Source: http://www.legislation.gov.uk/wsi/2012/3145/schedule/part/9/chapter/4/made
Timestamp: 2018-02-24 02:41:08
Document Index: 110593400

Matched Legal Cases: ['art 1', 'art 4', 'art 8', 'art 10', 'art 12', 'art 12', 'art 12', 'art 1', 'art 2', 'art 5', 'art 12', 'art 12', 'art 12', 'art 12']

CHAPTER 4Income: other pensioners
Calculation of income and capital where state pension credit is not payable: pensioners
35. Where neither paragraph 32 (pensioner in receipt of guarantee credit) nor 33 (applicant in receipt of savings credit only: pensioners) applies in the applicant’s case, the applicant’s income and capital is to be calculated or estimated in accordance with paragraphs 36 to 43, and 54 to 59 (calculations of income) and Chapter 7 of this Part (calculation of capital).
Meaning of “income”: pensioners
36.—(1) For the purposes of classes A and B in this scheme, “income” means income of any of the following descriptions—
(a)earnings;
(b)working tax credit;
(c)retirement pension income within the meaning of the State Pension Credit Act 2002;
(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 2011(1), in any case where article 31(2)(c) applies;
(i)income from capital other than capital disregarded under Part 1 of Schedule 8;
(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 of the SSCBA (increase for exceptionally severe disablement);
(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 payment;
(xiv)statutory sick pay;
(xv)statutory maternity pay;
(xvi)ordinary statutory paternity pay payable under Part 12ZA of the SSCBA (statutory paternity pay)(2);
(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;
(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 2006(3), in any case where article 30(1)(b) applies; or
(ii)under article 12(8) of that Order (unemployability allowances: children who have reached the child’s age limit), in any case where sub-paragraph (b) of that article applies;
(m)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;
(n)payments under a scheme made under the Pneumoconiosis etc (Worker’s Compensation) Act 1979(4);
(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 1982; 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 1837(5);
(ii)the Civil List Act 1937(6);
(iii)the Civil List Act 1952(7);
(iv)the Civil List Act 1972(8); or
(v)the Civil List Act 1975(9);
(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 1979(10);
(b)the Social Security (Hospital In-Patients) Regulations 2005(11);
(c)section 30DD or section 30E of the SSCBA(12) (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” 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
37.—(1) Except in a case where sub-paragraph (2) or (4) applies, 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.
(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.
(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—
(ii)work made under any international public lending right scheme that is analogous to the Public Lending Right Scheme 1982; and
(c)any payment which is made on an occasional basis.
(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 4 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 that purpose only, the amounts specified in sub-paragraph (6) are to be treated as though they were earnings.
(11) Income specified in Schedule 5 is to be disregarded in the calculation of the applicant’s income.
(12) Schedule 8 (capital disregards: pensioners) has effect so that—
(a)the capital specified in Part 1 is disregarded for the purpose of determining an applicant’s income; and
(b)the capital specified in Part 2 is disregarded for the purpose of determining an applicant’s income under paragraph 68 (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
38.—(1) Subject to sub-paragraph (2), “earnings”, 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;
(c)any payment in lieu of notice;
(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 2001(13);
(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;
(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;
(c)any occupational pension;
(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 1996(14) 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
39.—(1) For the purposes of paragraph 54 (calculation of income on a weekly basis), 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 37(4) (calculation of weekly income: pensioners) and Schedule 4, 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, ordinary or additional statutory paternity 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 Act.
(3) In this paragraph “qualifying contribution” 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 37(2)(b) (calculation of weekly income: pensioners) 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 relief to which the applicant is entitled under sections 35 to 37 of the Income Tax Act 2007(15) (personal allowances) 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 relief 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 of self-employed earners: pensioners
40.—(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 product 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
41.—(1) Subject to sub-paragraph (2), “earnings”, 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 1989(16) (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 1995(17); or
(ii)with whom a local authority fosters a child under the Looked After Children (Scotland) Regulations 2009(18) 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 1948(19);
(iv)the National Health Service Commissioning Board or a clinical commissioning group established under section 14D of the National Health Service Act 2006(20); or
(v)a Local Health Board established under section 11 of the National Health Service (Wales) Act 2006(21);
(e)any sports award.
Notional income: pensioners
42.—(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 section 55A of the SSCBA;
(c)graduated retirement benefit payable under sections 36 and 37 of the National Insurance Act 1965(22).
(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; and
(c)in the case of graduated retirement benefit, in the circumstances specified in section 36(4) and (4A) of the National Insurance Act 1965.
(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” has the same meaning as in the Pension Schemes Act 1993.
(9) Subject to sub-paragraphs (10) 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 this 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 2005(23), 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” 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.
(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 1st April in any year but not more than 14 days thereafter, the authority will treat the applicant as possessing such benefit at the altered rate from either 1st 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 33(1) (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 1st 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” has the meaning given in section 150(2) of the Finance Act 2004.
Income paid to third parties: pensioners
43.—(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 1980(24);
(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.
S.I. 2011/517.
Part 12ZA was inserted by section 2 and Part 12ZB was inserted by section 4 of the Employment Act 2002 (c. 22).
1979 c. 41.
1837 c. 2.
1937 c. 32.
1952 c. 37.
1972 c. 7.
1975 c. 82.
S.I. 1979/597.
S.I. 2005/3360.
1992 c. 4; section 30DD was inserted by section 63 of the Welfare Reform and Pensions Act 1999 (c. 30). Section 30E was inserted by section 3 of the Social Security (Incapacity for Work) Act 1994 (c. 18). Both sections are repealed by the Welfare Reform Act 2007 (c. 5), Schedule 8 (not yet in force).
1996 c. 17.
2007 c. 3: the heading and subsection (1) of section 35 were amended by section 4 of the Finance Act 2012 (c. 14) (“2012 Act”); subsections (2) and (4) were inserted by section 4 of the Finance Act 2009 (c. 10). In section 36, the heading and subsection (2) were amended by, subsection (1) substituted by, and subsection (2A) inserted by section 4 of the 2012 Act; subsection (2) has also been amended by S.I. 2011/2926 and section 4 of the Finance Act 2009. In section 37, the heading and subsection (2) were amended by, subsection (1) substituted by, and subsection (2A) inserted by section 4 of the 2012 Act; subsection (2) has also been amended by S.I. 2011/2926 and section 4 of the Finance Act 2009.
1989 c. 41; section 23 was substituted by sections 22A to 22F by section 8(1) of the Children and Young Persons Act 2008 (c. 23). Section 22C is in force in England but is not yet in force in Wales.
1995 c. 36; section 26 was amended by paragraph 1 of Schedule 3 to the Adoption and Children (Scotland) Act 2007 (asp 4).
S.I. 2009/210.
1948 c. 29; section 26(3A) was inserted by section 42(4) of the National Health Service and Community Care Act 1990 (c. 19).
2006 c. 41. The Commissioning Board is established under section 1H of that Act (inserted by section 9 of the Health and Social Care Act 2012 (c. 7)); section 14D was inserted by section 25 of the 2012 Act.
2006 c. 42.
1965 c. 51
S.I. 2005/454.
1980 c. 46.