The Family Credit (General) Regulations 1987

• (1) 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.

• (2) Any holiday pay which is not earnings under regulation 19(1)(b) (earnings of employed earners) shall be treated as capital.

• (3) Any charitable or voluntary payment which is not made or is not due to be made at regular intervals, other than a payment which is made under the Macfarlane Trust, the Macfarlane (Special Payments) Trust, the Macfarlane (Special Payments) ( No. 2) Trust , the Fund , the Eileen Trust or the Independent Living Funds shall be treated as capital.

• (4) Except any income derived from capital disregarded under paragraph 1, 1A, 2, 4, 6 , 13 or 26 to 30 of Schedule 3, 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 maintenance payment other than one to which regulation 16(2) or (2A) (normal weekly income other than earnings) applies 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 an employment programme specified in regulation 75(1)(a)(ii)(aa)(ii) of the Jobseeker’s Allowance Regulations 1996 (self-employment route of the Employment Option of the New Deal), but only in so far as those receipts were payable into a special account (as defined for the purposes of Chapter IVA of Part VIII of those Regulations) 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 bounty derived from employment as a member of any territorial or reserve force prescribed in Part I of Schedule 3 to the Social Security (Contributions) Regulations 1979 and paid at intervals of at least one year shall be treated as capital.

Calculation of capital in the United Kingdom

32

Capital which a claimant possesses in the United Kingdom shall be calculated—

• (a) except in a case to which sub-paragraph (b) applies, at its current market or surrender value less—

• (i) where there would be expenses attributable to sale, 10 per cent; and

• (ii) the amount of any incumbrance secured on it;

• (b) in the case of a National Savings Certificate—

• (i) if purchased from an issue the sale of which ceased before 1st July last preceding the date of claim, at the price which it would have realised on that 1st July had it been purchased on the last day of that issue;

• (ii) in any other case, at its purchase price.

Calculation of capital outside the United Kingdom

33

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 incumbrance secured on it.

Notional capital

34

• (1) A claimant shall be treated as possessing capital of which he has deprived himself for the purpose of securing entitlement to working families' tax credit or increasing the amount of that benefit except—

• (a) where that capital is derived from a payment made in consequence of any personal injury and is placed on trust for the benefit of the claimant; or

• (b) to the extent that the capital which he is treated as possessing is reduced in accordance with regulation 34A (diminishing notional capital rule); or

• (c) any sum to which paragraph 46(a) or 47(a) of Schedule 3 (disregard of compensation for personal injuries which is administered by the Court) refers,

• (2) Except in the case of—

• (a) a discretionary trust;

• (b) a trust derived from a payment made in consequence of a personal injury; or

• (c) any loan which would be obtainable only if secured against capital disregarded under Schedule 3; or

• (d) a personal pension scheme or retirement annuity contract,

• (e) any sum to which paragraph 46(a) or 47(a) of Schedule 3 (disregard of compensation for personal injuries which is administered by the Court) refers,

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.

• (3) Any payment of capital, other than a payment of capital specified in paragraph (3A) of those Regulations made—

• (a) to a third party in respect of a member of the family (but not a member of the third party’s family) shall be treated as possessed by that member of the family to the extent that it is used for his food, ordinary clothing or footwear, household fuel ... or housing costs or is used for any personal community charge, collective community charge contribution or council tax for which that member is liable; and in this sub-paragraph the expression “ordinary clothing or footwear” means clothing or footwear for normal daily use, but does not include school uniforms, or clothing or footwear used solely for sporting activities;

• (b) to 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 member to the extent that it is kept by him or used on behalf of any member of the family.

• (3A) Paragraph (3) shall not apply in respect of a payment of capital made—

• (a) under the Macfarlane Trust, the Macfarlane (Special Payments) Trust, the Macfarlane (Special Payments) (No.2) Trust, the Fund, the Eileen Trust or the Independent Living Funds; or

• (b) pursuant to section 2 of the Employment and Training Act 1973 in respect of a person’s participation—

• (i) in an employment programme specified in regulation 75(1)(a)(ii);

• (ii) in a training scheme specified in regulation 75(1)(b)(ii); or

• (iia) in the Intensive Activity Period specified in regulation 75(1)(a)(iv) of those Regulations or in the Intensive Activity Period for 50 plus; or

• (iii) in a qualifying course within the meaning specified in regulation 17A(7).

• (4) 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 shall 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 29 (calculation of capital), be disregarded; and

• (b) he shall, subject to paragraph (5), 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 Chapter shall apply for the purposes of calculating that amount as if it were actual capital which he does possess.

• (5) 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 (4) shall be disregarded.

• (6) Where a claimant is treated as possessing capital under any of paragraphs (1) to (4) the foregoing provisions of this Chapter shall apply for the purposes of calculating its amount as if it were actual capital which he does possess.

• (7) For the avoidance of doubt a claimant is to be treated as possessing capital under paragraph (1) only if the capital of which he has deprived himself is actual capital.

Capital jointly held

35

Except where a claimant possesses capital which is disregarded under regulation 34(4) (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 Chapter 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 capital

36

• (1) Where the claimant's capital calculated in accordance with this Chapter exceeds £3,000, it shall be treated as equivalent to a weekly income of £1 for each complete £250 in excess of £3,000 but not exceeding £8,000.

• (2) Notwithstanding paragraph (1), where any part of the excess is not a complete £250 that part shall be treated as equivalent to a weekly income of £1.

• (3) For the purposes of paragraph (1), capital includes any income treated as capital under regulation 31 (income treated as capital).

CHAPTER VII — STUDENTS

Interpretation

37

In this Chapter, unless the context otherwise requires—

• “access fund payment” means a payment for further and higher education students made under section 7 or 68 of the Further and Higher Education Act 1992 or section 73 of the Education (Scotland) Act 1980;

• “a course of advanced education” means—a full-time course leading to a postgraduate degree or comparable qualification, a first degree or comparable qualification, a diploma of higher education, a higher national diploma, a higher national diploma or higher national certificate of either the Business & Technology Education Council or the Scottish Vocational Education Council or a teaching qualification; orany other full-time course which is a course of a standard above ordinary national diploma, a national diploma or national certificate of either the Business & Technology Education Council or the Scottish Vocational Education Council, a general certificate of education (advanced level), a Scottish certificate of education (higher level) or a Scottish certificate of sixth year studies;

• “contribution” means any contribution in respect of the income of a student or of any other person which the Secretary of State, the Scottish Ministers or an education authority takes into account in assessing the amount of the student's grant or student loan; or any sums, which in determining the amount of the student’s allowance or bursary in Scotland in terms of the Students' Allowances (Scotland) Regulations 1996 or the Education Authority (Bursaries) (Scotland) Regulations 1995, the Scottish Ministers or education authority take into account being sums which the Scottish Ministers or the education authority consider that the holder of the allowance or bursary, the holder’s parents and the holder’s spouse can reasonably be expected to contribute towards the holder’s expenses;

• “course of study” means any ... course of study or sandwich course whether or not a grant is made for attending it;

• “covenant income” means the gross income payable to a student under a Deed of Covenant by a person whose income is, or is likely to be, taken into account in assessing the student's grant or award;

• “daily living costs” means food, ordinary clothing or footwear, household fuel or housing costs;

• “education authority” means a government department, a local authority as defined in section 579 of the Education Act 1996 (interpretation), an education authority as defined in section 135(1) of the Education (Scotland) Act 1980 (interpretation), an education and library board established under Article 3 of the Education and Libraries (Northern Ireland) Order 1986 , any body which is a research council for the purposes of the Science and Technology Act 1965 or any analogous government department, authority, board or body of the Channel Islands, Isle of Man or any other country outside Great Britain;

• “grant” means any kind of educational grant or award and includes any scholarship, studentship, exhibition, allowance or bursary but does not include a payment derived from funds made available by the Secretary of State or the Scottish Ministers for the purpose of assisting students in financial difficulties under section 100 of the Education Act 1944, sections 131 and 132 of the Education Reform Act 1988 or section 73 of the Education (Scotland) Act 1980;

• “grant income” means—any income by way of a grant;any contribution which has been assessed whether or not it has been paid,and any such contribution which is paid by way of a covenant shall be treated as part of the student's grant income;

• “last day of the course” means the date on which the last day of the final academic term falls in respect of the course in which the student is enrolled;

• “ordinary clothing or footwear” means clothing or footwear for normal daily use, but does not include school uniforms, or clothing or footwear used solely for sporting activities;

• “period of study” means—in the case of a course of study for one year or less, the period beginning with the start of the course and ending with the last day of the course,in the case of a course of study for more than one year, in the first or, as the case may be, any subsequent year of the course, other than the final year of the course, the period beginning with the start of the course or, as the case may be, that year's start and ending with either—the day before the start of the next year of the course in a case where the student's grant or loan is assessed at a rate appropriate to his studying throughout the year, or, if he does not have a grant or loan , where it would have been assessed at such a rate had he had one; orin any other case the day before the start of the normal summer vacation appropriate to his course;in the final year of a course of study of more than one year, the period beginning with that year’s start and ending with the last day of the course;

• “periods of experience” has the meaning prescribed in paragraph 1(1) of Schedule 5 to the Education (Mandatory Awards) Regulations 1998;

• “sandwich course” has the meaning given by regulation 5(2) of the Education (Student Support) Regulations 2000 or regulation 5(3) of the Education (Student Loans) (Scotland) Regulations 1999,

• “standard maintenance grant” means—except where paragraph (b) applies, in the case of a student attending a course of study at the University of London or an establishment within the area comprising the City of London and the Metropolitan Police District, the amount specified for the time being in paragraph 2(2)(a) of Schedule 2 to the Education (Mandatory Awards) Regulations 1998 for such a student; andin the case of a student residing at his parents' home, the amount specified in paragraph 3(2) thereof;in any other case, the amount specified in paragraph 2(2) other than in sub-paragraph (a) or (b) thereof;

• “student” means a person, other than a person in receipt of a training allowance, who is aged less than 19 and attending a full-time course of advanced education or, as the case may be, who is aged 19 or over and attending a ... course of study at an educational establishment; and for the purposes of this definition—a person who has started on such a course shall be treated as attending it ... until the last day of the course or such earlier date as he abandons it or is dismissed from it;a person on a sandwich course shall be treated as attending a full-time course of advanced education or, as the case may be, of study;

• “student loan” means a loan towards a student’s maintenance pursuant to any regulations made under section 22 of the Teaching and Higher Education Act 1998, section 73 of the Education (Scotland) Act 1980 or Article 3 of the Education (Student Support) (Northern Ireland) Order 1998;

• “year”, in relation to a course, means the period of 12 months beginning on 1st January, 1st April, 1st July or 1st September according to whether the academic year of the course begins in the winter, the spring, the summer or the autumn respectively, but if students are required to begin attending the course during August or September and to continue attending through the autumn the academic year of the course shall be considered to begin in the autumn rather than the summer.

Calculation of grant income

38

• (1) The amount of a student's grant income to be taken into account shall, subject to paragraphs (2) , (2A) and (2B), be the whole of his grant income.

• (2) There shall be disregarded from a student's grant income any payment—

• (a) intended to meet tuition fees or examination fees;

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (c) intended to meet additional expenditure incurred by a disabled student in respect of his attendance on a course;

• (d) intended to meet additional expenditure connected with term time residential study away from the student's educational establishment;

• (e) on account of the student maintaining a home at a place other than that at which he resides during his course;

• (f) intended to meet the cost of books and equipment ... ...;

• (g) intended to meet travel expenses incurred as a result of his attendance on the course.

• (h) that is an access fund payment and is intended to be used for any item other than daily living costs of any member of the student’s family or is used for any personal community charge, collective community charge contribution or council tax for which any member of that family is liable.

• (j) that is made in respect of childcare costs pursuant to—

• (i) sections 5, 6 and 9 of the Learning and Skills Act 2000;

• (ii) section 4 of the Further Education and Higher Education (Scotland) Act 1992;

• (iii) Article 5 of the Further Education (Northern Ireland) Order 1997;

• (iv) the Education (Student Support) Regulations 2001;

• (v) the Students' Allowances (Scotland) Regulations 1999; or

• (vi) the Education (Student Support) Regulations (Northern Ireland) 2001;

provided that the claimant’s award does not include an amount of childcare tax credit under regulation 46(1)(ab).

• (2A) Where a student does not have a student loan and is not treated as possessing such a loan, there shall be excluded from the student’s grant income—

• (a) the sum of £265 in respect of travel costs; and

• (b) where no amount has been disregarded under sub-paragraph (2)(f), the sum of £327 towards the cost of books and equipment,

whether or not any such costs are incurred.

• (2B) There shall be disregarded from a student’s grant income £20 of any weekly access fund payment used for daily living costs of any member of the student’s family or, where any access fund payment so used covers a period of more than a week, £20 for each complete week covered by the payment.

• (3) A student's grant income shall, subject to paragraph (4), be apportioned equally between the weeks in the period of 52 weeks beginning with the start of the academic year in respect of which the grant is payable.

• (3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) In the case of a student on a sandwich course, any periods of experience within the period of study shall be excluded and the student's grant income shall be apportioned equally between the remaining weeks in that period.

Calculation of covenant income where a contribution is assessed

39

• (1) Where a student is in receipt of income by way of a grant during a period of study and a contribution has been assessed, the amount of his covenant income to be taken into account shall be the whole amount of his covenant income less, subject to paragraph (3), the amount of the contribution.

• (2) The weekly amount of the student's covenant income shall be determined—

• (a) by dividing the amount of income which falls to be taken into account under paragraph (1) by 52; and

• (b) by disregarding from the resulting amount, £5.

• (3) For the purposes of paragraph (1), the contribution shall be treated as increased by the amount, if any, by which the amount excluded under regulation regulation 38(2)(g) (calculation of grant income) falls short of the amount specified in paragraph 7(4)(i) of Schedule 2 to the Education (Mandatory Awards) Regulations 1991 (travel expenditure).

Covenant income where no grant income or no contribution is assessed

40

• (1) Where a student is not in receipt of income by way of a grant the amount of his covenant income shall be calculated as follows—

• (a) any sums intended for any expenditure specified in regulation 38(2)(a) to (e) (calculation of grant income), necessary as a result of his attendance on the course, shall be disregarded;

• (b) any covenant income, up to the amount of the standard maintenance grant, which is not so disregarded shall be apportioned equally between the weeks of the period of study and there shall be disregarded from the covenant income to be so apportioned the amount which would have been disregarded under regulation 38(2)(f) and (g) and (2A) had the student been in receipt of the standard maintenance grant; and

• (c) the balance, if any, shall be divided by 52 and treated as weekly income of which £5 shall be disregarded.

• (2) Where a student is in receipt of income by way of a grant and no contribution has been assessed, the amount of his covenant income shall be calculated in accordance with sub-paragraphs (a) to (c) of paragraph (1), except that—

• (a) the value of the standard maintenance grant shall be abated by the amount of his grant income less an amount equal to the amount of any sums disregarded under regulation 38(2)(a) to (e); and

• (b) the amount to be disregarded under paragraph (1)(b) shall be abated by an amount equal to the amount of any sums disregarded under regulation 38(2)(f) and (g) and (2A).

Relationship with amounts to be disregarded under Schedule 2

41

No part of a student's covenant income or grant income shall be disregarded under paragraph 13 of Schedule 2 and any other income to which sub-paragraph (1) of that paragraph applies shall be disregarded thereunder only to the extent that the amount disregarded under regulation 39(2)(b) (calculation of covenant income where a contribution is assessed) or, as the case may be, 40(1)(c) (covenant income where no grant income or no contribution is assessed) is less than £20.

Other amounts to be disregarded

42

For the purposes of ascertaining income other than grant income, covenant income and loans treated as income in accordance with regulation 42A, any amounts intended for any expenditure specified in regulation 38(2) (calculation of grant income) necessary as a result of his attendance on the course shall be disregarded but only if, and to the extent that, the necessary expenditure exceeds or is likely to exceed the amount of the sums disregarded under regulation 38(2) and (2A), 39(3) , 40(1)(a) or (b) and 42A(5) (calculation of grant income, covenant income and treatment of student loans) on like expenditure.

Disregard of contribution

43

Where the claimant or his partner is a student and , for the purposes of assessing a contribution to the student’s grant or student loan, the other partner’s income has been taken into account, an amount equal to that contribution shall be disregarded for the purposes of assessing that other partner’s income.

Disregard of tax refund

44

Any amount by way of a refund of tax deducted from a student's covenant income shall be disregarded in calculating the student's income or capital.

Disregard of changes occurring during summer vacation

45

In calculating a student's income there shall be disregarded any change in the standard maintenance grant occurring in the recognised summer vacation appropriate to the student's course, if that vacation does not form part of his period of study, from the date on which the change occurred to the end of that vacation.

PART V — CALCULATION OF ENTITLEMENT

Determination of appropriate maximum family credit

46

• (1) Subject to paragraphs (2) to (7) of this regulation, the appropriate maximum working families' tax credit shall be the aggregate of the following credits—

• (a) in respect of a claimant or, if he is a member of a married or unmarried couple, in respect of the couple, the credit specified in column (2) of the table in Schedule 4 at paragraph 1;

• (b) in respect of a lone parent who works, or in respect of a claimant who is a member of a married or unmarried couple either or both of whom work, for not less than 30 hours per week, the credit specified in column (2) of the table in Schedule 4 at paragraph 2;

• (c) in a case to which regulation 46(A) applies, a credit (“childcare tax credit”) equal to 70 per cent. of the amount of any relevant childcare charges as mentioned and calculated on a weekly basis in regulation 46A, subject to a maximum in respect of the claimant’s family of whichever the amounts specified in paragraph (1A) applies in the claimant’s case;

• (d) in respect of a lone parent to whom paragraph (1D) applies, or, where the claimant is a member of a married or unmarried couple to either or both of whom paragraph (1D) applies, in respect of the couple, the credit specified in column (2) of the table in Schedule 4 at paragraph 3;

• (e) in respect of any child or young person for whom the claimant or his partner is treated as responsible by virtue of regulation 7, the credit specified in column (2) of the table in Schedule 4 at paragraph 4 or 5 as appropriate in respect of the period specified in that paragraph;

• (f) in respect of any child or young person for whom the claimant or his partner is treated as responsible by virtue of regulation 7 and who is a member of the claimant’s household—

• (i) where paragraph (1B) applies, and paragraph (1D) does not apply, to the child or young person, the credit specified in column (2) of the table in Schedule 4 at paragraph 6(a);

• (ii) where paragraph (1D) applies to the child or young person, the credit specified in column (2) of that table at paragraph 6(b).

• (1A) The maximum amount to which paragraph (1)(c) refers shall be–

• (a) where the claimant’s family includes only one child in respect of whom relevant childcare charges are paid, £135 per week;

• (b) where the claimant’s family includes more than one child in respect of whom relevant childcare charges are paid, £200 per week.

• (1B) This paragraph applies to a child or young person ...—

• (a) in respect of whom disability living allowance is payable, or has ceased to be payable solely because he is a patient; or

• (b) who is registered as blind in a register compiled by a local authority under section 29 of the National Assistance Act 1948 (welfare services) or, in Scotland, has been certified as blind in a register maintained by or on behalf of a regional or islands council; or

• (c) who ceased to be registered as blind in such a register within the 28 weeks immediately preceding the date of claim.

• (1C) For the purposes of paragraph (1B)(a), “patient” has the same meaning as in regulation 8(3)(a).

• (1D) This paragraph applies to either of the following persons—

• (a) a person in respect of whom the care component of disability living allowance is, or would but for either a suspension of benefit in accordance with regulations under section 113(2) of the Contributions and Benefits Act or an abatement as a consequence of hospitalisation, be payable at the highest rate prescribed under section 72(3) of that Act, and

• (b) a person in respect of whom attendance allowance is, or would but for either a suspension of benefit in accordance with regulations under section 113(2) of that Act or an abatement as a consequence of hospitalisation, be payable at the higher rate referred to in section 65(3) of that Act.

• (2) Where a claimant or, as the case may be, the partner of a claimant is married polygamously to two or more members of the same household, the maximum amount shall include, in respect of every such member but the first, an additional credit which equals the credit specified in column (2) of the table in Schedule 4 at paragraph 5 .

• (a) in the case of a person aged less than 18 years, the credit specified in column (2) of Schedule 4 against paragraph 3(a) in column (1); or

• (b) in any other case, the credit specified in column (2) of Schedule 4 against paragraph 3(b) in column (1).

• (3) For the purposes of paragraph (2), a person shall not be treated as a member of the same household as someone to whom he is married polygamously if he would not be so treated in the case of a monogamous marriage.

• (4) Where the capital of a child or young person, if calculated in accordance with Part IV (income and capital) in like manner as for the claimant, except as provided in regulation 27(1) (modifications in respect of children and young persons), would exceed £3,000, the credit in respect of that child or young person shall be nil.

• (5) Where the income of a child or young person, other than income consisting of payments of maintenance whether under a court order or not, calculated in accordance with Part IV, exceeds the amount or amounts specified for that child or young person in Schedule 4, the credit in respect of that child or young person shall be nil.

• (6) Where a child or young person is, for the purposes of regulation 8(2)(a) (membership of the same household), a patient or in residential accommodation on account of physical or mental handicap or physical or mental illness and has been so accommodated for the 52 weeks immediately before the date of claim, the credit in respect of that child or young person shall be nil.

• (7) For the purposes of this regulation the amount of any credit and the period during which that amount is appropriate in respect of any child or young person shall be determined by reference to the credit specified in Schedule 4 and the relevant period which includes the date on which the period under section 128(3) of the Contributions and Benefits Act (period of award) begins.

Applicable amount of family credit

47

• (1) The applicable amount for the purposes of section 20(5)(a) of the Act (conditions of entitlement to working families' tax credit) shall be £94.50 per week.

• (2) For the purposes of section 20(5A) of the Act (date on which applicable amount is to be determined) the prescribed date is the date on which the period under section 20(6) of the Act (period of the award) begins.

Entitlement to family credit where income exceeds the applicable amount

48

The prescribed percentage for the purpose of section 21(3) of the Act (percentage of excess of income over applicable amount which is deducted from maximum working families' tax credit) shall be 55 per cent.

PART VI — CHANGES OF CIRCUMSTANCES

Death of claimant

49

• (1) Except as provided in paragraph (2), an award of working families' tax credit shall cease to have effect upon the death of the claimant.

• (2) Where a claimant dies and is survived by a partner who was the claimant's partner at the date of claim, an award of family credit made in the claimant's favour shall have effect for its unexpired period as if originally made in favour of the partner.

Prevention of duplication of awards of family credit and income support

50

Where provision is made for the same child or young person in awards for overlapping periods, the first being an award of working families' tax credit and the second an award of working families' tax credit, income support , income-based jobseeker’s allowance or disabled person’s tax credit, and at the start of the period of overlap that child or young person is no longer a member of the household of the claimant under the first award, the first award shall terminate with effect from the start of the period of overlap.

Overlapping awards of family credit

51

• (1) An award of working families' tax credit (the new award) which is made in consequence of a claim in respect of a period beginning before the commencement of an existing award of working families' tax credit (the existing award) and which overlaps with the period of the existing award, shall be treated as a relevant change of circumstances affecting the existing award and the existing award shall be superseded and shall terminate with effect from the date on which the decision of the adjudication officer making the new award is notified to the claimant.

• (2) An award of disabled person’s tax credit which is made in consequence of a claim in respect of a period beginning on or before the commencement of an existing award of working families' tax credit (the existing award) and which overlaps with the period of the existing award, shall be treated as a change of circumstances affecting the existing award and the existing award shall be superseded and shall terminate with effect from the date on which the decision of the adjudication officer awarding disabled person’s tax credit is notified to the claimant.

SCHEDULE 1 — SUMS TO BE DISREGARDED IN THE CALCULATION OF EARNINGS

1

Any earnings derived from employment which are payable in a country outside the United Kingdom where there is a prohibition against the transfer to the United Kingdom of those earnings.

2

Any earnings of a child or young person.

3

Where a payment of earnings is made in a currency other than sterling, any banking charge or commission payable in converting that payment to sterling.

SCHEDULE 2 — SUMS TO BE DISREGARDED IN THE CALCULATION OF INCOME OTHER THAN EARNINGS

1

Any amount paid by way of tax on income which is taken into account under regulation 24 (calculation of income other than earnings).

2

Any payment in respect of any expenses incurred by a claimant who is—

• (a) engaged by a charitable or voluntary organisation; or

• (b) a volunteer,

if he otherwise derives no remuneration or profit from the employment and is not to be treated as possessing any earnings under regulation 26(4) (notional income).

3

Any housing benefit , income-based jobseeker’s allowance or income support.

4

Any mobility allowance , disability living allowance or disabled person’s tax credit.

5

Any concessionary payment made to compensate for the non-payment of—

• (a) any payment specified in paragraph 4 or 7;

• (b) income support or income-based jobseeker’s allowance.

6

Any mobility supplement or any payment intended to compensate for the non-payment of such a supplement.

7

Any payment which is—

• (a) an attendance allowance under section 35 of the Social Security Act ;

• (b) an increase of disablement pension under sections 61 or 63 of that Act ;

• (c) a payment made under regulations made in exercise of the power conferred by section 159(3)(b) of that Act;

• (d) an increase of allowance payable in respect of constant attendance under section 5 of the Industrial Injuries and Diseases (Old Cases) Act 1975 ;

• (e) payable by virtue of articles 14, 15, 16, 43 or 44 of the Personal Injuries (Civilians) Scheme 1983 or any analogous payment; or

• (f) a payment based on need for attendance which is paid as part of a war disablement pension.

8

Any payment to the claimant as holder of the Victoria Cross or of the George Cross or any analogous payment.

9

Any–

• (a) education maintenance allowance payable by virtue of regulations made under section 518 of the Education Act 1996 (payment of school expenses; grant of scholarships etc. ); or

• (b) sum (not being an allowance coming within (a)) in respect of a course of study attended by a child or young person payable by virtue of regulations made under section 518 of the Education Act 1996, section 49 of the Education (Scotland) Act 1980 (power to assist persons to take advantage of educational facilities) or section 12(2)(c) of the Further and Higher Education (Scotland) Act 1992 (provisions of financial assistance to students).

10

In the case of a student, any sums intended for any expenditure specified in paragraph (2) of regulation 38 (calculation of grant income) necessary as a result of his attendance on his course.

11

In the case of a claimant participating in arrangements for training made under section 2 of the Employment and Training Act 1973 or section 2 of the Enterprise and New Towns (Scotland) Act 1990 or attending a course at an employment rehabilitation centre established under that section of the 1973 Act—

• (a) any travelling expenses reimbursed to the claimant;

• (b) any living away from home allowance under section 2(2)(d) of the 1973 Act or section 2(4)(c) of the 1990 Act ;

• (c) any training premium,

• (d) any child care expenses reimbursed to the claimant in respect of his participation in a New Deal option, in the Intensive Activity Period specified in regulation 75(1)(a)(iv) of the Jobseeker’s Allowance Regulations 1996 or in the Intensive Activity Period for 50 plus,

12

Any Jobmatch Allowance payable pursuant to arrangements made under section 2(1) of the Employment and Training Act 1973 where the payments will cease by the date on which the period under section 128(3) of the Contributions and Benefits Act (period of award) is to begin.

13

• (1) Except where sub-paragraph (2) applies and subject to sub-paragraph (3) and paragraphs 29 and 34, £20 of any charitable payment or of any voluntary payment made or due to be made at regular intervals.

• (2) Subject to sub-paragraph (3) and paragraph 34, any charitable payment or voluntary payment made or due to be made at regular intervals which is intended and used for an item other than food, ordinary clothing or footwear, household fuel or housing costs of any member of the family or is used for any personal community charge, collective community charge contribution or council tax for which any member of the family is liable.

• (3) Sub-paragraphs (1) and (2) shall not apply to a payment which is made or due to be made by–

• (a) a former partner of the claimant, or a former partner of any member of the claimant’s family; or

• (b) the parent of a child or young person where that child or young person is a member of the claimant’s family.

• (4) For the purposes of sub-paragraph (1) where a number of charitable or voluntary payments fall to be taken into account they shall be treated as though they were one such payment.

• (5) For the purposes of sub-paragraph (2) the expression “ordinary clothing or footwear” means clothing or footwear for normal daily use, but does not include school uniforms, or clothing or footwear used solely for sporting activities.

14

Subject to paragraph 29, £10 of any of the following, namely—

• (a) a war disablement pension (except insofar as such a pension falls to be disregarded under paragraph 6 or 7);

• (b) a war widow’s or war widower's pension;

• (c) a pension payable to a person as a widow or widower under the Naval, Military and Air Forces Etc. (Disablement and Death) Service Pensions Order 1983 insofar as that Order is made under the Naval and Marine Pay and Pensions Act 1865 or the Pensions and Yeomanry Pay Act 1884, or is made only under section 12(1) of the Social Security (Miscellaneous Provisions) Act 1977 and any power of Her Majesty otherwise than under an enactment to make provision about pensions for or in respect of persons who have been disabled or have died in consequence of service as members of the armed forces of the Crown;

• (d) a payment made to compensate for the non-payment of such a pension as is mentioned in any of the preceding sub-paragraphs;

• (e) a pension paid by the government of a country outside Great Britain which is analogous to any of the pensions mentioned in sub-paragraphs (a) to (c) above;

• (f) a pension paid to victims of National Socialist persecution under any special provision made by the law of the Federal Republic of Germany, or any part of it, or of the Republic of Austria.

15

Any child benefit under Part I of the Child Benefit Act 1975 .

16

• (1) Any income derived from capital to which the claimant is, or is treated under regulation 35 (capital jointly held) as, beneficially entitled but, subject to sub-paragraph (2), not income derived from capital disregarded under paragraph 1, 2, 4, 6, 13 or 26 to 30 of Schedule 3.

• (2) Income derived from capital disregarded under paragraph 2, 4 or 26 to 30 of Schedule 3 but only to the extent of—

• (a) any mortgage repayments made in respect of the dwelling or premises in the period during which that income accrued; or

• (b) any council tax or water charges which the claimant is liable to pay in respect of the dwelling or premises and which are paid in the period during which that income accrued.

17

Where a person receives income under an annuity purchased with a loan which satisfies the following conditions—

• (a) that the loan was made as part of a scheme under which not less than 90 per cent of the proceeds of the loan were applied to the purchase by the person to whom it was made of an annuity ending with his life or with the life of the survivor of two or more persons (in this paragraph referred to as “the annuitants”) who include the person to whom the loan was made;

• (b) that the interest on the loan is payable by the person to whom it was made or by one of the annuitants;

• (c) that at the time the loan was made the person to whom it was made or each of the annuitants had attained the age of 65;

• (d) that the loan was secured on a dwelling in Great Britain and the person to whom the loan was made or one of the annuitants owns an estate or interest in that dwelling; and

• (e) that the person to whom the loan was made or one of the annuitants occupies the dwelling on which it was secured as his home at the time the interest is paid,

the amount, calculated on a weekly basis equal to—

• (i) where, or insofar as, section 369 of the Income and Corporation Taxes Act 1988 (mortgage interest payable under deduction of tax) applies to the payments of interest on the loan, the interest which is payable after deduction of a sum equal to income tax on such payments at the applicable percentage of income tax within the meaning of section 369(1A) of that Act;

• (ii) in any other case the interest which is payable on the loan without deduction of such a sum.

18

Any payment made to the claimant by a person who normally resides with the claimant, which is a contribution towards that person’s living and accommodation costs, except where that person is residing with the claimant in circumstances to which paragraph 19 or 40 or regulation 21(2) (earnings of self-employed earners) refers.

19

Where the claimant occupies a dwelling as his home and the dwelling is also occupied by another person and there is a contractual liability to make payments to the claimant in respect of the occupation of the dwelling by that person or a member of his family—

• (a) £4 of the aggregate of any payments made in respect of any one week in respect of the occupation of the dwelling by that person or a member of his family, or by that person and a member of his family; and

• (b) a further £9.25, where the aggregate of any such payments is inclusive of an amount for heating.

20

Any income in kind.

21

Any income which is payable in a country outside the United Kingdom where there is a prohibition against the transfer to the United Kingdom of that income.

22

• (1) Any payment made to the claimant in respect of a child or young person who is a member of his family—

• (a) in accordance with regulations made pursuant to section 57A of the Adoption Act 1976(permitted allowances) or with a scheme approved by the Secretary of State under section 51 of the Adoption (Scotland) Act 1978 (schemes for payment of allowances to adopters) or in accordance with an adoption allowance scheme made under section 71 of the Adoption and Children (Scotland) Act 2007 (adoption allowances schemes);

• (b) which is a payment made by a local authority in pursuance of section 15(1) of, and paragraph 15 of Schedule 1 to, the Children Act 1989 (local authority contribution to a child’s maintenance where the child is living with a person as a result of a residence order),

• (c) which is a payment made by an authority, as defined in Article 2 of the Children Order , in pursuance of Article 15 of, and paragraph 17 of Schedule 1 to, that Order (contribution by an authority to child’s maintenance);

to the extent specified in sub-paragraph (2).

• (2) In the case of a child or young person—

• (a) to whom regulation 27 applies (capital in excess of £3,000), the whole payment;

• (b) to whom that regulation does not apply, so much of the weekly amount of the payment as exceeds the credit in respect of that child or young person under Schedule 4.

23

Any payment made by a local authority to the claimant with whom a person is accommodated by virtue of arrangements made under section 23(2)(a) of the Children Act 1989 or, as the case may be, section 21 of the Social Work (Scotland) Act 1968 or by a voluntary organisation under section 59(1)(a) of the 1989 Act or by a care authority under regulation 9 of the Boarding Out and Fostering of Children (Scotland) Regulations 1985 (provision of accommodation and maintenance for children by local authorities and voluntary organisations).

24

Any payment made to the claimant or his partner for a person (“the person concerned”), who is not normally a member of the claimant’s household but is temporarily in his care, by—

25

Any payment made by a local authority in accordance with section 17, 23C, 24, 24A, or 24B of the Children Act 1989 or, as the case may be, section 12, 24 or 26 of the Social Work (Scotland) Act 1968 (provision of services for children and their families and advice and assistance to certain children).

26

Any payment of income which under regulation 31 (income treated as capital) is to be treated as capital.

27

Any maternity allowance under section 22 of the Social Security Act or statutory maternity pay under Part V of the Act.

28

Any payment under paragraph 2 of Schedule 6 to the Act (pensioners' Christmas bonus).

29

The total of a claimant's income or, if he is a member of a family, the family's income and the income of any person which he is treated as possessing under regulation 10(2) (calculation of income and capital of members of claimant's family and of a polygamous marriage) to be disregarded under regulation 39(2)(b) (calculation of covenant income where a contribution assessed), regulation 42A(2) (treatment of student loans) and paragraphs 13(1) and 14, shall in no case exceed £20 per week.

30

Where a payment of income is made in a currency other than sterling, any banking charge or commission payable in converting that payment into sterling.

SCHEDULE 3 — CAPITAL TO BE DISREGARDED

1

The dwelling, together with any garage, garden and outbuildings, normally occupied by the claimant as his home including any premises not so occupied which it is impracticable or unreasonable to sell separately, in particular, in Scotland, any croft land on which the dwelling is situated; but, notwithstanding regulation 10 (calculation of income and capital of members of claimant's family and of a polygamous marriage), only one dwelling shall be disregarded under this paragraph.

2

Any premises acquired for occupation by the claimant which he intends to occupy as his home within 26 weeks of the date of acquisition or such longer period as is reasonable in the circumstances to enable the claimant to obtain possession and commence occupation of the premises.

3

Any sum directly attributable to the proceeds of sale of any premises formerly occupied by the claimant as his home which is to be used for the purchase of other premises intended for such occupation within 26 weeks of the date of sale or such longer period as is reasonable in the circumstances to enable the claimant to complete the purchase.

4

Any premises occupied in whole or in part by a partner or relative (that is to say any close relative, grandparent, grandchild, uncle, aunt, nephew or niece) of any member of the family as his home, where that person is aged 60 or over or has been incapacitated for a continuous period of at least 13 weeks immediately preceding the date of the claim.

5

Any reversionary interest.

6

The assets of any business owned in whole or in part by the claimant and for the purposes of which he is engaged as a self-employed earner or, if he has ceased to be so engaged, for such period as may be reasonable in the circumstances to allow for disposal of any such asset.

7

Any sum attributable to the proceeds of sale of any asset of such a business which is re-invested or to be re-invested in the business within 13 weeks of the date of sale or such longer period as may be reasonable to allow for the re-investment.

8

Any arrears of, or any concessionary payment made to compensate for arrears due to non-payment of—

• (a) any payment specified in paragraphs 4, 6 or 7 of Schedule 2;

• (b) an income-related benefit or income-based jobseeker’s allowance, or supplementary benefit under the Supplementary Benefits Act 1976 , family income supplement under the Family Income Supplements Act 1970 or housing benefit under Part II of the Social Security and Housing Benefits Act 1982 ,

• (c) any earnings top-up,

but only for a period of 52 weeks from the date of the receipt of the arrears or of the concessionary payment.

9

Any sum—

• (a) paid to the claimant in consequence of damage to, or loss of, the home or any personal possession and intended for its repair or replacement; or

• (b) acquired by the claimant (whether as a loan or otherwise) on the express condition that it is to be used for effecting essential repairs or improvements to the home,

which is to be used for the intended purpose, for a period of 26 weeks from the date on which it was so paid or acquired or such longer period as is reasonable in the circumstances to enable the claimant to effect the repairs, replacement or improvements.

10

Any sum—

• (a) deposited with a housing association as defined in section 1(1) of the Housing Associations Act 1985 or section 338(1) of the Housing (Scotland) Act 1987 as a condition of occupying the home;

• (b) which was so deposited and which is to be used for the purchase of another home, for the period of 26 weeks or such longer period as is reasonable in the circumstances to complete the purchase.

11

Any personal possessions except those which have been acquired by the claimant with the intention of reducing his capital in order to secure entitlement to working families' tax credit or to increase the amount of that benefit.

12

The value of the right to receive any income under an annuity and the surrender value (if any) of such an annuity.

13

Where the funds of a trust are derived from a payment made in consequence of any personal injury to the claimant, the value of the trust fund and the value of the right to receive any payment under that trust.

14

The value of the right to receive any income under a life interest or from a liferent.

15

The value of the right to receive any income which is disregarded under paragraph 1 of Schedule 1 or 21 of Schedule 2.

16

The surrender value of any policy of life insurance.

17

Where any payment of capital falls to be made by instalments, the value of the right to receive any outstanding instalments.

18

Any payment made by a local authority in accordance with section 17, 23C, 24, 24A or 24B of the Children Act 1989 or, as the case may be, section 12, 24 or 26 of the Social Work (Scotland) Act 1968 (provision of services for children and their families and advice and assistance to certain children).

19

Any social fund payment made pursuant to Part III of the Act.

20

Any refund of tax which falls to be deducted under section 26 of the Finance Act 1982 (deductions of tax from certain loan interest) on a payment of relevant loan interest for the purpose of acquiring an interest in the home or carrying out repairs or improvements to the home.

21

Any capital which by virtue of regulations 25 (capital treated as income), 27(1) (modifications in respect of children and young persons) or 42A (treatment of student loans) is to be treated as income.

22

Where a payment of capital is made in currency other than sterling, any banking charge or commission payable in converting that payment to sterling.

SCHEDULE 4 — TABLE IN SCHEDULE 4 TO THE FAMILY CREDIT (GENERAL) REGULATIONS 1987 AS SUBSTITUTED BY THESE REGULATIONS

1

Adult.

2

Child—

3

Young person—

Signed

Signed by authority of the Secretary of State for Social Services.

Nicholas Scott — Minister of State, — 1987-11-20

Explanatory note

(This note is not part of the Regulations)

Footnotes

[^f00001]: 1986 c. 50; section 84(1) is an interpretation provision and is cited because of the meanings assigned to the words “prescribed” and “regulations”.

[^f00002]: 1975 c. 14; section 104(5) (relevant change of circumstances) is inserted by paragraph 10 of Schedule 5 to the Social Security Act 1986 and is applied to family credit by section 52 of that Act; section 166(3A) is inserted by section 62 of that Act, and section 166(1) to (3A) (extent of powers) is applied by section 83(1) of the Social Security Act 1986 to regulation-making powers conferred by that Act.

[^f00003]: 1975 c. 61.

[^f00004]: 1975 c. 14.

[^f00005]: Section 37A was inserted by section 22(1) of the Social Security Pensions Act 1975 (c. 60) and amended by the National Health Service Act 1977 (c. 49) Schedule 15 paragraph 64, the Social Security Act 1979 (c. 18) section 3 and by the Social Security Act 1986 (c. 50) sections 71 and 86 and Schedule 11.

[^f00006]: S.I. 1983/883; article 26A was added by S.I. 1983/1116 and amended by S.I. 1983/1521 and 1986/592.

[^f00007]: S.I. 1983/686, amended by S.I. 1983/1164, 1540 and 1986/628.

[^f00008]: 1975 c. 14.

[^f00009]: 1970 c. 10.

[^f00010]: 1975 c. 61, as amended by sections 4, 8 and 21 of, and Schedule 5 Part I to, the Social Security Act 1980 (c. 30) and by section 70 of the Social Security Act 1986 (c. 50).

[^f00011]: S.I. 1983/1964.

[^f00012]: S.I. 1984/988.

[^f00013]: S.I. 1975/555; the relevant amending instruments are S.I. 1977/1693 and 1987/1683.

[^f00014]: 1955 c. 18.

[^f00015]: 1955 c. 19.

[^f00016]: 1957 c. 53.

[^f00017]: 1958 c. 5.

[^f00018]: 1958 c. 40.

[^f00019]: 1958 c. 65.

[^f00020]: 1968 c. 49.

[^f00021]: 1969 c. 46.

[^f00022]: 1969 c. 54.

[^f00023]: 1973 c. 18.

[^f00024]: 1973 c. 29.

[^f00025]: 1975 c. 72.

[^f00026]: 1978 c. 22.

[^f00027]: 1978 c. 28.

[^f00028]: 1980 c. 5.

[^f00029]: 1980 c. 6.

[^f00030]: 1948 c. 29; section 21 was amended by the Local Government Act 1972 (c. 70), Schedule 23 paragraphs 1 and 2 and Schedule 30; the National Health Service Reorganisation Act 1973 (c. 32), Schedule 4 paragraph 44 and Schedule 5; the Housing (Homeless Persons) Act 1977 (c. 48), Schedule; the National Health Service Act 1977 (c. 49), Schedule 15 paragraph 5; the Health Services Act 1980 (c. 53), Schedule 1 Part 1 paragraph 5. Section 22 was amended by the Social Work (Scotland) Act 1968 (c. 49), section 87(4) and Schedule 9 Part I; the Supplementary Benefits Act 1976 (c. 71) Schedule 7 paragraph 3; the Housing (Homeless Persons) Act 1977 (c. 48), Schedule; the Social Security Act 1980 (c. 30), section 20, Schedule 4 paragraph 2(1) and Schedule 5 Part II and the Health and Social Services and Social Security Adjudications Act 1983 (c. 41), section 20(1)(a). Section 24 was amended by the National Assistance (Amendment) Act 1959 (c. 30), section 1(1); the National Health Service (Scotland) Act 1972 (c. 58), Schedule 6 paragraph 82; the Local Government Act 1972 (c. 70), Schedule 23 paragraph 2; the National Health Service Reorganisation Act 1973 (c. 32), Schedule 4 paragraph 45 and the Housing (Homeless Persons) Act 1977 (c. 48), Schedule. Section 26 was amended by the Health Services and Public Health Act 1968 (c. 46), section 44 and Schedule 4 and the Social Work (Scotland) Act 1968 (c. 49) Schedule 9 Part I and applied by section 87(3); the Local Government Act 1972 (c. 70), Schedule 23 paragraph 2; the Housing (Homeless Persons) Act 1977 (c. 48), Schedule and the Health and Social Services and Social Security Adjudications Act 1983 (c. 41), section 20(1)(b).

[^f00031]: 1977 c. 49; paragraphs 1(2) and 2(5) of Schedule 8 were repealed by section 30 of, and Schedule 10 Part I to, the Health and Social Services and Social Security Adjudications Act 1983 (c. 41) and paragraphs 2(1) to (3) were amended by the Mental Health Act 1983 (c. 20) section 148 and Schedule 4.

[^f00032]: 1947 c. 27, as applied by section 1(4)(c) of the Social Work (Scotland) Act 1968 (c. 49); section 27 is continued in force for the purposes of section 1(4)(c) by paragraph 15 of Schedule 15 to the National Health Service (Scotland) Act 1978 (c. 29).

[^f00033]: 1968 c. 49.

[^f00034]: 1984 c. 36.

[^f00035]: 1977 c. 49; section 4 was amended by the Mental Health Act 1983 (c. 20) section 148, Schedule 4, paragraph 47.

[^f00036]: 1985 c. 6.

[^f00037]: 1978 c. 44; section 68(2) was amended by section 21 Schedule 3 paragraph 21 of the Employment Act 1982 (c. 46); section 71(2) was amended by the Employment Act 1982 (c. 46) sections 5 and 21 Schedule 3 paragraph 22 and Schedule 4.

[^f00038]: 1977 c. 5; section 18(2) was amended by section 159 Schedule 16 paragraph 29 of the Employment Protection (Consolidation) Act 1978 (c. 44) and by section 86(2) of, and Schedule 10 Part IV paragraph 75 and Schedule 11 to, the Social Security Act 1986 (c. 50).

[^f00039]: 1982 c. 24.

[^f00040]: See sections 1 and 4 of the Social Security Act 1975 (c. 14); section 1 was amended by section 40 of the Employment Protection Act 1975 (c. 71), section 24 of, and Schedule 2 to, the Social Security (Miscellaneous Provisions) Act 1977 (c. 5), section 2 of the Social Security (Contributions) Act 1982 (c. 2), section 29 of, and paragraph 5 of Schedule 5 to, the Social Security Act 1985 (c. 53), section 86 of, and Schedule 11 to, the Social Security Act 1986 (c. 50) and S.I. 1987/48; section 4 was amended by paragraph 36 of Schedule 4 to the Social Security Pensions Act 1975 (c. 60), section 2(4) of the Education (School-Leaving Dates) Act 1976 (c. 5), section 14(1) of the Social Security Act 1979 (c. 18), Schedule 5 of the Social Security and Housing Benefits Act 1982 (c. 24), sections 7(1) and (2) and 8(1) of the Social Security Act 1985, sections 74(1)(a) and (2) and 86 of, and paragraph 104 of Schedule 10 to, the Social Security Act 1986 and S.I. 1986/25 and 1987/46.

[^f00041]: 1970 c. 10; section 8(1) was amended by the Finance Act 1971 (c. 68) section 37, Schedule 6 paragraphs 1 and 5, and by the Finance Act 1985 (c. 54) section 36; subsection (1A) was added by the Finance (No. 2) Act 1975 (c. 45) section 31 and amended by the Finance Act 1977 (c. 36) section 22. Subsection (1B) was added by the Finance (No. 2) Act 1975, section 31. Section 8(2) was amended by the Finance Act 1971 section 37, Schedule 6 paragraphs 1 and 5 and by article 2 of S.I. 1985/430; sub-paragraph (b) was substituted by the Finance (No. 2) Act 1979 (c. 47) section 12, Schedule 2 paragraph 1; sub-paragraphs (b)(i) and (ii) were amended by the Finance Act 1981 (c. 35), section 139, Schedule 19 Part VI and the Finance Act 1982 (c. 39) section 157, Schedule 22 Part IV; sub-paragraph (b)(iii) was added by the Finance Act 1981 section 27 and sub-paragraph (b)(iv) by the Finance Act 1987 (c. 16) section 27. Section 14(1) was amended by the Finance Act 1970 (c. 24) section 14, Schedule 8 Part VI; section 14(2) was amended by the Finance Act 1976 (c. 40) section 36, the Finance (No. 2) Act 1979, section 11, Schedule 1 paragraph 2 and the Finance Act 1980 (c. 48) section 24.

[^f00042]: 1973 c. 50; section 2 was amended by sections 9 and 11 and Schedule 2, Part II, paragraph 9 and Schedule 3 of the Employment and Training Act 1981 (c. 57).

[^f00043]: S.I. 1975/529.

[^f00044]: Section 7(1) was amended by section 2(4) of the Education (School-Leaving Dates) Act 1976 (c. 5), section 17(1) of the Health and Social Security Act 1984 (c. 48) article 3 of S.I. 1986/25 and article 3 of S.I. 1987/46.

[^f00045]: Section 7(5) was amended by article 3 of S.I. 1986/25 and S.I. 1987/46.

[^f00046]: Section 9 was amended by sections 4 and 65 of, and Schedule 5 to, the Social Security Pensions Act 1975 (c. 60), by the Social Security Contributions Act 1982 (c. 2) section 1 and S.I. 1986/25.

[^f00047]: The benefit Acts are specified in section 84(1) of the Social Security Act 1986 (c. 50).

[^f00048]: 1944 c. 31, as amended by S.I. 1974/595 article 3(22) Schedule 1 Part I and S.I. 1977/293, article 4(1).

[^f00049]: 1980 c. 44.

[^f00050]: S.I. 1986/594 (NI 3).

[^f00051]: 1965 c. 4.

[^f00052]: S.I. 1987/1261.

[^f00053]: 1975 c. 14; section 35 was amended by the National Health Service Act 1977 (c. 49) Schedule 15 paragraph 63, and by the Social Security Act 1979 (c. 18) section 2 and by the Social Security Act 1980 (c. 30) Schedule 1 Part II paragraph 8.

[^f00054]: Subsections (3) and (4) of section 61 were added by the Social Security Act 1986 (c. 50) section 39 and Schedule 3 paragraph 6.

[^f00055]: 1975 c. 16.

[^f00056]: S.I. 1983/686, amended by S.I. 1983/1164 and 1984/1675.

[^f00057]: 1944 c. 31; section 81 was amended by S.I. 1984/490.

[^f00058]: 1962 c. 12; section 2(1) was substituted by section 19 of, and Schedule 5 to, the Education Act 1980 (c. 20).

[^f00059]: 1980 c. 44.

[^f00060]: 1973 c. 50; section 2 was amended by sections 9 and 11 of Schedule 2 Part II paragraph 9 and Schedule 3 of the Employment and Training Act 1981 (c. 57).

[^f00061]: 1975 c. 61.

[^f00062]: 1982 c. 39.

[^f00063]: 1958 (7—8 Eliz 2) c.5 section 50(4) was added by section 32 of the Children Act 1975 (c. 72).

[^f00064]: 1978 c. 28.

[^f00065]: 1975 c. 72, as amended by section 64 of the Domestic Proceedings and Magistrates' Courts Act 1978 (c. 22).

[^f00066]: 1980 c. 5, amended by section 9, Schedule 2, paragraph 49 of the Health and Social Services and Social Security Adjudications Act 1983 (c. 41).

[^f00067]: 1968 c. 49.

[^f00068]: S.I. 1985/1799.

[^f00069]: 1976 c. 71.

[^f00070]: 1970 c. 55.

[^f00071]: 1982 c. 24.

[^f00072]: 1985 c. 69.

[^f00073]: 1987 c. 26.

[^f00074]: 1982 c. 39.

Disapplication of section 1(1A) of the Administration Act

2A

Section 1(1A) of the Administration Act (requirement to state national insurance number) shall not apply—

• (a) to a child or young person in respect of whom working families' tax credit is claimed;

• (b) to any claim for working families' tax credit made or treated as made before 9th February 1998;

• (c) to a partner in respect of whom a claim for working families' tax credit is made or treated as made before 5th October 1998.

• (d) to a partner of a Crown servant posted overseas who has no national insurance number and is not a UK national.

Further provision as to remunerative work

4A

Whether, for the purposes of regulation 46(1)(aa) (determination of appropriate maximum working families' tax credit) and paragraph 1A of Schedule 4, the work a person undertakes is for not less than 30 hours per week shall be determined in accordance with regulation 4(1)(b), (3), (4) and (4A) except that for the words “16 hours” in paragraph (4) there shall be substituted the words “30 hours”.

Rounding of fractions

Treatment of child care charges

13A

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Normal weekly earnings of employed earners

Normal weekly earnings of directors

14A

• (1) Subject to paragraph (2) and regulation 17 (periods to be disregarded), where a claimant’s income includes earnings from employment as a director, his normal weekly earnings from that employment shall be determined by taking account of his earnings from that employment received in the year immediately preceding the week of claim, whether the amount so received was earned in respect of that period or not.

• (2) Where at the date of claim the claimant has been in employment as a director for less than a year, his normal weekly earnings from that employment shall be determined by taking account of his earnings from that employment received in the period that he has been in that employment and by reference to an estimate of the earnings likely to be received in the remainder of the first year of the employment.

Normal weekly earnings of self-employed earners

Normal weekly income other than earnings

Periods to be disregarded

Calculation of weekly amount of income

Calculation of net earnings of directors

20ZA

• (1) For the purposes of regulation 14A (normal weekly earnings of directors) the earnings of a claimant to be taken into account shall be his net earnings ... and those net earnings shall be determined in accordance with the following paragraphs.

• (2) There shall be disregarded from a claimant’s net earnings any sum, where applicable, specified in Schedule 1.

• (3) A claimant’s net earnings shall, except where paragraph (4) applies, be calculated by taking into account his gross earnings from that employment, less—

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

• (i) income tax;

• (ii) primary Class 1 contributions under the Contributions and Benefits Act; and

• (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.

• (4) Where some or all of the claimant’s earnings are estimated under regulation 14A(2), those net earnings shall be calculated by taking into account the estimated gross earnings, less—

• (a) an amount representing income tax, calculated by applying to those earnings the lower rate or, as the case may be, the lower rate and the basic rate of income tax in the year of assessment in which the claim was made, taking into account the personal relief to which the claimant would be entitled under sections 257(1), 257A(1) and 259 of the Income and Corporation Taxes Act 1988 (personal relief); except that if the period in respect of which the estimate is made is less than a year, the earnings to which the lower rate of tax is to be applied and the amount of the personal relief allowable under this sub-paragraph shall be reduced pro-rata;

• (b) where the weekly amount of those earnings equals or exceeds the lower earnings limit, an amount representing primary Class 1 contributions under the Contributions and Benefits Act, calculated by applying to those earnings the initial and main primary percentages applicable at the date of claim in accordance with section 8(1) (a) and (b) of that Act; 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.

Calculation of bonus or commission

20A

Where a claimant’s earnings include a bonus or commission to which paragraph (4) of regulation 14 (normal weekly earnings of employed earners) applies that part of his earnings shall be calculated by aggregating any payments of bonus or commission and deducting from it —

• (a) an amount in respect of income tax equivalent to an amount calculated by applying to that part of the earnings the basic rate of tax in the year of assessment in which the claim is made; and

• (b) an amount representing primary Class 1 contributions under the Contributions and Benefits Act, calculated by applying to that part of the earnings the main primary percentage applicable at the date of claim; and

• (c) one-half of any sum payable by the claimant in respect of that part of the earnings by way of a contribution towards an occupational pension scheme;

and dividing the resulting sum by 52.

Diminishing notional capital rule

34A

• (1) Where a claimant is treated as possessing capital under regulation 34(1) (notional capital), the amount which he is treated as possessing—

• (a) in the case of a benefit week which 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 benefit 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 entitled to working families' tax credit; and

• (b) but for regulation 34(1), he would have been entitled to an additional amount of working families' tax credit in that benefit 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 of working families' tax credit to which the claimant would have been entitled; and

• (b) if the claimant would, but for regulation 43(1) of the Housing Benefit (General) Regulations 1987 (notional capital), have been entitled to housing benefit or to an additional amount of housing benefit in respect of the benefit week in which the date of the last claim for working families' tax credit falls, the amount (if any) which is equal to–

• (i) in a case where no housing 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 housing benefit to which he would have been entitled; and

• (c) if the claimant would, but for regulation 33(1) of the Community Charge Benefits (General) Regulations 1989 (notional capital) have been entitled to community charge benefit or to an additional amount of community charge benefit in respect of the benefit week in which the date of the last claim for working families' tax credit falls, the amount (if any) which is equal to–

• (i) in a case where no community charge 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 community charge benefit to which he would have been entitled; and

• (d) if the claimant would, but for regulation 34(1) of the Council Tax Benefit (General) Regulations 1992 (notional capital), have been entitled to council tax benefit or to an additional amount of council tax benefit in respect of the benefit week in which the date of the last claim for working families' tax credit falls, the amount (if any) 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.

• (4) Subject to paragraph (5), for the purposes of paragraph (1)(b) the condition is that the claimant would have been entitled to working families' tax credit in the relevant week but for regulation 34(1) and in such a case the amount shall be equal to the aggregate of—

• (a) the amount of working families' tax credit to which the claimant would have been entitled in the relevant week but for regulation 34(1); and

• (b) if the claimant would, but for regulation 43(1) of the Housing Benefit (General) Regulations 1987 have been entitled to housing benefit or to an additional amount of housing benefit in respect of the benefit week in which the first day of the relevant week falls, the amount (if any) which is equal to–

• (i) in a case where no housing 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 housing benefit to which he would have been entitled; and

• (c) if the claimant would, but for regulation 33(1) of the Community Charge Benefits (General) Regulations 1989 have been entitled to community charge benefit or to an additional amount of community charge benefit in respect of the benefit week in which the first day of the relevant week falls, the amount (if any) which is equal to–

• (i) in a case where no community charge 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 community charge benefit to which he would have been entitled; and

• (d) if the claimant would, but for regulation 34(1) of the Council Tax Benefit (General) Regulations 1992 (notional capital), have been entitled to council tax benefit or to an additional amount of council tax benefit in respect of the benefit week in which the first day of the relevant week falls, the amount (if any) 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.

• (5) The amount determined under paragraph (4) shall be re-determined under that paragraph if the claimant makes a further claim for working families' tax credit and the conditions in paragraph (6) are satisfied, and in such a case—

• (a) sub-paragraphs (a), (b) and (c) 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 22 or more weeks after—

• (i) the first day of the relevant week;

• (ii) in a case where there has been at least one re-determination in accordance with paragraph (5), the first day of the relevant subsequent week which last occurred;

whichever last occurred; and

• (b) the claimant would have been entitled to working families' tax credit but for regulation 34(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 re-determination and in such a case the higher amount shall continue to have effect.

• (8) For the purposes of this regulation—

• (a) “benefit week” has the meaning prescribed in regulations 16 (date of entitlement under an award) and 27 (working families' tax credit) of the Social Security (Claims and Payments) Regulations 1987 except where it appears in paragraphs (3)(b), (c) and (d) and (4)(b), (c) and (d) where it has the meaning prescribed in regulation 2(1) of the Housing Benefit (General) Regulations 1987 (interpretation), regulation 2(1) of the Community Charge Benefits (General) Regulations 1989 (interpretation) or regulation 2(1) of the Council Tax Benefit (General) Regulations 1992 (interpretation) as the case may be;

• (b) “relevant week” means the benefit week in which the capital in question of which the claimant has deprived himself within the meaning of regulation 34(1)—

• (i) was for the first time taken into account for the purpose of determining his entitlement to working families' tax credit; or

• (ii) was taken into account on a subsequent occasion for that purpose other than in respect of either a benefit week to which paragraph (2) applies or a further claim to which paragraph (5) applies;

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;

• (c) “relevant subsequent week” means the benefit week in which any award of working families' tax credit in respect of the further claim referred to in paragraph (6)(a) would, but for regulation 34(1), have commenced, but it shall not be earlier than the twenty-seventh week after the week in which the existing amount took effect.

Capital jointly held

Calculation of tariff income from capital