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The Council Tax Reduction Schemes and Prescribed Requirements (Wales) Regulations 2013

Type Welsh-Statutory-Instrument

Publication 2013-11-27

Last updated 2026-01-26

State In force

Jurisdiction Wales

Department King's Printer of Acts of Parliament

Source legislation.gov.uk

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(ii) being a person with a Zambrano right to reside as defined in Annex 1 of Appendix EU to the immigration rules made under section 3(2) of that Act; or

(iii) article 3 (grant of leave to EEA and Swiss nationals) of the Immigration (European Economic Area Nationals) (EU Exit) Order 2019 made under section 3A of that Act.

(5) A person falls within this paragraph if the person is—

(a) a qualified person for the purposes of regulation 6 of the EEA Regulations as a worker or a self-employed person;

(b) a family member of a person referred to in sub-paragraph (a) within the meaning of regulation 7(1)(a), (b) or (c) of the EEA Regulations;

(c) a person who has a right to reside permanently in the United Kingdom by virtue of regulation 15(1)(c), (d) or (e) of the EEA Regulations;

(d) a person recorded by the Secretary of State as a refugee within the definition in Article 1 of the Convention relating to the Status of Refugees adopted at Geneva on 28 July 1951, as extended by Article 1(2) of the Protocol relating to the Status of Refugees adopted at New York on 31 January 1967;

(e) a person who has been granted, or who is deemed to have been granted, leave outside the rules made under section 3(2) of the Immigration Act 1971 where that leave is—

(i) discretionary leave to enter or remain in the United Kingdom,

(ii) leave to remain under the Migrant Victims of Domestic Abuse concession, ...

(iii) leave deemed to have been granted by virtue of regulation 3 of the Displaced Persons (Temporary Protection) Regulations 2005 , or

(iv) granted under the Afghan Citizens Resettlement Scheme;

(f) a person who has humanitarian protection granted under those rules;

(g) a person who is not a person subject to immigration control within the meaning of section 115(9) of the Immigration and Asylum Act 1999⁹⁹ and who is in the United Kingdom as a result of the person’s deportation, expulsion or other removal by compulsion of law from another country to the United Kingdom;

(h) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(j) in receipt of income support, an income-related employment and support allowance or universal credit;

(k) a person who is treated as a worker for the purposes of the definition of “qualified person” in regulation 6(1) of the EEA Regulations pursuant to regulation 5 of the Accession of Croatia (Immigration and Worker Authorisation) Regulations 2013 (right of residence of a Croatian who is an “accession State national subject to worker authorisation”) ... ; ...

(l) in receipt of an income-based jobseeker’s allowance and has a right to reside other than a right to reside falling within paragraph (4)(a) to (d) ;

(m) a person granted leave in accordance with the rules referred to in sub-paragraph (e), where such leave is granted by virtue of—

(i) the Afghan Relocations and Assistance Policy, or

(ii) the previous scheme for locally-employed staff in Afghanistan (sometimes referred to as the ex-gratia scheme); ...

(n) a person in Great Britain not coming within sub-paragraph (e)(iv) or (m) who left Afghanistan in connection with the collapse of the Afghan government that took place on 15 August 2021 ; ...

(o) a person in Great Britain who was residing in Ukraine immediately before 1 January 2022, left Ukraine in connection with the Russian invasion which took place on 24 February 2022 and—

(i) has been granted leave to enter or remain in the United Kingdom in accordance with immigration rules made under section 3(2) of the Immigration Act 1971; or

(ii) has a right of abode in the United Kingdom within the meaning given in section 2 of that Act;

(p) a person in Great Britain who was residing in Sudan before 15 April 2023, left Sudan in connection with the violence which rapidly escalated on 15 April 2023 in Khartoum and across Sudan and—

(i) has been granted leave in accordance with immigration rules made under section 3(2) of the Immigration Act 1971,

(ii) has a right of abode in the United Kingdom within the meaning given in section 2 of that Act, or

(iii) does not require leave to enter or remain in the United Kingdom in accordance with section 3ZA of that Act; ...

(q) a person in Great Britain who was residing in Israel, the West Bank, the Gaza Strip, East Jerusalem, the Golan Heights or Lebanon immediately before 7 October 2023, left Israel, the West Bank, the Gaza Strip, East Jerusalem, the Golan Heights or Lebanon in connection with the Hamas terrorist attack in Israel on 7 October 2023 or the violence which rapidly escalated in the region following the attack and—

(i) has been granted leave in accordance with immigration rules made under section 3(2) of the Immigration Act 1971,

(ii) has a right of abode in the United Kingdom within the meaning of section 2 of that Act, or

(iii) does not require leave to enter or remain in the United Kingdom in accordance with section 3ZA of that Act;

(r) a person who—

(i) was residing in Israel, the West Bank, the Gaza Strip or East Jerusalem on or before 23 June 2025,

(ii) left Israel, the West Bank, the Gaza Strip or East Jerusalem in connection with the conflict between Israel and Iran which escalated in June 2025,

(iii) arrived in Great Britain on or before 23 December 2025, and

(iv) satisfies one of the following criteria—

(aa) has been granted leave to enter or remain in the United Kingdom under or outside the rules made under section 3(2) of the Immigration Act 1971,

(bb) has a right of abode in the United Kingdom within the meaning of section 2 of that Act, or

(cc) in accordance with section 3ZA of that Act, does not require leave to enter or remain in the United Kingdom;

(s) a person who (but see paragraph (5A))—

(i) was residing in a country or territory outside Great Britain immediately before His Majesty’s Government—

(aa) provided public information to advise British nationals to leave that country or territory, or

(bb) arranged the evacuation of British nationals from that country or territory,

(ii) has left that country or territory and is present in Great Britain, and

(iii) has—

(aa) a right of abode in the United Kingdom within the meaning given in section 2 of the Immigration Act 1971,

(bb) no requirement of leave to enter or remain in the United Kingdom in accordance with section 3ZA of that Act,

(cc) leave to enter or remain in the United Kingdom in accordance with immigration rules made under section 3(2) of that Act, or

(dd) leave on a discretionary basis outside of rules made under section 3(2) of that Act;

(t) a person who, as part of a safe and legal humanitarian immigration route, has leave to enter the United Kingdom in accordance with immigration rules made under section 3(2) of the Immigration Act 1971 or leave on a discretionary basis outside those rules.

(5A) Sub-paragraph (s) of paragraph (5) does not apply after the expiry of 6 months beginning with the day on which the public information is issued, or the evacuation is started.

(6) A person falls within this paragraph if the person is a Crown servant or member of Her Majesty’s forces posted overseas.

(7) A person mentioned in paragraph (6) is posted overseas if the person is performing overseas the duties of a Crown servant or member of Her Majesty’s forces and was, immediately before the posting or the first of consecutive postings, habitually resident in the United Kingdom.

(8) In this regulation—

“claim for asylum” (“hawliad am loches”) has the same meaning as in section 94(1) of the Immigration and Asylum Act 1999¹⁰⁰;

“EEA Regulations” (“Rheoliadau AEE”) means the Immigration (European Economic Area) Regulations 2016.

Persons subject to immigration control

29

(1) The class of person described in this regulation consists of any person who is subject to immigration control.

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) “Person subject to immigration control” (“person sy’n ddarostyngedig i reolaeth fewnfudo”) has the meaning given in section 115(9) of the Immigration and Asylum Act 1999.

Persons whose capital exceeds £16,000

30

(1) The class of person described in this regulation consists of any person whose capital exceeds £16,000.

(2) Capital for the purposes of paragraph (1) is to be calculated in accordance with Schedule 1 (pensioners) or Schedule 6 (persons who are not pensioners).

Students

31

(1) The class of person described in this regulation consists of any person who is a student.

(2) In this regulation “student” (“myfyriwr”) has the meaning given by paragraph 1 of Part 1 of Schedule 11.

(3) Schedule 11, which contains matters that must be included in a scheme in respect of students has effect.

PART 5 — Other matters that must be included in an authority’s scheme

Provision for pensioners

32

(1) A scheme must make provision in respect of the classes of persons referred to in regulations 22 and 23 (classes A and B).

(2) Schedules 1 to 5, which contain matters that must be included in a scheme in respect of those classes of person, have effect.

(3) For the purposes of this regulation, the provisions in paragraph 33 of Schedule 1 (duration of extended reduction period) are minimum requirements.

Provision for persons who are not pensioners

33

(1) A scheme must make provision in respect of the classes of persons referred to in regulations 24 and 25 (classes C and D).

(2) Schedules 6 to 10, which contain matters that must be included in a scheme in respect of those classes of person, have effect.

(3) For the purposes of this regulation, the provisions in paragraphs 35 (duration of extended reduction period) and 40 (duration of extended reduction period (qualifying contributory benefits)) of Schedule 6 are minimum requirements.

Provision for pensioners and persons who are not pensioners

34

(1) A scheme must include the provisions set out within Schedules 12 to 14.

(2) The provisions mentioned in paragraph (1) must apply to all applications for a council tax reduction unless otherwise provided.

(3) Schedules 12 to 14, which contain matters that must be included in a scheme in respect of all applicants for a council tax reduction, unless otherwise provided, have effect.

(4) For the purposes of this regulation, the provisions in paragraphs 3 and 4 of Schedule 13 (backdating) are minimum requirements.

(5) For the purposes of this regulation, the amount to be disregarded in accordance with paragraph 1(a) and (b) of Schedule 4 (amounts to be disregarded for war disablement pension, war widow’s pension and war widower’s pension: pensioners) and paragraph 20(a) and (b) of Schedule 9 (amounts to be disregarded for war disablement pension, war widow’s pension and war widower’s pension; persons who are not pensioners) is a minimum amount.

PART 6 — Revocation, transitional and savings provisions

Interpretation

35

In this Part of the Regulations—

“2012 Regulations” (“Rheoliadau 2012”) means the Council Tax Reduction Schemes and Prescribed Requirements (Wales) Regulations 2012¹⁰¹;

“2013 scheme” (“cynllun 2013”) means a scheme made by a billing authority in accordance with the 2012 Regulations or which applies in default on 1 April 2013 in accordance with paragraph 6(1)(e) of Schedule 1B to the Local Government Finance Act 1992;

“relevant authority” (“awdurdod perthnasol”) means an authority administering a 2013 scheme or a scheme;

“scheme” (“cynllun”) means a scheme made by a billing authority in accordance with these Regulations or which applies in default on 1 April 2014 in accordance with paragraph 6(1)(e) of Schedule 1B to the Local Government Finance Act 1992.

Revocation and savings

36

(1) Subject to paragraph (2) the 2012 Regulations are revoked on 1 April 2014.

(2) The 2012 Regulations continue to apply to any applications made and any reductions awarded in accordance with the provisions of a 2013 scheme.

Persons to be treated as having made an application for a reduction

37

(1) A person who falls within one of the categories of person described in paragraph (2) is to be treated as having made an application for a reduction under a scheme on 15 February 2014.

(2) A person referred to in paragraph (1) is a person who—

(a) is in receipt of a reduction under a 2013 scheme on 15 February 2014;

(b) has made an application for a reduction under a 2013 scheme which is not determined immediately before 15 February 2014;

(c) has served a written notice upon a relevant authority regarding a decision of the authority in relation to a claim for a reduction under a 2013 scheme, and whose decision in respect of the written notice is pending immediately before 15 February 2014;

(d) has appealed to the Valuation Tribunal for Wales against a decision of a relevant authority in relation to a claim for a reduction under a 2013 scheme, and whose appeal or decision in respect of the appeal is pending immediately before 15 February 2014;

(e) has appealed against the decision of the Valuation Tribunal for Wales in relation to claim for a reduction under a 2013 scheme, and whose appeal is pending immediately before 15 February 2014.

(3) For the purposes of paragraph (2)(e) an appeal against a decision relating to a claim for a reduction under a 2013 scheme is pending if—

(a) an appeal against the decision has been brought but not determined; or

(b) an application for permission to appeal against the decision has been made but not determined.

Applications received between 15 February 2014 and 31 March 2014

38

A person who makes a claim for a reduction under a 2013 scheme on any day during the period beginning on 15 February 2014 and ending on 31 March 2014 is to be treated as having made an application for a reduction under a scheme on the same day.

Date on which change of circumstances is to take effect

39

(1) Where a person (P) by virtue of regulation 37(1) or 38 is treated as having made an application for a reduction under a scheme and—

(a) on 15 February 2014 P is, or on any day during the period beginning on 15 February 2014 and ending on 31 March 2014 becomes, a person to whom the relevant provisions apply; and

(b) the effective date for the change of circumstances in accordance with the relevant provisions is a date after 31 March 2014,

the application is to be determined as though the change of circumstances has not taken place, but is to be re-determined upon the effective date to take account of the change of circumstances.

(2) In paragraph (1) “relevant provisions” (“darpariaethau perthnasol”) means—

(a) a provision contained within a 2013 scheme by virtue of regulation 30(2) of, and paragraph 40(10) to (12) of Schedule 1 to, the 2012 Regulations (date on which change of circumstances is to take effect: pensioners);

(b) a provision contained within a 2013 scheme by virtue of regulation 31(2) of, and paragraph 46(10) to (12) of Schedule 6 to, the 2012 Regulations (date on which change of circumstances is to take effect: persons who are not pensioners); or

(c) paragraph 105(10) to (12) of the scheme prescribed in the Schedule to the Council Tax Reduction Schemes (Default Scheme) (Wales) Regulations 2012¹⁰² (date on which change of circumstances is to take effect).

Notification relating to change of circumstances

40

Where by virtue of regulation 37(1) or 38 a person is treated as having made an application under a scheme, the following provisions in a relevant authority’s scheme do not apply in relation to that person’s application—

(a) a provision contained in a scheme by virtue of regulation 33(3) of, and paragraph 1(7) of Schedule 13 to these Regulations (who may make an application); or

(b) paragraph 107(7) of the scheme prescribed in the Schedule to the Council Tax Reduction Schemes (Default Scheme) (Wales) Regulations 2013 (who may make an application).

SCHEDULE 1 — Determining eligibility for a reduction under an authority’s scheme, amount of reduction and calculation of income and capital: pensioners

PART 1 — Applicable amounts for the purposes of calculating eligibility for a reduction under an authority’s scheme and amount of reduction: pensioners

Applicable amounts: pensioners (including pensioners in polygamous marriages)

1

(1) The applicable amount for a pensioner for a week is the aggregate of such of the following amounts as apply in that person’s case—

(a) an amount in respect of the person’s personal allowance or if that person is a member of a couple, an amount in respect of both of them, determined in accordance with paragraph 1 of Schedule 2 (personal allowance);

(b) an amount in respect of any child or young person who is a member of the person’s family, determined in accordance with paragraph 2 of that Schedule (child or young person amounts);

(c) if the person is a member of a family of which at least one member is a child or young person, an amount determined in accordance with paragraph 3 of that Schedule (family premium);

(d) the amount of any premiums which may be applicable to the person, determined in accordance with Parts 3 and 4 of that Schedule (premiums).

(2) In Schedule 2—

“additional spouse” (“priod ychwanegol”) means a spouse of either party to the marriage who is additional to the other party to the marriage;

“patient” (“claf”) means a person (other than a person who is serving a sentence of imprisonment or detention in a youth custody institution) who is regarded as receiving free in-patient treatment within the meaning of regulation 2(4) and (5) of the Social Security (Hospital In-Patients) Regulations 2005¹⁰³.

PART 2 — Maximum council tax reduction for the purposes of calculating eligibility for a reduction under an authority’s scheme and amount of reduction: pensioners

Maximum council tax reduction under an authority’s scheme: pensioners

2

(1) Subject to sub-paragraphs (2) to (4), the amount of a person’s maximum council tax reduction in respect of a day is 100 per cent of the amount A/B where—

(a) A is the amount set by the authority as the council tax for the relevant financial year in respect of the dwelling in which the person is a resident and for which the person is liable, subject to any discount which may be appropriate to that dwelling under the 1992 Act; and

(b) B is the number of days in that financial year,

less any deductions in respect of non-dependants which fall to be made under paragraph 3 (non-dependant deductions: pensioners).

(2) In calculating a person’s maximum council tax reduction under an authority’s scheme any reduction in the amount that person is liable to pay in respect of council tax, which is made in consequence of any enactment in, or made under, the 1992 Act (other than a reduction under an authority’s scheme), is to be taken into account.

(3) Subject to sub-paragraph (4), where an applicant is jointly and severally liable for council tax in respect of a dwelling in which the applicant is resident with one or more other persons, in determining the maximum council tax reduction in the applicant’s case in accordance with sub-paragraph (1), the amount A is to be divided by the number of persons who are jointly and severally liable for that tax.

(4) Where an applicant is jointly and severally liable for council tax in respect of a dwelling with only a partner, sub-paragraph (3) does not apply in that applicant’s case.

(5) The reference in sub-paragraph (3) to a person with whom an applicant is jointly and severally liable for council tax does not include a student to whom paragraph 3 of Schedule 11 (students who are excluded from entitlement to a reduction under an authority’s scheme) applies.

(6) In this paragraph “relevant financial year” (“blwyddyn ariannol berthnasol”) means, in relation to any particular day, the financial year within which the day in question falls.

Non-dependant deductions: pensioners

3

(1) Subject to the following provisions of this paragraph, the non-dependant deductions in respect of a day referred to in paragraph 2 are—

(a) in respect of a non-dependant aged 18 or over in remunerative work, £20.05 x 1/7;

(b) in respect of a non-dependant aged 18 or over to whom paragraph (a) does not apply, £6.70 x 1/7.

(2) In the case of a non-dependant aged 18 or over to whom sub-paragraph (1)(a) applies, where it is shown to the authority that that non-dependant’s normal gross weekly income is—

(a) less than £279.00, the deduction to be made under this paragraph is that specified in sub-paragraph (1)(b);

(b) not less than £279.00 but less than £485.00, the deduction to be made under this paragraph is £13.35 x 1/7;

(3) Only one deduction is to be made under this paragraph in respect of a couple or, as the case may be, members of a polygamous marriage and, where, but for this paragraph, the amount that would fall to be deducted in respect of one member of a couple or polygamous marriage is higher than the amount (if any) that would fall to be deducted in respect of the other, or any other, member, the higher amount is to be deducted.

(4) In applying the provisions of sub-paragraph (2) in the case of a couple or, as the case may be, a polygamous marriage, regard must be had, for the purpose of that sub-paragraph, to the couple’s or, as the case may be, all members of the polygamous marriage’s joint weekly gross income.

(5) Where in respect of a day—

(a) a person is a resident in a dwelling but that person is not liable for council tax in respect of that dwelling and that day;

(b) other residents in that dwelling (the liable persons) have joint and several liability for council tax in respect of that dwelling and that day otherwise than by virtue of section 9 of the 1992 Act (liability of spouses and civil partners); and

the deduction in respect of that non-dependant must be apportioned equally between those liable persons.

(6) No deduction is to be made in respect of any non-dependants occupying an applicant’s dwelling if the applicant or the applicant’s partner is—

(a) blind or severely sight-impaired or is treated as such by virtue of paragraph 20 of Schedule 1 (additional condition for the disability premium); or

(b) receiving in respect of the applicant—

(i) attendance allowance or would be receiving that allowance but for—

(aa) a suspension of benefit in accordance with regulations under section 113(2) of the SSCBA; or

(bb) an abatement as a result of hospitalisation; or

(ii) the care component of the disability living allowance, or would be receiving that component but for—

(aa) a suspension of benefit in accordance with regulations under section 113(2) of the SSCBA; or

(bb) an abatement as a result of hospitalisation; or

(iii) the daily living component of personal independence payment or would be receiving that allowance but for a suspension of benefit in accordance with regulations under section 86 of the Welfare Reform Act 2012¹⁰⁴ (hospital in-patients); or

(iv) an AFIP, or would be receiving that payment but for a suspension of it in accordance with any terms of the armed and reserve forces compensation scheme which allow for a suspension because a person is undergoing medical treatment in a hospital or similar institution.

(7) No deduction is to be made in respect of a non-dependant if—

(a) although that non-dependant resides with the applicant, it appears to the authority that that non-dependant’s normal home is elsewhere; or

(b) the non-dependant is in receipt of a training allowance paid in connection with youth training established under section 2 of the Employment and Training Act 1973¹⁰⁵ or section 2 of the Enterprise and New Towns (Scotland) Act 1990¹⁰⁶; or

(d) the non-dependant is not residing with the applicant because the non-dependant has been a patient for a period in excess of 52 weeks, and for these purposes—

(i) “patient” (“claf”) has the meaning given in regulation 26(6), and

(ii) where a person has been a patient for two or more distinct periods separated by one or more intervals each not exceeding 28 days, that person is to be treated as having been a patient continuously for a period equal in duration to the total of those distinct periods.

(8) No deduction is to be made in respect of a non-dependant—

(a) who is on income support, state pension credit, an income-based jobseeker’s allowance or an income related employment and support allowance and where the non-dependent is not a member of the work-related activity group; ...

(b) to whom Part 3 (disregards) of the Council Tax (Discounts, Disregards and Exemptions) (Wales) Regulations 2026 applies but this paragraph does not apply to a non-dependant who is a student within the meaning of Part 3 of, and Schedule 2 to, those Regulations; or

(c) who is entitled to an award of universal credit where the award is calculated on the basis that the person does not have any earned income.

(9) In the application of sub-paragraph (2) there is to be disregarded from the non-dependant’s weekly gross income—

(a) any attendance allowance, disability living allowance, personal independence payment or AFIP received by the non-dependant;

(b) any payment made under or by a trust, established for the purpose of giving relief and assistance to disabled persons whose disabilities were caused by the fact that during their mother’s pregnancy she had taken a preparation containing the drug known as Thalidomide, and which is approved by the Secretary of State.

(c) any payment made under or by the Trusts, the Fund, the Eileen Trust, MFET Limited, the Skipton Fund, the Caxton Foundation, an approved blood scheme, the Scottish Infected Blood Support Scheme, the London Emergencies Trust, the We Love Manchester Emergency Fund , the Victims of Overseas Terrorism Compensation Scheme , the Windrush Compensation Scheme or the Independent Living Fund (2006);

(d) any Post Office compensation payment , vaccine damage payment, LGBT Financial Recognition Scheme payment or miscarriage of justice compensation payment;

(e) any payment out of the estate of a person to that person's son, daughter, step-son or step-daughter which derives from a payment to meet the recommendation of the Infected Blood Inquiry in its interim report published on 29 July 2022 made under or by the Scottish Infected Blood Support Scheme or an approved blood scheme;

(f) any payment out of the estate of a person which derives from a payment made under or by the Scottish Infected Blood Support Scheme or an approved blood scheme to the estate of the person as a result of that person being infected from contaminated blood products.

(10) For the purposes of sub-paragraph (8), “earned income” (“incwm a enillir”) has the meaning given in regulation 52 of the Universal Credit Regulations 2013.

PART 3 — Amount of reduction under an authority’s scheme: pensioners

Amount of reduction under an authority’s scheme: Classes A and B

4

(1) Where a pensioner is entitled to a reduction under an authority’s scheme in respect of a day, the amount of the reduction to which that pensioner is to be entitled is as follows.

(2) Where the person is within class A, that amount is the amount which is the maximum council tax reduction in respect of the day in the person’s case.

(3) Where the person is within class B, that amount is the amount found by deducting amount B from amount A, where “amount A” and “amount B” have the meanings given in regulation 23.

PART 4 — Income and capital for the purposes of calculating eligibility for a reduction under an authority’s scheme and amount of reduction: pensioners

CHAPTER 1 — General: pensioners

Calculation of income and capital: applicant’s family and polygamous marriages: pensioners

5

(1) The income and capital of—

(a) an applicant; and

(b) any partner of that applicant,

is to be calculated in accordance with the provisions of this Part.

(2) The income and capital of any partner of the applicant is to be treated as income and capital of the applicant, and in this Part any reference to the applicant applies equally to any partner of that applicant.

(3) Where an applicant or the partner of an applicant is married polygamously to two or more members of the applicant’s household—

(a) the applicant must be treated as possessing capital and income belonging to each such member; and

(b) the income and capital of that member is to be calculated in accordance with the following provisions of this Part in like manner as for the applicant.

Circumstances in which capital and income of non-dependant is to be treated as applicant’s: pensioners

6

(1) Sub-paragraph (2) applies where it appears to the authority that a non-dependant and an applicant have entered into arrangements in order to take advantage of an authority’s scheme and the non-dependant has more income and capital than the applicant.

(2) Except where—

(a) the applicant is a pensioner and is on a guarantee credit, or

(b) the applicant is not a pensioner and is on income support, an income-based jobseeker’s allowance or an income-related employment and support allowance,

the authority must treat the applicant as possessing income and capital belonging to that non-dependant and, in such a case, any capital and income which the applicant does possess is to be disregarded.

(3) Where an applicant is treated as possessing capital and income belonging to a non-dependant under sub-paragraph (2) the capital and income of that non-dependant must be calculated in accordance with the following provisions of this Part in like manner as for the applicant and, except where the context otherwise requires, any reference to the “applicant” (“ceisydd”) is to be construed for the purposes of this Part as if it were a reference to that non-dependant.

CHAPTER 2 — Income: pensioners in receipt of guarantee credit or savings credit: pensioners

Pensioners in receipt of guarantee credit

7

In the case of an applicant who is a pensioner and who is in receipt, or whose partner is in receipt, of a guarantee credit, the whole of the applicant’s capital and income must be disregarded.

Calculation of pensioner’s income in savings credit only cases

8

(1) In determining the income and capital of an applicant who is a pensioner and who has, or whose partner has, an award of state pension credit comprising only the savings credit, subject to the following provisions of this paragraph, an authority must use the calculation or estimate of the applicant’s or as the case may be, the applicant’s partner’s income and capital made by the Secretary of State for the purpose of determining the award of state pension credit.

(2) Where the calculation or estimate provided by the Secretary of State includes an amount taken into account in that determination in respect of net income, the authority may only adjust that amount so far as necessary to take into account—

(a) the amount of any savings credit payable;

(b) in respect of any dependent children of the applicant, child care charges taken into account under paragraph 18 (calculation of income on a weekly basis);

(i) lone parent’s earnings; or

(ii) payments of maintenance, whether under a court order or not, which is made or due to be made by—

(aa) the applicant’s former partner, or the applicant’s partner’s former partner; or

(bb) the parent of a child or young person where that child or young person is a member of the applicant’s family except where that parent is the applicant or the applicant’s partner;

(d) any amount to be disregarded by virtue of paragraph 10(1) of Schedule 3 (sums disregarded from applicant’s earnings);

(e) the income and capital of any partner of the applicant who is treated as a member of the applicant’s household under regulation 8, to the extent that it is not taken into account in determining the net income of the person claiming state pension credit;

(f) paragraph 6 (circumstances in which capital and income of a non-dependant is to be treated as applicant’s), if the authority determines that that provision applies in the applicant’s case;

(g) such further reduction (if any) as the authority thinks fit under section 13A(1)(c) of the 1992 Act¹⁰⁷;

(h) any amount to be disregarded by virtue of paragraph 6 of Schedule 3 (sums to be disregarded from applicant’s income: pensioners).

(3) Paragraphs 10 to 30 of this Schedule do not apply to the amount of the net income to be taken into account under sub-paragraph (1), but do apply (so far as relevant) for the purpose of determining any adjustments to that amount which the authority makes under sub-paragraph (2).

(4) If sub-paragraph (5) applies, the authority must calculate the applicant’s capital in accordance with paragraphs 25 to 30 (calculation of capital: pensioners).

(5) This sub-paragraph applies if—

(a) the Secretary of State notifies the authority that the applicant’s capital has been determined as being £16,000 or less or the authority determines the applicant’s capital as being £16,000 or less;

(b) subsequent to that determination the applicant’s capital rises to more than £16,000; and

(c) the increase occurs whilst there is in force an assessed income period within the meaning of sections 6 and 9 of the State Pension Credit Act 2002¹⁰⁸.

CHAPTER 3 — Income: other pensioners

Calculation of income and capital where state pension credit is not payable: pensioners

9

Where neither paragraph 7 (pensioner in receipt of guarantee credit) nor 8 (calculation of pensioner’s income in savings credit only cases) applies in the applicant’s case, the applicant’s income and capital is to be calculated or estimated in accordance with paragraphs 10 to 19 and 21 to 24 (calculation of income) and paragraphs 25 to 31 (calculation of capital).

Meaning of “income”: pensioners

10

(1) For the purposes of classes A and B “income” (“incwm”) means income of any of the following descriptions—

(a) earnings;

(b) working tax credit;

(d) income from annuity contracts (other than retirement pension income);

(e) a war disablement pension or war widow’s or widower’s pension;

(f) a foreign war disablement pension or war widow’s or widower’s pension;

(g) a guaranteed income payment;

(h) a payment made under article 29(1)(c) of the Armed Forces and Reserve Forces (Compensation Scheme) Order 2011¹¹⁰, in any case where article 31(2)(c) applies;

(i) income from capital other than capital disregarded under Part 1 of Schedule 5;

(j) social security benefits, other than retirement pension income or any of the following benefits—

(i) disability living allowance;

(ii) personal independence payment;

(iii) an AFIP;

(iv) attendance allowance payable under section 64 of the SSCBA (entitlement to attendance allowance);

(v) an increase of disablement pension under section 104 (increase for constant attendance) or 105 (increase for exceptionally severe disablement) of the SSCBA;

(vi) child benefit;

(vii) any guardian’s allowance payable under section 77 of the SSCBA (guardian’s allowance);

(viii) any increase for a dependant, other than the applicant’s partner, payable in accordance with Part 4 of the SSCBA (increases for dependants);

(ix) any—

(aa) social fund payment made under Part 8 of the SSCBA (the social fund); or

(bb) occasional assistance;

(x) Christmas bonus payable under Part 10 of the SSCBA (Christmas bonus for pensioners);

(xi) housing benefit;

(xii) council tax benefit;

(xiii) bereavement support payment under section 30 of the Pensions Act 2014;

(xiv) statutory sick pay;

(xv) statutory maternity pay;

(xvi) ... statutory paternity pay payable under Part 12ZA of the SSCBA (statutory paternity pay)¹¹¹;

(xvia) statutory shared parental pay payable under Part 12ZC of the SSCBA;

(xvib) statutory parental bereavement pay under Part 12ZD of the SSCBA;

(xvic) statutory neonatal care pay;

(xvii) additional statutory paternity pay payable under Part 12ZA of the SSCBA;

(xviii) statutory adoption pay payable under Part 12ZB of the SSCBA (statutory adoption pay);

(xix) any benefit similar to those mentioned in the preceding provisions of this paragraph payable under legislation having effect in Northern Ireland;

(xx) universal credit;

(k) all foreign social security benefits which are similar to the social security benefits prescribed above;

(l) a payment made—

(i) under article 30 of the Naval, Military and Air Forces Etc (Disablement and Death) Service Pensions Order 2006¹¹², in any case where article 30(1)(b) applies; or

(ii) under article 12(8) of that Order, in any case where sub-paragraph (b) of article 12(8) applies;

(m) a pension paid by a government to victims of National Socialist persecution;

(n) payments under a scheme made under the Pneumoconiosis etc (Workers’ Compensation) Act 1979¹¹³;

(o) payments made towards the maintenance of the applicant by the applicant’s spouse, civil partner, former spouse or former civil partner or towards the maintenance of the applicant’s partner by that person’s spouse, civil partner, former spouse or former civil partner, including payments made—

(i) under a court order;

(ii) under an agreement for maintenance; or

(iii) voluntarily;

(p) payments due from any person in respect of board and lodging accommodation provided by the applicant;

(q) royalties or other sums paid as a consideration for the use of, or the right to use, any copyright, design, patent or trade mark;

(r) any payment in respect of any—

(i) book registered under the Public Lending Right Scheme 1982¹¹⁴; or

(ii) work made under any international public lending right scheme that is analogous to the Public Lending Right Scheme 1982;

(s) any payment, other than a payment ordered by a court or made in settlement of a claim, made by or on behalf of a former employer of a person on account of the early retirement of that person on grounds of ill-health or disability;

(t) any sum payable by way of pension out of money provided under—

(i) the Civil List Act 1837¹¹⁵,

(ii) the Civil List Act 1937¹¹⁶,

(iii) the Civil List Act 1952¹¹⁷,

(iv) the Civil List Act 1972¹¹⁸, or

(v) the Civil List Act 1975¹¹⁹;

(u) any income in lieu of that specified in paragraphs (a) to (r);

(v) any payment of rent made to an applicant who—

(i) owns the freehold or leasehold interest in any property or is a tenant of any property;

(ii) occupies part of the property; and

(iii) has an agreement with another person allowing that person to occupy that property on payment of rent;

(w) any payment made at regular intervals under an equity release scheme;

(x) PPF periodic payments within the meaning of section 17(1) of the State Pension Credit Act 2002.

(2) Where the payment of any social security benefit referred to in sub-paragraph (1) is subject to any deduction (other than an adjustment specified in sub-paragraph (4)) the amount to be taken into account under sub-paragraph (1) is to be the amount before the deduction is made.

(3) Where an award of any working tax credit or child tax credit is subject to a deduction by way of recovery of an overpayment of working tax credit or child tax credit which arose in a previous tax year the amount to be taken into account under sub-paragraph (1) is to be the amount of working tax credit or child tax credit awarded less the amount of that deduction.

(4) The adjustments specified in this sub-paragraph are those made in accordance with—

(a) the Social Security (Overlapping Benefits) Regulations 1979¹²⁰;

(b) the Social Security (Hospital In-Patients) Regulations 2005¹²¹;

(c) section 30DD or section 30E of the SSCBA¹²² (reductions in incapacity benefit in respect of pensions and councillor’s allowances);

(d) section 3 of the Welfare Reform Act 2007 (deductions from contributory employment and support allowance in respect of pensions and councillor’s allowances) and regulations made under it.

(5) In sub-paragraph (1)(w), “equity release scheme” (“cynllun rhyddau ecwiti”) means a loan—

(a) made between a person (“the lender”) and the applicant;

(b) by means of which a sum of money is advanced by the lender to the applicant by way of payments at regular intervals; and

(c) which is secured on a dwelling in which the applicant owns an estate or interest and which the applicant occupies as the applicant’s home.

Calculation of weekly income: pensioners

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(1) Except in a case where sub-paragraph (2), (3A), (4A) or (5) apply, for the purposes of calculating the weekly income of an applicant who is a pensioner, where the period in respect of which a payment is made—

(a) does not exceed a week, the whole of that payment is to be included in the applicant’s weekly income;

(b) exceeds a week, the amount to be included in the applicant’s weekly income 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 three 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, 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 of days in the period in respect of which it is made.

(2) Sub-paragraph (3) applies where—

(a) the applicant’s regular pattern of work is such that the applicant does not work the same hours every week; or

(b) the amount of the applicant’s income fluctuates and has changed more than once.

(3) The weekly amount of that applicant’s income is to be determined—

(a) if, in a case to which sub-paragraph (2)(a) applies, there is a recognised cycle of work, by reference to the applicant’s average weekly income over the period of the complete cycle (including, where the cycle involves periods in which the applicant does no work, those periods but disregarding any other absences); or

(b) in any other case, on the basis of—

(i) the last two payments if those payments are one month or more apart;

(ii) the last four payments if the last two payments are less than one month apart; or

(iii) calculating or estimating such other payments as may, in the particular circumstances of the case, enable the applicant’s average weekly income to be determined more accurately.

(3A) Income calculated pursuant to sub-paragraphs (2) and (3) must be taken into account—

(a) in the case of an application, on the date on which the application was made or treated as made, and the first day of each reduction week thereafter, regardless of when those earnings were actually received;

(b) in the case of an application or a reduction under a scheme where the applicant commences employment, the day on which the applicant commences that employment, and the first day of each reduction week thereafter, regardless of when those earnings were actually received; or

(c) in the case of an application or a reduction under a scheme where the applicant’s average weekly earnings from employment change, the day on which the applicant’s earnings change, so as to require recalculation under this paragraph, and the first day of each reduction week thereafter, regardless of when those earnings were actually received.

(c) in the case of an application or a reduction under a scheme where the applicant’s average weekly earnings from employment change, the first day of the reduction week following the date the applicant’s earnings from employment change so as to require recalculation under this paragraph, and the first day of each reduction week thereafter, regardless of whether those earnings were actually received in that reduction week.

(4) For the purposes of sub-paragraph (3)(b) the last payments are the last payments before the date the application was made or treated as made.

(4A) An applicant’s earnings from employment as an employed earner not calculated pursuant to sub-paragraphs (2) and (3) must be taken into account—

(a) in the case of an application, on the date on which the application was made or treated as made, and the first day of each reduction week thereafter, regardless of when those earnings were actually received;

(b) in the case of an application or a reduction under a scheme where the applicant commences employment, the day on which the applicant commences that employment, and the first day of each reduction week thereafter, regardless of when those earnings were actually received; or

(c) in the case of an application or a reduction under a scheme where the applicant’s average weekly earnings from employment change, the day on which the applicant’s earnings from employment change and the first day of each reduction week thereafter, regardless of when those earnings were actually received.

(c) in the case of an application or a reduction under a scheme where the applicant’s average weekly earnings from employment change, the first day of the reduction week following the date of the change, and the beginning of each reduction week thereafter, regardless of whether those earnings were actually received in that reduction week.

(5) If the applicant is entitled to receive a payment to which sub-paragraph (6) applies, the amount of that payment is to be treated as if made in respect of a period of a year.

(6) This sub-paragraph applies to—

(a) royalties or other sums paid as a consideration for the use of, or the right to use, any copyright, design, patent or trade mark;

(b) any payment in respect of any—

(i) book registered under the Public Lending Right Scheme 1982; or

(ii) work made under any international public lending right scheme that is analogous to the Public Lending Right Scheme 1982; and

(7) The period under which any benefit under the benefit Acts is to be taken into account is to be the period in respect of which that benefit is payable.

(8) Where payments are made in a currency other than sterling, the value of the payment is to be determined by taking the sterling equivalent on the date the payment is made.

(9) The sums specified in Schedule 3 are to be disregarded in calculating—

(a) the applicant’s earnings; and

(b) any amount to which sub-paragraph (6) applies where the applicant is the first owner of the copyright, design, patent or trademark, or an original contributor to the book or work referred to in sub-paragraph (6)(b).

(10) For the purposes of sub-paragraph (9)(b), and for those purposes only, the amounts specified in sub-paragraph (6) are to be treated as though they were earnings.

(11) Income specified in Schedule 4 is to be disregarded in the calculation of the applicant’s income.

(12) Schedule 5 has effect so that—

(a) the capital specified in Part 1 of that Schedule is disregarded for the purpose of determining an applicant’s income; and

(b) the capital specified in Part 2 of that Schedule is disregarded for the purpose of determining an applicant’s income under paragraph 31 (calculation of tariff income from capital: pensioners).

(13) In the case of any income taken into account for the purpose of calculating a person’s income any amount payable by way of tax is disregarded.

Earnings of employed earners: pensioners

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(1) Subject to sub-paragraph (2), “earnings” (“enillion”), in the case of employment as an employed earner who is a pensioner, means 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 an applicant on account of the termination of that applicant’s employment by reason of redundancy;

(d) any holiday pay;

(e) any payment by way of a retainer;

(f) any payment made by the applicant’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 applicant’s employer in respect of—

(i) travelling expenses incurred by the applicant between the applicant’s home and place of employment;

(ii) expenses incurred by the applicant under arrangements made for the care of a member of the applicant’s family owing to the applicant’s absence from home;

(g) 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 2001¹²³;

(h) statutory sick pay and statutory maternity pay payable by the employer under the SSCBA;

(i) statutory paternity pay payable under Part 12ZA of the SSCBA;

(j) statutory adoption pay payable under Part 12ZB of the SSCBA;

(ja) statutory shared parental pay payable under Part 12ZC of the SSCBA;

(jb) statutory parental bereavement pay under Part 12ZD of that Act;

(jc) statutory neonatal care pay;

(k) any sums payable under a contract of service—

(i) for incapacity for work due to sickness or injury; or

(ii) by reason of pregnancy or confinement.

(2) Earnings does not include—

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

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

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

(e) any payment of compensation made pursuant to an award by an employment tribunal established under the Employment Tribunals Act 1996¹²⁴ in respect of unfair dismissal or unlawful discrimination;

(f) any payment in respect of expenses arising out of the applicant’s participation in a service user group.

(3) Sub-paragraph (2)(a) does not apply in respect of any non-cash voucher referred to in sub-paragraph (1)(g).

Calculation of net earnings of employed earners: pensioners

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(1) For the purposes of paragraph 18 (calculation of income on a weekly basis: pensioners), the earnings of an applicant derived or likely to be derived from employment as an employed earner to be taken into account must, subject to paragraph 11(4) and Schedule 3, (calculation of weekly income: pensioners) be that applicant’s net earnings.

(2) For the purposes of sub-paragraph (1) net earnings must, except where sub-paragraph (5) applies, be calculated by taking into account the gross earnings of the applicant from that employment over the assessment period, less—

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

(i) income tax;

(ii) primary Class 1 contributions under the SSCBA;

(b) one-half of any sum paid by the applicant by way of a contribution towards an occupational pension scheme;

(c) one-half of the amount calculated in accordance with sub-paragraph (4) in respect of any qualifying contribution payable by the applicant; and

(d) where those earnings include a payment which is payable under any enactment having effect in Northern Ireland and which corresponds to statutory sick pay, statutory maternity pay, ... statutory paternity pay , statutory shared parental pay , statutory parental bereavement pay , statutory neonatal care pay or statutory adoption pay, any amount deducted from those earnings by way of any contributions which correspond to primary Class 1 contributions under the SSCBA.

(3) In this paragraph “qualifying contribution” (“cyfraniad cymwys”) means any sum which is payable periodically as a contribution towards a personal pension scheme.

(4) The amount in respect of any qualifying contribution is to be calculated by multiplying the daily amount of the qualifying contribution by the number equal to the number of days in the assessment period; and for the purposes of this paragraph the daily amount of the qualifying contribution is to be determined—

(a) where the qualifying contribution is payable monthly, by multiplying the amount of the qualifying contribution by 12 and dividing the product by 365;

(b) in any other case, by dividing the amount of the qualifying contribution by the number equal to the number of days in the period to which the qualifying contribution relates.

(5) Where the earnings of an applicant are determined under paragraph 11(2)(b) (calculation of weekly income: classes A and B) that applicant’s net earnings are to be calculated by taking into account those earnings over the assessment period, less—

(a) an amount in respect of income tax equivalent to an amount calculated by applying to those earnings the basic rate of tax applicable to the assessment period less only the personal reliefs to which the applicant is entitled under Chapters 2, 3 and 3A of Part 3 of the Income Tax Act 2007¹²⁵ ... as is appropriate to the applicant’s circumstances but, if the assessment period is less than a year, the earnings to which the basic rate of tax is to be applied and the amount of the personal reliefs deductible under this sub-paragraph is to be calculated on a pro rata basis;

(b) an amount equivalent to the amount of the primary Class 1 contributions that would be payable by the applicant under the SSCBA in respect of those earnings if such contributions were payable; and

(c) one-half of any sum which would be payable by the applicant by way of a contribution towards an occupational or personal pension scheme, if the earnings so estimated were actual earnings.

Calculation of earnings self-employed earners: pensioners

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(1) Where the earnings of an applicant who is a pensioner consist of earnings from employment as a self employed earner, the weekly amount of that applicant’s earnings is to be determined by reference to the applicant’s average weekly earnings from that employment—

(a) over a period of one year; or

(b) where the applicant 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 (“computation period”) as may, in the particular case, enable the weekly amount of the applicant’s earnings to be determined more accurately.

(2) For the purposes of determining the weekly amount of earnings of an applicant to whom sub-paragraph (1)(b) applies, the applicant’s earnings over the computation period are to be divided by the number equal to the number of days in that period and the quotient multiplied by 7.

(3) The period over which the weekly amount of an applicant’s earnings is calculated in accordance with this paragraph is to be the applicant’s assessment period.

Earnings of self-employed earners: pensioners

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(1) Subject to sub-paragraph (2), “earnings” (“enillion”), in the case of employment as a self-employed earner who is a pensioner, means the gross income of the employment.

(2) “Earnings” in the case of employment as a self-employed earner does not include—

(a) where an applicant occupies a dwelling as the applicant’s home and the applicant provides in that dwelling board and lodging accommodation for which payment is made, those payments;

(b) any payment made by a local authority to an applicant—

(i) with whom a person is accommodated by virtue of arrangements made under section 22C or 23(2)(a) of the Children Act 1989¹²⁶ (provision of accommodation and maintenance for a child whom they are looking after) or, as the case may be, section 26(1) of the Children (Scotland) Act 1995¹²⁷ , or section 81 of the Social Services and Well-being (Wales) Act 2014 (accommodation and maintenance of looked after children); or

(ii) with whom a local authority fosters a child under the Looked After Children (Scotland) Regulations 2009¹²⁸ or who is a kinship carer under those Regulations;

(c) any payment made by a voluntary organisation in accordance with section 59(1)(a) of the Children Act 1989 (provision of accommodation by voluntary organisations);

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

(i) a local authority but excluding payments of housing benefit made in respect of the person concerned;

(ii) a voluntary organisation;

(iii) the person concerned pursuant to section 26(3A) of the National Assistance Act 1948¹²⁹;

(iv) NHS England or an integrated care board established under Chapter A3 of Part 2 of the National Health Service Act 2006; ...

(v) a Local Health Board established by an order made under section 11 of the National Health Service (Wales) Act 2006¹³⁰;

(vi) the person concerned where the payment is for the provision of accommodation to meet that person’s needs for care and support arranged pursuant to section 35 or 36 of the Social Services and Well-being (Wales) Act 2014; or

(vii) the person concerned where the payment is for the provision of accommodation to meet that person’s needs for care and support arranged pursuant to section 18 or 19 of the Care Act 2014;

(e) any sports award.

Notional income: pensioners

16

(1) An applicant who is a pensioner is to be treated as possessing—

(a) subject to sub-paragraph (2), the amount of any retirement pension income—

(i) for which no claim has been made; and

(ii) to which that applicant might expect to be entitled if a claim for it were made;

(b) income from an occupational pension scheme which the applicant elected to defer.

(2) Sub-paragraph (1)(a) does not apply to the following where entitlement has been deferred—

(a) a Category A or Category B retirement pension payable under sections 43 to 55 of the SSCBA;

(b) a shared additional pension payable under sections 55A and 55AA of the SSCBA;

(d) a state pension under Part 1 of the Pensions Act 2014.

(3) For the purposes of sub-paragraph (2), entitlement has been deferred—

(a) in the case of a Category A or Category B pension, in the circumstances specified in section 55(3) of the SSCBA;

(b) in the case of a shared additional pension, in the circumstances specified in section 55C(3) of the SSCBA; ...

(c) in the case of graduated retirement benefit, in the circumstances specified in section 36(4) and (4A) of the National Insurance Act 1965 ; and

(d) in the case of a state pension under Part 1 of the Pensions Act 2014, in the circumstances specified in section 17(7) and (8) of that Act.

(4) This sub-paragraph applies where a person who has attained the qualifying age for state pension credit—

(a) is entitled to money purchase benefits under an occupational pension scheme or a personal pension scheme;

(b) fails to purchase an annuity with the funds available in that scheme; and

(i) defers in whole or in part the payment of any income which would have been payable to that person by that person’s pension fund holder, or

(ii) fails to take any necessary action to secure that the whole of any income which would be payable to that person by that person’s pension fund holder upon that person applying for it, is so paid, or

(iii) is a person to whom income withdrawal is not available under that scheme.

(5) Where sub-paragraph (4) applies, the amount of any income foregone is to be treated as possessed by that person, but only from the date on which it could be expected to be acquired were an application for it to be made.

(6) The amount of any income foregone in a case where sub-paragraph (4)(c)(i) or (ii) applies is to be the maximum amount of income which may be withdrawn from the fund and must be determined by the authority, taking account of information provided by the pension fund holder.

(7) The amount of any income foregone in a case where sub-paragraph (4)(c)(iii) applies is to be the income that the applicant could have received without purchasing an annuity had the funds held under the relevant scheme been held under a personal pension scheme or occupational pension scheme where income withdrawal was available and is to be determined in the manner specified in sub-paragraph (6).

(8) In sub-paragraph (4), “money purchase benefits” (“buddion pryniant ariannol”) has the same meaning as in the Pension Schemes Act 1993.

(9) Subject to sub-paragraphs (10) , (11A), (11B) and (12), a person is to be treated as possessing income of which that person has deprived himself or herself for the purpose of securing entitlement to a reduction under an authority’s scheme or increasing the amount of the reduction.

(10) Sub-paragraph (9) does not apply in respect of the amount of an increase of pension or benefit where a person, having made an election in favour of that increase of pension or benefit under Schedule 5 or 5A to the SSCBA or under Schedule 1 to the Social Security (Graduated Retirement Benefit) Regulations 2005¹³², changes that election in accordance with regulations made under Schedule 5 or 5A to that Act in favour of a lump sum.

(11) In sub-paragraph (10), “lump sum” (“cyfandaliad”) means a lump sum under Schedule 5 or 5A to the SSCBA or under Schedule 1 to the Social Security (Graduated Retirement Benefit) Regulations 2005.

(11A) Sub-paragraph (9) does not apply in respect of the amount of an increase of pension where a person, having made an election in favour of that increase in pension under section 8(2) of the Pensions Act 2014, changes that election in accordance with regulations made under section 8(7) of that Act in favour of a lump sum.

(11B) Sub-paragraph (9) does not apply in respect of the amount of an increase of pension where a person, having made an election in favour of that increase in pension in accordance with regulations made under section 10 of the Pensions Act 2014, which include provision corresponding or similar to provision made by section 8(2) of that Act, changes that election in favour of a lump sum, in accordance with regulations made under section 10 of that Act which include provision corresponding or similar to provision made by regulations made under section 8(7).

(11C) In sub-paragraph (11A) “lump sum” (“cyfandaliad”) means a lump sum under section 8 of the Pensions Act 2014.

(11D) In sub-paragraph (11B) “lump sum” (“cyfandaliad”) means a lump sum under section 10 of the Pensions Act 2014.

(12) Sub-paragraph (9) does not apply in respect of any amount of income other than earnings, or earnings of an employed earner, arising out of the applicant’s participation in a service user group.

(13) Where an applicant is in receipt of any benefit under the benefit Acts and the rate of that benefit is altered with effect from a date on or after 1 April in any year but not more than 14 days thereafter, the authority must treat the applicant as possessing such benefit at the altered rate from either 1 April or the first Monday in April in that year, whichever date the authority selects to apply, to the date on which the altered rate is to take effect.

(14) In the case of an applicant who has, or whose partner has, an award of state pension credit comprising only the savings credit, where the authority treats the applicant as possessing any benefit at the altered rate in accordance with sub-paragraph (13), the authority must—

(a) determine the income and capital of that applicant in accordance with paragraph 8 (calculation of pensioner’s income in savings credit only cases) where the calculation or estimate of that income and capital is altered with effect from a date on or after 1 April in any year but not more than 14 days thereafter; and

(b) treat that applicant as possessing such income and capital at the altered rate by reference to the date selected by the authority to apply in its area, for the purposes of establishing the period referred to in sub-paragraph (13).

(15) For the purposes of sub-paragraph (9), a person is not to be regarded as depriving himself or herself of income where—

(a) that person’s rights to benefits under a registered pension scheme are extinguished and in consequence of this that person receives a payment from the scheme, and

(b) that payment is a trivial commutation lump sum within the meaning given by paragraph 7 of Schedule 29 to the Finance Act 2004.

(16) In sub-paragraph (15), “registered pension scheme” (“cynllun pensiwn cofrestredig”) has the meaning given in section 150(2) of the Finance Act 2004.

Income paid to third parties: pensioners

17

(1) Any payment of income, other than a payment specified in sub-paragraph (2) or (3), to a third party in respect of the applicant is to be treated as possessed by the applicant.

(2) Sub-paragraph (1) does not apply in respect of a payment of income made under an occupational pension scheme, in respect of a pension or other periodical payment made under a personal pension scheme or a payment made by the Board of the Pension Protection Fund where—

(a) a bankruptcy order has been made in respect of the person in respect of whom the payment has been made or, in Scotland, the estate of that person is subject to sequestration or a judicial factor has been appointed on that person’s estate under section 41 of the Solicitors (Scotland) Act 1980¹³³;

(b) the payment is made to the trustee in bankruptcy or any other person acting on behalf of the creditors; and

(c) the person referred to in paragraph (a) and that person’s partner does not possess, or is not treated as possessing, any other income apart from that payment.

(3) Sub-paragraph (1) does not apply in respect of any payment of income other than earnings, or earnings derived from employment as an employed earner, arising out of the applicant’s participation in a service user group.

Calculation of income on a weekly basis: pensioners

18

(1) Subject to paragraph 22 (disregard of changes in tax contributions, etc), the income of an applicant is to be calculated on a weekly basis—

(a) by estimating the amount which is likely to be the applicant’s average weekly income in accordance with this Part;

(b) by adding to that amount the weekly income calculated under paragraph 31 (calculation of tariff income from capital); and

(c) by then deducting any relevant child care charges to which paragraph 19 (treatment of child care charges) applies from any earnings which form part of the average weekly income or, in a case where the conditions in sub-paragraph (2) are met, from those earnings plus whichever credit specified in paragraph (b) of that sub-paragraph is appropriate, up to a maximum deduction in respect of the applicant’s family of whichever of the sums specified in sub-paragraph (3) applies in the applicant’s case.

(2) The conditions of this paragraph are that—

(a) the applicant’s earnings which form part of the applicant’s average weekly income are less than the lower of either the applicant’s relevant child care charges or whichever of the deductions specified in sub-paragraph (3) otherwise applies in the applicant’s case; and

(b) that applicant or, if the applicant is a member of a couple either the applicant or the applicant’s partner, is in receipt of either working tax credit or child tax credit.

(3) The maximum deduction to which sub-paragraph (1)(c) above refers is to be—

(a) where the applicant’s family includes only one child in respect of whom relevant child care charges are paid, £175 week;

(b) where the applicant’s family includes more than one child in respect of whom relevant child care charges are paid, £300 per week.

Treatment of child care charges: pensioners

19

(1) This paragraph applies where an applicant (within the meaning of this paragraph) is incurring relevant child care charges and—

(a) is a lone parent and is engaged in remunerative work;

(b) is a member of a couple both of whom are engaged in remunerative work; or

(i) is incapacitated;

(ii) is an in-patient in hospital; or

(iii) is in prison (whether serving a custodial sentence or remanded in custody awaiting trial or sentence).

(2) For the purposes of sub-paragraph (1) and subject to sub-paragraph (4), a person to whom sub-paragraph (3) applies must be treated as engaged in remunerative work for a period not exceeding 28 weeks during which the person—

(a) is paid statutory sick pay;

(b) is paid short-term incapacity benefit at the lower rate under sections 30A to 30E of the SSCBA;

(d) is paid income support on the grounds of incapacity for work under regulation 4ZA of, and paragraph 7 or 14 of Schedule 1B to, the Income Support (General) Regulations 1987¹³⁴; or

(e) is credited with earnings on the grounds of incapacity for work or limited capability for work under regulation 8B of the Social Security (Credits) Regulations 1975¹³⁵.

(3) This sub-paragraph applies to a person who was engaged in remunerative work immediately before—

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