is not a course of advanced education and—

• (i) is under the age of 21, or is 21 and reached that age whilst undertaking the course, and

• (ii) is without parental support;

• (e) is entitled to an employment and support allowance which is payable at a nil rate;

• (f) is pregnant and it is 11 weeks or less before her expected week of confinement; or

• (g) was pregnant and it is 15 weeks or less since the date of her confinement.

• (2) Subject to paragraph (3), for the purposes of section 11D of the Act, a person has regular and substantial caring responsibilities for a severely disabled person if the person—

• (a) satisfies the conditions for entitlement to a carer’s allowance, or would do so but for the fact that—

• (i) their earnings have exceeded the limit prescribed for the purposes of that allowance; or

• (ii) they are—

• (aa) resident, or treated as resident, in Scotland; or

• (bb) resident outside of Northern Ireland and have a genuine and sufficient link to Scotland; or

• (b) is entitled to carer support payment.

• (3) A person does not have regular and substantial caring responsibilities for a severely disabled person if the person derives earnings from those caring responsibilities.

• (4) Paragraph (2) applies whether or not the person has made a claim for a carer’s allowance.

• (5) In this regulation—

• “adopter” means a person who has been matched with a child for adoption and who is, or is intended to be, the responsible carer for the child, but excluding a person who is a foster parent or close relative of the child;

• “matched with a child for adoption” means an adoption agency has decided that the person would be a suitable adoptive parent for the child;

• “severely disabled” has the meaning in section 70 of the Contributions and Benefits Act⁵⁵;

• “sufficient” has the meaning given in paragraph 3 of Schedule 1 to the Carer’s Assistance (Carer Support Payment) (Scotland) Regulations 2023;

• “without parental support” means the person is not being looked after by an authority and—has no parent (in this definition, “parent” includes any person acting in the place of a parent);cannot live with their parents because the person is estranged from them or there is a serious risk—to the person’s physical or mental health, orthat the person would suffer significant harm if the person lived with them; oris living away from their parents, and neither parent is able to support the person financially because that parent—has a physical or mental impairment,is detained in custody pending trial or sentence upon conviction or under a sentence imposed by a court, oris prohibited from entering or re-entering Northern Ireland.

Claimants subject to work-focused interview requirement only

48

• (1) For the purposes of section 11E(1)(a) of the Act (persons subject to work-focused interview requirement only) the prescribed age is 3.

• (2) A claimant falls within section 11E of the Act if—

• (a) the claimant is the responsible foster parent in relation to a child aged at least one;

• (b) the claimant is the responsible foster parent in relation to a qualifying young person and the Department is satisfied that the qualifying young person has care needs which would make it unreasonable to require the claimant to comply with a work preparation requirement;

• (c) the claimant is a foster parent, but not the responsible foster parent, in relation to a child or qualifying young person and the Department is satisfied that the child or qualifying young person has care needs which would make it unreasonable to require the claimant to comply with a work preparation requirement;

• (d) the claimant is a foster parent who—

• (i) does not have a child or qualifying young person placed with them, but intends to, and

• (ii) fell within sub-paragraph (a) within the past 8 weeks; or

• (e) the claimant has become a friend or family carer in relation to a child within the past 12 months and is also the responsible carer in relation to that child.

• (3) In paragraph (2)(e), “friend or family carer” means a person who is responsible for a child, but is not the child’s parent or step-parent, and has undertaken the care of the child in the following circumstances—

• (a) the child has no parent or has parents who are unable to care for the child; or

• (b) it is likely that the child would otherwise be looked after by an authority because of concerns in relation to the child’s welfare.

Victims of domestic violence

49

• (1) Where a claimant has recently been a victim of domestic violence and the circumstances set out in paragraph (3) apply—

• (a) a requirement imposed on that claimant under sections 11 to 11G of the Act⁵⁶ ceases to have effect for a period of 13 consecutive weeks starting on the date of the notification referred to in paragraph (3)(a); and

• (b) the Department must not impose any other such requirement on that claimant during that period.

• (2) A person has recently been a victim of domestic violence if a period of 6 months has not expired since the violence was inflicted or threatened.

• (3) The circumstances are that—

• (a) the claimant notifies the Department, in such manner as the Department specifies, that domestic violence has been inflicted on or threatened against the claimant by a person specified in paragraph (4) during the period of 6 months ending on the date of the notification;

• (b) this regulation has not applied to the claimant for a period of 12 months before the date of the notification;

• (c) on the date of the notification the claimant is not living at the same address as the person who inflicted or threatened the domestic violence; and

• (d) as soon as possible, and no later than 1 month, after the date of the notification the claimant provides evidence from a person acting in an official capacity which demonstrates that—

• (i) the claimant’s circumstances are consistent with those of a person who has had domestic violence inflicted on or threatened against them during the period of 6 months ending on the date of the notification, and

• (ii) the claimant has made contact with the person acting in an official capacity in relation to such an incident, which occurred during that period.

• (4) A person is specified in this paragraph if the person is—

• (a) where the claimant is, or was, a member of a couple , the other member of the couple;

• (b) the claimant’s grandparent, grandchild, parent, parent-in-law, son, son-in-law, daughter, daughter-in-law, step-parent, step-son, step-daughter, brother, step-brother, brother-in-law, sister, step-sister or sister-in-law; or

• (c) where any of the persons listed in sub-paragraph (b) is a member of a couple, the other member of that couple.

• (5) In this regulation—

• “coercive behaviour” means an act of assault, humiliation or intimidation or other abuse that is used to harm, punish or frighten the victim;

• “controlling behaviour” means an act designed to make a person subordinate or dependent by isolating them from sources of support, exploiting their resources and capacities for personal gain, depriving them of the means needed for independence, resistance or escape or regulating their everyday behaviour;

• “domestic violence” means any incident, or pattern of incidents, of controlling behaviour, coercive behaviour, violence or abuse, including but not limited to—psychological abuse;physical abuse;sexual abuse;emotional abuse;financial abuse,regardless of the gender or sexuality of the victim;

• “person acting in an official capacity” means a person who is a member of a profession regulated by a body mentioned in section 25(3) of the National Health Service Reform and Health Care Professions Act 2002⁵⁷, a police officer, a registered social worker, the claimant’s employer, a representative of the claimant’s trade union or any public, voluntary or charitable body which has had direct contact with the claimant in connection with domestic violence;

• “registered social worker” means a person registered as a social worker in a register maintained by—the Health and Care Professions Council; Social Care Wales; the Scottish Social Services Council; orthe Northern Ireland Social Care Council.

PART 8 — SANCTIONS

Interpretation

50

For the purposes of this Part—

• “current sanctionable failure” means a failure of the following kinds in relation to which the Department has not yet determined whether the amount of an award of benefit is to be reduced—a sanctionable failure;a JSA sanctionable failure; ora UC sanctionable failure;

• “JSA sanctionable failure” means a failure by a claimant which is sanctionable under Article 8K of the Jobseekers Order⁵⁸;

• “low-level sanction” means a reduction of an employment and support allowance in accordance with section 11J of the Act for a sanctionable failure by the claimant to comply with—a work-focused interview requirement imposed under section 11F(2) of the Act (persons subject to work preparation and work-focused interview requirement);a work preparation requirement imposed under section 11F(2) of the Act; ora requirement under section 11G of the Act (connected requirements);

• “lowest-level sanction” means a reduction of an employment and support allowance in accordance with section 11J of the Act for a sanctionable failure by the claimant to comply with a requirement imposed under section 11E(2) of the Act (persons subject to work-focused interview requirement only);

• “reduction period” means the number of days for which a reduction in the amount of an award of an employment and support allowance is to have effect;

• “relevant failure” means—a sanctionable failure giving rise to a low-level sanction;a UC sanctionable failure giving rise to a sanction under Article 32 of the Welfare Reform (Northern Ireland) Order 2015 to which regulation 101 of the Universal Credit Regulations (Northern Ireland) 2016 applies; ora JSA sanctionable failure giving rise to a sanction under Article 8K of the Jobseekers (Northern Ireland) Order 1995 to which regulation 22 of the Jobseeker’s Allowance Regulations (Northern Ireland) 2016 applies;

• “sanctionable failure” means a failure which is sanctionable under section 11J of the Act;

• “total outstanding reduction period” means the total number of days for which no reduction has yet been applied for all of the claimant’s low-level sanctions, lowest level sanctions and reductions to which regulation 61 applies;

• “UC sanctionable failure” means a failure by a claimant which is sanctionable under Article 31 or 32 of the Welfare Reform (Northern Ireland) Order 2015.

General principles for calculating reduction periods

51

• (1) Subject to paragraph (3), the reduction period is to be determined in relation to each sanctionable failure in accordance with regulations 52 and 53.

• (2) Reduction periods are to run consecutively.

• (3) Where the reduction period calculated in relation to a sanctionable failure in accordance with regulation 52 or 53 would result in the total outstanding reduction period exceeding 546 days, the number of days in the reduction period in relation to that failure is to be adjusted so that 546 days is not exceeded.

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Low-level sanction

52

The reduction period for a low-level sanction is the total of—

• (a) the number of days beginning with the date of the sanctionable failure and ending with—

• (i) the day before the date on which the claimant meets a compliance condition specified by the Department,

• (ii) the day before the date on which the claimant falls within section 11D of the Act,

• (iii) the day before the date on which the claimant is no longer required to take a particular action specified as a work preparation requirement by the Department under section 11C(1) or 11F(2) of the Act, or

• (iv) the day on which the award of an employment and support allowance is terminated,

whichever is soonest; and

• (b) in the circumstances described in the first column of the following table, the number of days set out in the second column.

Circumstances applicable to claimant’s case	Number of days
Where there has been no previous relevant failure by the claimant.	7 days
Where there have been one or more previous relevant failures by the claimant and the date of the most recent previous relevant failure is not within 365 days beginning with and including the date of the current sanctionable failure.	7 days
Where there have been one or more previous relevant failures by the claimant and the date of the most recent previous relevant failure is within 365 days, but not within 14 days, beginning with and including the date of the current sanctionable failure and the reduction period applicable to the most recent previous relevant failure is—
(a) 7 days	14 days
(b) 14 days(c) 28 days	28 days28 days
Where there have been one or more previous relevant failures by the claimant and the date of the most recent previous relevant failure is within 14 days beginning with and including the date of the current sanctionable failure and the reduction period applicable to the most recent previous relevant failure is–
(a) 7 days	7 days
(b) 14 days(c) 28 days	14 days28 days.

Lowest-level sanction

53

The reduction period for a lowest-level sanction is the number of days beginning with the date of the sanctionable failure and ending with—

• (a) the day before the date on which the claimant meets a compliance condition specified by the Department;

• (b) the day before the date on which the claimant falls within section 11D of the Act; or

• (c) the day on which the claimant’s award of an employment and support allowance is terminated,

whichever is soonest.

Start of the reduction

54

A reduction period determined in relation to a sanctionable failure takes effect from—

• (a) where the claimant has not been paid an employment and support allowance for the benefit week in which the Department determines that the amount of the award of the employment and support allowance is to be reduced under section 11J of the Act, the first day of that benefit week;

• (b) where the claimant has been paid an employment and support allowance for the benefit week referred to in paragraph (a), the first day of the first benefit week for which the claimant has not been paid an employment and support allowance; or

• (c) where the amount of the award of the employment and support allowance for the benefit week referred to in paragraph (a) or (b) is already subject to a reduction because of a previous sanctionable failure, the first day in respect of which the amount of the award is no longer subject to that reduction.

Reduction period to continue where an award of an employment and support allowance terminates

55

• (1) Where an award of an employment and support allowance terminates while there is an outstanding reduction period—

• (a) the period continues to run as if a daily reduction were being applied; and

• (b) if the claimant becomes entitled to a new award of an employment and support allowance before the period expires, that new award is subject to a reduction for the remainder of the total outstanding reduction period.

• (2) Paragraph (3) applies where—

• (a) an award of an employment and support allowance terminates before the Department determines that the amount of the award is to be reduced under section 11J of the Act in relation to a sanctionable failure; and

• (b) that determination is made after the claimant becomes entitled to a new award of an employment and support allowance.

• (3) Where this paragraph applies—

• (a) the reduction period in relation to the sanctionable failure referred to in paragraph (2) is to be treated as having taken effect on the day before the previous award terminated;

• (b) that reduction period is treated as having continued to run as if a daily reduction were being applied; and

• (c) if the new award referred to in paragraph (2)(b) begins before that reduction period expires, that new award is subject to a reduction for the remainder of the total outstanding reduction period.

Suspension of a reduction where a fraud sanction applies

56

• (1) A reduction in the amount of an award of an employment and support allowance in accordance with section 11J of the Act is to be suspended for any period during which section 5B or 6 of the Social Security Fraud Act (Northern Ireland) 2001⁵⁹ applies to the award.

• (2) The reduction ceases to have effect on the day on which that period begins and has effect again on the day after that period ends.

Termination of a reduction

57

• (1) A reduction in the amount of an award of an employment and support allowance under section 11J of the Act is to be terminated where, since the date of the most recent sanctionable failure which gave rise to such a reduction, the claimant has been in paid work—

• (a) for a period of at least 26 weeks; or

• (b) for more than one period where the total of those periods amounts to at least 26 weeks.

• (2) The termination of the reduction has effect—

• (a) where the date on which paragraph (1) is satisfied falls within a period of entitlement to an employment and support allowance, from the beginning of the benefit week in which that date falls; or

• (b) where that date falls outside a period of entitlement to an employment and support allowance, from the beginning of the first benefit week in relation to any subsequent award of an employment and support allowance.

• (3) The claimant is in paid work for the purposes of paragraph (1) where their weekly earnings are at least equal to 16 multiplied by the amount that a person of the same age as the claimant would be paid at the hourly rate applicable under regulation 4 or regulation 4A(1)(a) to (c) of the National Minimum Wage Regulations 2015⁶⁰.

Amount of reduction for each benefit week

58

Where it has been determined that an award of an employment and support allowance is to be reduced in accordance with section 11J of the Act, the amount of the reduction for each benefit week in respect of which a reduction has effect is to be calculated as follows.

Step 1

Take the number of days—

• (a) in the benefit week; or

• (b) if lower, in the total outstanding reduction period,

and deduct any days in that benefit week or total outstanding reduction period for which the reduction is suspended in accordance with regulation 56.

Step 2

Multiply the number of days produced by step 1 by the daily reduction rate.

Step 3

Deduct the amount produced by step 2 from the amount of the award of employment and support allowance for the benefit week.

Daily reduction rate

59

• (1) The daily reduction rate for the purposes of regulation 58 is, unless regulation 60 applies, the amount prescribed for the claimant under regulation 62(1) or, where applicable, regulation 63(2), multiplied by 52 and divided by 365.

• (2) The amount of the daily reduction rate is to be rounded down to the nearest 10p.

Lower daily reduction rate

60

• (1) The daily reduction rate is 40 per cent. of the rate applicable under regulation 59(1) if, at the end of the benefit week, the claimant falls within—

• (a) section 11E of the Act;

• (b) section 11D(2)(c) of the Act; or

• (c) regulation 47(1)(b), (c), (f) or (g).

• (2) The daily reduction rate is nil if, at the end of the benefit week, the claimant falls within section 11D(2)(a) of the Act.

Sanctions where universal credit ends and the person is entitled to an employment and support allowance

61

• (1) This regulation applies where—

• (a) a person ceases to be entitled to universal credit;

• (b) there is a reduction relating to the person’s award of universal credit under Article 31 or 32 of the Welfare Reform (Northern Ireland) Order 2015; and

• (c) the person is entitled to an employment and support allowance.

• (2) Any reduction relating to the award of the universal credit is to be applied to the award of the employment and support allowance.

• (3) The period for which the reduction relating to the award of an employment and support allowance is to have effect is the number of days which apply to the person under regulation 99, 100, 101 or 102 of the Universal Credit Regulations minus any such days which—

• (a) have already resulted in a reduction in the amount of universal credit; or

• (b) fall after the date on which the person ceases to be entitled to universal credit and before the date on which the person becomes entitled to an employment and support allowance.

• (4) The daily reduction rate for the reduction relating to the award of an employment and support allowance is—

• (a) the amount referred to in regulation 60(1) where, on the date the claimant becomes entitled to an employment and support allowance, the claimant falls within—

• (i) section 11E of the Act,

• (ii) section 11D(2)(c) of the Act, or

• (iii) regulation 47(1)(b), (c), (f) or (g);

• (b) zero where the claimant falls within section 11D(2)(a) of the Act; or

• (c) the amount referred to in regulation 59(1) in all other cases.

• (5) The amount of the reduction of the claimant’s award of an employment and support allowance is the number of days arrived at under paragraph (3) multiplied by the daily reduction rate referred to in paragraph (4).

PART 9 — AMOUNTS OF ALLOWANCE

Prescribed amounts

62

• (1) Subject to regulation 63 (special cases) the amount prescribed for the purposes of the calculation of the amount of a claimant’s employment and support allowance under section 2(1)(a) of the Act is—

• (a) where the claimant satisfies the conditions set out in section 2(2) or (3) of the Act or the claimant is a member of the work-related activity group and satisfies the conditions set out in Part 1 of Schedule 1 to the Act, £92.05; or

• (b) where the claimant does not satisfy the conditions set out in section 2(2) or (3) of the Act or the claimant is a member of the work-related activity group and satisfies the conditions set out in Part 1 of Schedule 1 to the Act—

• (i) where the claimant is aged not less than 25, £92.05, or

• (ii) where the claimant is aged less than 25, £72.90.

• (2) Subject to regulation 63, the amount of—

• (a) the work-related activity component is £36.55 and

• (b) the support component is £48.50

Subject to regulation 63 the amount of the support component is £48.50.

Special cases

63

• (1) The amount prescribed for the purposes of the calculation of the amount of a claimant’s employment and support allowance under section 2(1)(a) of the Act in respect of a claimant who—

• (a) satisfies the condition in paragraph (3); or

• (b) has been a patient for a continuous period of more than 52 weeks,

is the amount applicable under regulation 62(1) and the amount of nil under regulation 62(2).

• (2) The amount prescribed for those purposes in respect of a claimant who is a person in hardship, is the amount to which the claimant is entitled—

• (a) under regulation 62(1) reduced by 20 per cent.; and

• (b) under regulation 62(2).

• (3) The condition mentioned in paragraph (1)(a) is that—

• (a) the claimant is being detained under Article 53 of the Mental Health Order⁶¹ (removal to hospital of persons serving sentences of imprisonment etc.); and

• (b) in any case where there is in relation to the claimant a release date within the meaning of Article 56(3) of that Order⁶² (further provisions as to prisoners under sentence), the claimant is being detained on or before the day which the Department of Justice certifies to be that release date.

• (4) In this regulation—

• “patient” means a person (other than a prisoner) who is regarded as receiving free in-patient treatment within the meaning of regulation 2(4) and (5) of the Social Security (Hospital In-Patients) Regulations (Northern Ireland) 2005⁶³;

• “prisoner” means a person who— is detained in custody pending trial or sentence on conviction or under a sentence imposed by a court; or is on temporary release in accordance with the provisions of the Prison Act (Northern Ireland) 1953⁶⁴, other than a person who is detained in hospital under the provisions of the Mental Health Order.

• (5) For the purposes of this regulation—

• (a) except where sub-paragraph (b) applies, a person is a “person in hardship” if they satisfy regulation 94; and

• (b) where a person satisfies regulation 94 for more than 6 weeks, they are a person in hardship only for the first 6 weeks.

Permanent health insurance

64

For the purposes of sections 2(1)(c) and 3(3) of the Act (deductions from an employment and support allowance) “pension payment” is to include a permanent health insurance payment.

Financial Assistance Scheme

65

• (1) For the purposes of sections 2(1)(c) and 3(3) of the Act “pension payment” is to include a Financial Assistance Scheme payment.

• (2) In this regulation “Financial Assistance Scheme payment” means a payment made under the Financial Assistance Scheme Regulations 2005⁶⁵.

Councillor’s allowance

66

For the purposes of section 3(1)(c) of the Act—

• (a) a councillor’s allowance is a payment of a prescribed description; and

• (b) the prescribed bodies carrying out public or local functions are district councils.

Deductions for pension payment and PPF payment

67

• (1) Where—

• (a) a claimant is entitled to an employment and support allowance in respect of any period of a week or part of a week;

• (b) there is—

• (i) a pension payment,

• (ii) a PPF periodic payment, or

• (iii) both of the payments specified in heads (i) and(ii),

payable to that person in respect of that period (or a period which forms part of that period or includes that period or part of it); and

• (c) the amount of the payment, or payments when taken together, exceeds—

• (i) if the period in question is a week, £85, or

• (ii) if that period is not a week, such proportion of £85 as falls to be calculated in accordance with regulation 79(1) or (5) (calculation of weekly amount of income),

the amount of that allowance is to be reduced by an amount equal to 50 per cent. of the excess.

• (2) For the purposes of regulations 67 to 72 “payment” means a payment or payments, as the case may be, referred to in paragraph (1)(b).

Payments treated as not being payments to which section 3 applies

68

The following payments are to be treated as not being payments to which section 3 of the Act applies—

• (a) any pension payment made to a claimant as a beneficiary on the death of a member of any pension scheme;

• (b) any PPF periodic payment made to a claimant as a beneficiary on the death of a person entitled to such a payment;

• (c) where a pension scheme is in deficit or has insufficient resources to meet the full pension payment, the extent of the shortfall;

• (d) any pension payment made under an instrument specified in section 639(2) of the Income Tax (Earnings and Pensions) Act 2003⁶⁶;

• (e) any guaranteed income payment (which means a payment made under Article 15(1)(a) or 29(1)(a) of the Armed Forces and Reserve Forces (Compensation Scheme) Order 2011⁶⁷;

• (f) any permanent health insurance payment in respect of which the employee had contributed to the premium to the extent of more than 50 per cent..

Deductions for councillor’s allowance

69

• (1) Where the net amount of councillor’s allowance to which a claimant is entitled in respect of any week exceeds 16 multiplied by the national living wage, subject to paragraph (3), an amount equal to the excess is to be deducted from the amount of an employment and support allowance to which that claimant is entitled in respect of that week, and only the balance remaining (if any) is to be payable.

• (2) In paragraph (1) “net amount”, in relation to any councillor’s allowance to which a claimant is entitled, means the aggregate amount of the councillor’s allowance or allowances, or remuneration to which that claimant is entitled for the week in question, reduced by the amount of any payment in respect of expenses wholly, exclusively and necessarily incurred by that claimant, in that week, in the performance of the duties of a councillor.

• (3) Where the amount determined by the calculation in paragraph (1) would, but for this paragraph, include an amount of—

• (a) less than 50p, that amount is to be rounded up to the nearest 50p; or

• (b) less than £1 but more than 50p, that amount is to be rounded up to the nearest £1.

Date from which payments are to be taken into account

70

Where regulation 67(1) or 69(1) applies, a deduction must have effect, calculated where appropriate in accordance with regulation 79(1) or (5), from the first day of the benefit week in which the payment or councillor’s allowance is paid to a claimant who is entitled to an employment and support allowance in that week.

Date from which a change in the rate of the payment takes effect

71

Where a payment or councillor’s allowance is already being made to a claimant and the rate of that payment or allowance changes, the deduction at the new rate must take effect, calculated where appropriate in accordance with regulation 79(1) or (5), from the first day of the benefit week in which the new rate of the payment or councillor’s allowance is paid.

Calculation of payment made other than weekly

72

• (1) Where the period in respect of which a payment or councillor’s allowance is paid is otherwise than weekly, an amount calculated or estimated in accordance with regulation 79(1) or (5) is to be regarded as the weekly amount of that payment or allowance.

• (2) In determining the weekly payment, where two or more payments are payable to a claimant, each payment is to be calculated separately in accordance with regulation 79(1) or (5) before aggregating the sum of those payments for the purposes of the reduction of an employment and support allowance in accordance with regulation 67.

Effect of statutory maternity pay on an employment and support allowance

73

• (1) This regulation applies where—

• (a) a woman is entitled to statutory maternity pay and, on the day immediately preceding the first day in the maternity period, she—

• (i) is in a period of limited capability for work, and

• (ii) satisfies the conditions of entitlement to an employment and support allowance in accordance with section 1(2)(a) of the Act; and

• (b) on any day during the maternity pay period—

• (i) she is in a period of limited capability for work, and

• (ii) that day is not a day where she is treated as not having limited capability for work.

• (2) Where this regulation applies, notwithstanding section 20(2) of the Act, a woman who is entitled to statutory maternity pay is to be entitled to an employment and support allowance in respect of any day that falls within the maternity pay period.

• (3) Where by virtue of paragraph (2) a woman is entitled to an employment and support allowance for any week (including part of a week), the total amount of employment and support allowance payable to her for that week is to be reduced by an amount equivalent to any statutory maternity pay to which she is entitled in accordance with Part 12 of the Contributions and Benefits Act for the same week (or equivalent part of a week where entitlement to an employment and support allowance is for part of a week), and only the balance, if any, of the employment and support allowance is to be payable to her.

Effect of statutory adoption pay on an employment and support allowance

74

• (1) This regulation applies where—

• (a) a claimant is entitled to statutory adoption pay and, on the day immediately preceding the first day in the adoption pay period, she—

• (i) is in a period of limited capability for work, and

• (ii) satisfies the conditions of entitlement to an employment and support allowance in accordance with section 1(2)(a) of the Act; and

• (b) on any day during the adoption pay period—

• (i) that claimant is in a period of limited capability for work, and

• (ii) that day is not a day where that claimant is treated as not having limited capability for work.

• (2) Where this regulation applies, notwithstanding section 20(4) of the Act, a claimant who is entitled to statutory adoption pay is to be entitled to an employment and support allowance in respect of any day that falls within the adoption pay period.

• (3) Where by virtue of paragraph (2) a claimant is entitled to an employment and support allowance for any week (including part of a week), the total amount of employment and support allowance payable to that claimant for that week is to be reduced by an amount equivalent to any statutory adoption pay to which that claimant is entitled in accordance with Part 12ZB of the Contributions and Benefits Act⁶⁸ for the same week (or equivalent part of a week where entitlement to an employment and support allowance is for part of a week), and only the balance, if any, of the employment and support allowance is to be payable to that claimant.

Effect of statutory shared parental pay on an employment and support allowance

75

• (1) This regulation applies where—

• (a) a claimant is entitled to statutory shared parental pay and, on the day immediately preceding the first day in the shared parental pay period the claimant—

• (i) is in a period of limited capability for work, and

• (ii) satisfies the conditions of entitlement to an employment and support allowance in accordance with section 1(2)(a) of the Act; and

• (b) on any day during the statutory shared parental pay period—

• (i) that claimant is in a period of limited capability for work, and

• (ii) that day is not a day where that claimant is treated as not having limited capability for work.

• (2) Where this regulation applies, notwithstanding section 20(6) of the Act, a claimant who is entitled to statutory shared parental pay is to be entitled to an employment and support allowance in respect of any day that falls within the shared parental pay period.

• (3) Where by virtue of paragraph (2) a person is entitled to an employment and support allowance for any week (including part of a week), the total amount of such benefit payable to that claimant for that week is to be reduced by an amount equivalent to any statutory shared parental pay to which that claimant is entitled in accordance with Part 12ZC of the Contributions and Benefits Act⁶⁹ for the same week (or equivalent part of a week where entitlement to an employment and support allowance is for part of a week), and only the balance, if any, of the employment and support allowance is to be payable to that claimant.

• (4) In this regulation “statutory shared parental pay period” means the weeks in respect of which statutory shared parental pay is payable to a person under section 167ZZ2(2) of the Contributions and Benefits Act.

PART 10 — INCOME AND EARNINGS

Calculation of earnings derived from employed earner’s employment and income other than earnings

76

• (1) Earnings derived from employment as an employed earner and income which does not consist of earnings are to be taken into account over a period determined in accordance with the following provisions of this regulation and at a weekly amount determined in accordance with regulation 79 (calculation of weekly amount of income).

• (2) Subject to the following provisions of this regulation, the period over which a payment is to be taken into account is to be—

• (a) where the payment is monthly, a period equal to the number of weeks beginning with the date on which the payment is treated as paid and ending with the date immediately before the date on which the next monthly payment would have been treated as paid whether or not the next monthly payment is actually paid;

• (b) where the payment is in respect of a period which is not monthly, a period equal to the length of the period for which payment is made;

• (c) in any other case, a period equal to such number of weeks as is equal to the number obtained (see paragraph (9)) by applying the formula—

$E J$

where—

• E is the net earnings;

• J is the amount of an employment and support allowance which would be payable had the payment not been made;

and that period is to begin on the date on which the payment is treated as paid under regulation 78 (date on which income is to be treated as paid).

• (3) Where—

• (a) earnings are derived from the same source but are not of the same kind; and

• (b) but for this paragraph, the periods in respect of which those earnings would fall to be taken into account overlap, wholly or partly,

those earnings are to be taken into account over a period equal to the aggregate length of those periods, and that period is to begin with the earliest date on which any part of those earnings would be treated as paid under regulation 78.

• (4) In a case to which paragraph (5) applies, earnings under regulation 80 (earnings of employed earners) are to be taken into account in the following order of priority—

• (a) earnings normally derived from the employment;

• (b) any payment to which paragraph (1)(b) or (c) of that regulation applies;

• (c) any payment to which paragraph (1)(j) of that regulation applies;

• (d) any payment to which paragraph (1)(d) of that regulation applies.

• (5) Where earnings to which regulation 80(1)(b) to (d) applies are paid in respect of part of a day, those earnings are to be taken into account over a period equal to a day.

• (6) Any earnings to which regulation 80(1)(j) applies which are paid in respect of, or on the termination of, part-time employment, are to be taken into account over a period of one week.

• (7) For the purposes of this regulation the claimant’s earnings are to be calculated in accordance with regulations 80 and 81.

• (8) For the purposes of paragraph 10 of Schedule 2 to the Act (effect of work), the income which consists of earnings of a claimant is to be calculated on a weekly basis by determining the weekly amount of those earnings in accordance with regulations 77 to 84.

• (9) For the purposes of the number obtained as mentioned in paragraph (2)(c), any fraction is to be treated as a corresponding fraction of a week.

Calculation of earnings of self-employed earners

77

• (1) Where a claimant’s income consists of earnings from employment as a self-employed earner, the weekly amount of the claimant’s earnings is to be determined by reference to the claimant’s average weekly earnings from that employment—

• (a) over a period of one year; or

• (b) where the claimant has recently become engaged in that employment or there has been a change which is likely to affect the normal pattern of business, over such other period as may, in any particular case, enable the weekly amount of the claimant’s earnings to be determined more accurately.

• (2) For the purposes of this regulation the claimant’s earnings are to be calculated in accordance with regulations 82 to 84.

Date on which income is treated as paid

78

A payment of income to which regulation 76 (calculation of earnings derived from employed earner’s employment and income other than earnings) applies is to be treated as paid—

• (a) in the case of a payment which is due to be paid before the first benefit week pursuant to the claim, on the date on which it is due to be paid;

• (b) in any other case, on the first day of the benefit week in which it is due to be paid or the first succeeding benefit week in which it is practicable to take it into account.

Calculation of weekly amount of income

79

• (1) For the purposes of regulation 76 (calculation of earnings derived from employed earner’s employment and income other than earnings) and regulations 64 to 72 (deductions from employment and support allowance), subject to paragraphs (2) to (5), where the period in respect of which a payment is made—

• (a) does not exceed a week, the weekly amount is to be the amount of that payment;

• (b) exceeds a week, the weekly amount is to 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 a case where that period is 3 months, by multiplying the amount of the payment by 4 and dividing the product by 52;

• (iii) in a case where that period is a year and the payment is income, by dividing the amount of the payment by 52;

• (iv) in any other case, by multiplying the amount of the payment by 7 and dividing the product by the number equal to the number of days in the period in respect of which it is made.

• (2) Where a payment for a period not exceeding a week is treated under regulation 78(a) (date on which income is treated as paid) as paid before the first benefit week and a part is to be taken into account for some days only in that week (the relevant days), the amount to be taken into account for the relevant days is to be calculated by multiplying the amount of the payment by the number of relevant days and dividing the product by the number of days in the period in respect of which it is made.

• (3) Where a payment is in respect of a period equal to or in excess of a week and a part thereof is to be taken into account for some days only in a benefit week (the relevant days), the amount to be taken into account for the relevant days is to be calculated by multiplying the amount of the payment by the number of relevant days and dividing the product by the number of days in the period in respect of which it is made.

• (4) Except in the case of a payment which it has not been practicable to treat under regulation 78(b) (date on which income is treated as paid) as paid on the first day of the benefit week in which it is due to be paid, where a payment of income from a particular source is or has been paid regularly and that payment falls to be taken into account in the same benefit week as a payment of the same kind and from the same source, the amount of that income to be taken into account in any one benefit week is not to exceed the weekly amount determined under paragraph (1)(a) or (b) of the payment which under regulation 78(b) is treated as paid first.

• (5) Where the amount of the claimant’s income fluctuates and has changed more than once, or a claimant’s regular pattern of work is such that the claimant does not work every week, the foregoing paragraphs may be modified so that the weekly amount of the claimant’s income is determined by reference to the claimant’s average weekly income—

• (a) if there is a recognisable cycle of work, over the period of one complete cycle (including, where the cycle involves periods in which the claimant does no work, those periods but disregarding any other absences);

• (b) in any other case, over a period of 5 weeks or such other period as may, in the particular case, enable the claimant’s average weekly income to be determined more accurately.

Earnings of employed earners

80

• (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 4 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 Article 146(4) or 151(3)(a) of the Employment Rights Order⁷⁰ (the remedies: orders and compensation enforcement of order and compensation);

• (h) any payment made or remuneration paid under Article 60, 66, 96, 100 or 102 of the Employment Rights Order (right to guarantee payments, remuneration on suspension on medical or maternity grounds, complaints to industrial tribunals);

• (i) any such sum as is referred to in section 112(3) of the Contributions and Benefits Act⁷¹ (certain sums to be earnings for social security purposes);

• (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 2001⁷²;

• (l) any payment made under the legislation of, or under any scheme operating in, the Republic of Ireland which is analogous to any income to which this paragraph relates.

• (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, adoption leave (which means a period of absence from work on ordinary or additional adoption leave under Article 107A or 107B of the Employment Rights Order ⁷³), shared parental leave under Article 107E or 107G of that Order , parental bereavement leave under Article 112EA of that Order 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 Scheme⁷⁴;

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

• (g) any bounty paid at intervals of at least one year and derived from employment as—

• (i) an auxiliary coastguard in respect of coast rescue activities;

• (ii) a person engaged part-time in the manning or launching of a lifeboat;

• (iii) a member of any territorial or reserve force prescribed in Part 1 of Schedule 6 to the Social Security (Contributions) Regulations 2001⁷⁵.

• (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—any payment specified in paragraph (1)(a) to (i) or (l);any payment specified in paragraph (2)(a) to (f);any redundancy payment within the meaning of Article 170(1) of the Employment Rights Order; andany refund of contributions to which that person was entitled under an occupational pension scheme;

• “paternity leave” means a period of absence from work on paternity leave by virtue of Article 112A or 112B⁷⁶ of the Employment Rights Order.

• (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;

• (b) a person who is being consulted by or on behalf of—

• (i) the Department in relation to any of the Department’s functions in the field of social security or child support or under section 1 of the Employment and Training Act⁷⁷ (general functions of the Department as to employment and training for employment), 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; or

• (c) the carer of a person consulted under sub-paragraphs (a) or (b).

Calculation of net earnings of employed earners

81

• (1) For the purposes of regulation 76 (calculation of earnings derived from employed earner’s employment and income other than earnings) the earnings of a claimant derived from employment as an employed earner to be taken into account are the claimant’s net earnings.

• (2) For the purposes of paragraph (1) net earnings are to be calculated by taking into account the gross earnings of the claimant from that employment less—

• (a) any amount deducted from those earnings by way of—

• (i) income tax,

• (ii) primary Class 1 contributions under section 6(1)(a) of the Contributions and Benefits Act⁷⁸;

• (b) one half of any sum paid by the claimant in respect of a pay period by way of a contribution towards an occupational or personal pension scheme.

• (3) Where the claimant is an employed earner in the Republic of Ireland the amounts to be deducted for income tax and primary Class 1 contributions under this regulation shall be such amounts as, in the opinion of the Department, would have been deducted had the claimant been employed in Northern Ireland.

Earnings of self-employed earners

82

• (1) Subject to paragraph (2), “earnings”, in the case of employment as a self-employed earner, means the gross receipts of the employment and include any allowance paid under sections 2 and 3 of the Disabled Persons (Employment) Act⁷⁹, section 1 of the Employment and Training Act⁸⁰ or any equivalent allowance paid under Republic of Ireland legislation to the claimant for the purpose of assisting the claimant in carrying on the claimant’s business.

• (2) “Earnings” do not include—

• (a) where a claimant is involved in providing board and lodging accommodation for which a charge is payable, any payment by way of such a charge;

• (b) any award made by one of the Sports Councils named in section 23(2) of the National Lottery etc. Act 1993⁸¹ out of sums allocated to it for distribution under that section.

• (3) In this regulation, “board and lodging” means—

• (a) accommodation provided to a person or, if the person is a member of a family, to that person or any other member of that person’s family, for a charge which is inclusive of the provision of that accommodation and at least some cooked or prepared meals which both are cooked or prepared (by a person other than the person to whom the accommodation is provided or a member of that person’s family) and are consumed in that accommodation or associated premises; or

• (b) accommodation provided to a person in a hotel, guest house, lodging house or some similar establishment,

except accommodation provided by a close relative of the person or any other member of the person’s family, or other than on a commercial basis.

Calculation of net profit of self-employed earners

83

• (1) For the purposes of regulation 77 (calculation of earnings of self-employed earners), the earnings of a claimant to be taken into account are to be—

• (a) in the case of a self-employed earner who is engaged in employment on that self-employed earner’s own account, the net profit derived from that employment;

• (b) in 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 (Northern Ireland) 1975⁸², that self-employed earner’s share of the net profit derived from that employment less—

• (i) an amount in respect of income tax and of National Insurance contributions payable under the Contributions and Benefits Act calculated in accordance with regulation 84 (deduction of tax and contributions for self-employed earners); and

• (ii) one half of any contribution paid in the period that is relevant under regulation 77 (calculation of earnings of self-employed earners) in respect of a personal pension scheme.

• (2) For the purposes of paragraph (1)(a) the net profit of the employment, except where paragraph (8) applies, is to be calculated by taking into account the earnings of the employment over the period determined under regulation 77 less—

• (a) subject to paragraphs (4) to (6), any expenses wholly and exclusively defrayed in that period for the purposes of that employment;

• (b) an amount in respect of—

• (i) income tax, and

• (ii) National Insurance contributions payable under the Contributions and Benefits Act,

calculated in accordance with regulation 84; and

• (c) one half of any contribution paid in the period that is relevant under regulation 77 in respect of a personal pension scheme.

• (3) For the purposes of paragraph (1)(b), the net profit of the employment is to be calculated by taking into account the earnings of the employment over the period determined under regulation 77 less, subject to paragraphs (4) to (6), any expenses wholly and exclusively defrayed in that period for the purpose of that employment.

• (4) Subject to paragraph (5), a deduction is not to be made under paragraph (2)(a) or (3) 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 period determined under regulation 77;

• (e) the repayment of capital on any loan taken out for the purposes of the employment;

• (f) any expenses incurred in providing business entertainment.

• (5) A deduction is to be made under paragraph (2)(a) or (3) in respect of the repayment of capital on any loan used for—

• (a) the replacement in the course of business of equipment or machinery;

• (b) the repair of an existing business asset except to the extent that any sum is payable under an insurance policy for its repair; and

• (c) the purchase of land under the Northern Ireland Land Act 1925⁸³.

• (6) The Department must refuse to make a deduction in respect of any expenses under paragraph (2)(a) or (3) where it is not satisfied that the expense has been defrayed or, having regard to the nature of the expense and its amount, that it has been reasonably incurred.

• (7) A deduction—

• (a) is not to be made under paragraph (2)(a) or (3) in respect of any sum unless it has been expended for the purposes of the business;

• (b) is to be made under paragraph (2)(a) or (3) in respect of—

• (i) the excess of any Value Added Tax paid over Value Added Tax received in the period determined under regulation 77;

• (ii) any income expended in the repair of an existing 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.

• (8) Where a claimant is engaged in employment as a child minder the net profit of the employment is to be one third of the earnings of that employment, less—

• (a) an amount in respect of—

• (i) income tax; and

• (ii) National Insurance contributions payable under the Contributions and Benefits Act,

calculated in accordance with regulation 84; and

• (b) one half of any contribution paid in respect of a personal pension scheme.

• (9) Notwithstanding regulation 77 and the foregoing paragraphs, the Department may assess any item of a claimant’s income or expenditure over a period other than that determined under regulation 77 as may, in the particular case, enable the weekly amount of that item of income or expenditure to be determined more accurately.

• (10) Where a claimant is engaged in employment as a self-employed earner and that claimant is also engaged in one or more other employments as a self-employed or employed earner, any loss incurred in any one of the claimant’s employments is not to be offset against the claimant’s earnings in any other of the claimant’s employments.

• (11) Where the claimant is a self-employed earner in the Republic of Ireland the amounts to be deducted for income tax and National Insurance contributions under this regulation are to be such amounts as, in the opinion of the Department, would have been deducted had the claimant been employed in Northern Ireland.

Deduction of tax and contributions for self-employed earners

84

• (1) Subject to paragraph (2), the amount to be deducted in respect of income tax under regulation 83(1)(b)(i), (2)(b)(i) or (8)(a)(i) (calculation of net profit of self-employed earners) is to be calculated on the basis of the amount of chargeable income and as if that income were assessable to income tax at the basic rate , or in the case of a Scottish taxpayer, the Scottish basic rate, of tax less only the personal 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 the claimant’s circumstances.

• (2) If the period determined under regulation 77 is less than a year, the earnings to which the basic rate , or the Scottish basic rate, of tax is to be applied and the amount of the personal allowance deductible under paragraph (1) is to be calculated on a pro rata basis.

• (3) The amount to be deducted in respect of National Insurance contributions under regulation 83(1)(b)(i), (2)(b)(ii) or (8)(a)(ii) is to be the total of—

• (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (b) the amount of Class 4 contributions (if any) which would be payable under section 15 of that Act⁸⁴ (Class 4 contributions recoverable under the Income Tax Acts) at the percentage rate applicable at the date of claim on so much of the chargeable income as exceeds the lower limit but does not exceed the upper limit of profits applicable for the tax year in which the date of claim falls; but if the assessment period is less than a year, those limits are to be reduced pro rata.

• (4) In this regulation—

• “assessment period” means the period mentioned in regulation 77 over which the weekly amount of the claimant’s earnings is to be determined;

• “basic rate” has the same meaning as in the Income Tax Act 2007 (see section 989 of that Act);