HOUSING, ENGLAND AND WALES PART I GENERAL Citation and commencement 1 These Regulations may be cited as the Housing Renovation etc. Grants (Reduction of Grant) Regulations 1990 and shall come into force on 1st July 1990. Interpretation 2 1 In these Regulations, unless the context otherwise requires– “ the Act ” means the Local Government and Housing Act 1989; “the 1975 Act ” means the Social Security Act 1975 ; “the 1986 Act ” means the Social Security Act 1986 ; “application” means an application within section 109(1) of the Act; “assessment period” means such period as is prescribed in regulations 17 to 19 over which income falls to be determined; “attendance allowance” means– an attendance allowance under section 35 of the 1975 Act ; an increase of disablement pension under section 61 of that Act ; a payment under regulations made in exercise of the power conferred by section 159(3)(b) of that Act; an increase of an allowance which is payable in respect of constant attendance under section 5 of the Industrial Injuries and Diseases (Old Cases) Act 1975 ; a payment by virtue of article 14, 15, 16, 43 or 44 of the Personal Injuries (Civilians) Scheme 1983 or any analogous payment; any payment based on need for attendance which is paid as part of a war disablement pension; “the benefit Acts” has the meaning assigned by section 84(1) of the 1986 Act ; “boarder” means a person who pays a charge for his accommodation and at least some cooked or prepared meals which are both prepared and consumed in that accommodation or associated premises; “child” means a person under the age of 16; “child benefit” means child benefit under Part I of the Child Benefit Act 1975 ; “close relative” means a parent, parent-in-law, son, son-in-law, daughter, daughter-in-law, step-parent, step-son, step-daughter, brother, sister, or the spouse of any of the preceding persons or, if that person is one of an unmarried couple, the other member of that couple; “community charge benefits” means community charge benefits under Part II of the 1986 Act ; “concessionary payment” means a payment made under arrangements made by the Secretary of State with the consent of the Treasury which is charged either to the National Insurance Fund or to a Departmental Expenditure Vote to which payments of benefit under the 1986 Act, the 1975 Act or the Child Benefit Act 1975 are charged; “earnings” has the meaning assigned by regulation 21 or, as the case may be, 23; “employed earner” is to be construed in accordance with section 2(1)(a) of the 1975 Act; “family” means– a married or unmarried couple; a married or unmarried couple and a member of the same household for whom one of them is or both are responsible and who is a child or a young person; a person who is not a member of a married or unmarried couple and a member of the same household for whom that person is responsible and who is a child or a young person; “health authority” has the same meaning as in section 128(1) of the National Health Service Act 1977 ; “housing benefit” means housing benefit under Part II of the 1986 Act; “income-related benefit” means any benefit to which section 20(1) of the 1986 Act refers; “income support” means income support under Part II of the 1986 Act; “the Independent Living Fund” means the charitable trust established out of funds provided by the Secretary of State for the purpose of providing financial assistance to those persons incapacitated by or otherwise suffering from very severe disablement who are in need of such assistance to enable them to live independently; “invalid carriage or other vehicle” means a vehicle propelled by petrol engine or electric power supplied for use on the road and to be controlled by the occupant; “local authority” means– in relation to England and Wales, the council of a district or London borough, the Common Council of the City of London or the Council of the Isles of Scilly; and in relation to Scotland, an islands or district council; “lone parent” means a person who has no partner and who is responsible for and a member of the same household as a child or young person; “the MacFarlane Trust” means the charitable trust, established partly out of funds provided by the Secretary of State to the Haemophilia Society, for the relief of poverty or distress among those suffering from haemophilia; “the MacFarlane (Special Payments) Trust” means the trust of that name, established on 29th January 1990, partly out of funds provided by the Secretary of State, for the benefit of certain persons suffering from haemophilia; “married couple” has the meaning assigned to it by section 20(11) of the 1986 Act; “member of a couple” means a member of a married or unmarried couple; “mobility allowance” means an allowance under section 37A of the 1975 Act ; “mobility supplement” means a supplement to which paragraph 7 of Schedule 3 refers; “net earnings” means such earnings as are determined in accordance with regulation 22; “net profit” means such profit as is determined in accordance with regulation 24; “non-dependant” has the meaning assigned by regulation 4; “occupational pension” means any pension or other periodical payment under an occupational pension scheme but does not include any discretionary payment out of a fund established for relieving hardship in particular cases; “partner” means– where a person is a member of a married or unmarried couple, the other member of that couple; or where a person is polygamously married to two or more members of his household, any such member; “payment” includes part of a payment; “policy of life insurance” means any instrument by which the payment of money is assured on death (except death by accident only) or the happening of any contingency dependent on human life, or any instrument evidencing a contract which is subject to payment of premiums for a term dependent on human life; “polygamous marriage” means any marriage during the subsistence of which a party to it is married to more than one person and the ceremony of marriage took place under the law of a country which permits polygamy; “rates”– in relation to England and Wales, has the same meaning as in the General Rate Act 1967 ; and in relation to Scotland, has the same meaning as in section 379 of the Local Government (Scotland) Act 1947 except that it does not include domestic water rate within the meaning of section 39 of the Water (Scotland) Act 1980; “relevant person” has the meaning assigned by regulation 3; “remunerative work” has the meaning assigned by regulation 5; “self-employed earner” is to be construed in accordance with section 2(1)(b) of the 1975 Act; “single person” means a person who neither has a partner nor is a lone parent; “social fund payment” means a payment under section 32 of the 1986 Act; “student” has the meaning assigned by regulation 38; “training allowance” has the meaning assigned by regulation 2(1) of the Housing Benefit (General) Regulations 1987 ; “unmarried couple” means a man and woman who are not married to each other but are living together as husband and wife; “war disablement pension” has the meaning assigned by section 84(1) of the 1986 Act; “war widow’s pension” has the meaning assigned by section 84(1) of the 1986 Act ; “year of assessment” has the meaning assigned by section 832(1) of the Income and Corporation Taxes Act 1988 ; “young person” means a person, not being a person who is in receipt of income support or a person who is receiving advanced education within the meaning of regulation 12(2) of the Income Support (General) Regulations 1987 (relevant education), aged 16 or over but under 19 who is treated as a child for the purposes of section 2 of the Child Benefit Act 1975 (meaning of child). 2 In these Regulations, unless the context otherwise requires, a reference– a to a numbered Part is to the Part of these Regulations bearing that number; b to a numbered regulation or Schedule is to the regulation in, or the Schedule to, these Regulations bearing that number; c in a regulation or Schedule to a numbered paragraph is to the paragraph in that regulation or Schedule bearing that number; d in a paragraph to a lettered or numbered sub-paragraph is to the sub-paragraph in that paragraph bearing that letter or number. Definition of relevant person 3 1 Subject to paragraphs (2) and (3), in respect of any one application a relevant person is any person who– a is an applicant, or b is not an applicant but is entitled to make the application and lives or intends to live in the dwelling or, as the case may be, a flat in the building or, c where the application is for a disabled facilities grant, is the disabled occupant or one of the disabled occupants and is neither a person to whom sub-paragraph (a) or (b) applies nor a child or young person. 2 Where any of sub-paragraphs (a), (b) or (c) of paragraph (1) applies to both members of a couple or to more than one member of a polygamous marriage, one member only of that couple or of that polygamous marriage shall be a relevant person in respect of that application. 3 A young person shall not be a relevant person except where he is the only applicant. Definition of non-dependant 4 1 In these Regulations, “non-dependant” means any person, except someone to whom paragraph (2) applies, who normally resides with a relevant person. 2 This paragraph applies to– a any member of the relevant person’s family; b if the relevant person is polygamously married, any partner of his and any child or young person who is a member of his household and for whom he or one of his partners is responsible; c a child or young person who is living with the relevant person but who is not a member of his household by virtue of regulation 7 (membership of the same household); d subject to paragraph (3), a person who jointly occupies the relevant person’s dwelling and is either a co-owner of that dwelling with the relevant person or his partner (whether or not there are other co-owners) or is liable with the relevant person or his partner to make payments in respect of his occupation of the dwelling; e subject to paragraph (3), any person who is liable to make payments on a commercial basis to the relevant person or the relevant person’s partner or to whom or to whose partner the relevant person or the relevant person’s partner is liable to make payments on a commercial basis, in respect of the occupation of the dwelling; f a person who lives with the relevant person in order to care for him or a partner of his and who is engaged by a charitable or voluntary body (other than a public or local authority) which makes a charge to the relevant person or his partner for the services provided by that person. 3 Excepting persons to whom paragraph (2)(a) to (c) and (f) refer, a person shall be a non-dependant if he resides with a relevant person to whom he is liable to make payments in respect of the dwelling and either– a that relevant person is a close relative of his or his partner, or b the tenancy or other agreement between them is other than on a commercial basis. 4 For the purposes of this regulation– a a person resides with another only if they share any accommodation except a bathroom, a lavatory or a communal area but not if each person is separately liable to make payments in respect of his occupation of the dwelling to the landlord; b “communal area” means an area, other than a room or rooms, of common access (including halls and passageways). Remunerative work 5 1 Subject to the following provisions of this regulation, a person shall be treated for the purposes of these Regulations as engaged in remunerative work if he is engaged, or, where his hours of work fluctuate, he is engaged on average, for not less than 24 hours a week, in work for which payment is made or which is done in expectation of payment. 2 In determining the number of hours for which a person is engaged in work where his hours of work fluctuate, regard shall be had to the average of hours worked over– a if there is a recognisable cycle of work, the period of one complete cycle (including, where the cycle involves periods in which the person does not work, those periods but disregarding any other absences); b in any other case, the period of 5 weeks immediately prior to the date of the application, or such other length of time as may, in the particular case, enable the person’s weekly average hours of work to be determined more accurately. 3 Where no recognisable cycle has been established in respect of a person’s work, regard shall be had to the number of hours or, where those hours fluctuate, the average of the hours, which he is expected to work in a week. 4 A person shall be treated as engaged in remunerative work during any period for which he is absent from work referred to in paragraph (1) if the absence is either without good cause or by reason of a recognised, customary or other holiday. 5 A person in receipt of income support for more than 3 days in any period of 7 consecutive days commencing upon a Monday and ending on a Sunday shall be treated as not being in remunerative work in that week. Circumstances in which a person is to be treated as responsible or not responsible for another 6 1 Subject to the following provisions of this regulation a person shall be treated as responsible for a child or young person who is normally living with him. 2 Where there is a question as to which person a child or young person is normally living with, the child or young person shall be treated for the purposes of paragraph (1) as normally living with– a the person who is receiving child benefit in respect of him; or b if there is no such person– i where only one claim for child benefit has been made in respect of him, the person who made that claim, or ii in any other case the person who has the primary responsibility for him. 3 For the purposes of these Regulations any person other than the one treated as responsible for the child or young person under this regulation shall be treated as not so responsible. Circumstances in which a person is to be treated as being or not being a member of the household 7 1 Subject to paragraphs (2) to (4), a relevant person and any partner and, where the relevant person or his partner is treated as responsible by virtue of regulation 6 (circumstances in which a person is to be treated as responsible or not responsible for another) for a child or young person, that child or young person and any child of that child or young person, shall be treated as members of the same household where any of them is absent from the dwelling occupied as his home. 2 A child or young person shall not be treated as a member of the relevant person’s household where he is– a boarded out with the relevant person or his partner under a relevant enactment; or b boarded out with the relevant person or his partner prior to adoption; or c placed for adoption with the relevant person or his partner pursuant to a decision under the Adoption Agencies Regulations 1983 or the Adoption Agencies (Scotland) Regulations 1984 . 3 Subject to paragraph (4), paragraph (1) shall not apply to a child or young person who is not living with the relevant person and he– a is in the care of a local authority under a relevant enactment; or b has been boarded out with a person other than the relevant person prior to adoption; or c has been placed for adoption pursuant to a decision under the Adoption Agencies Regulations 1983 or the Adoption Agencies (Scotland) Regulations 1984. 4 A child or young person to whom paragraph (3)(a) applies shall be treated as being a member of the relevant person’s household in any period of 7 consecutive days commencing upon a Monday and ending on a Sunday where– a that child or young person lives with the relevant person for part or all of that period, and b it is reasonable to do so taking into account the nature and frequency of that child’s or young person’s visits. 5 In this regulation “relevant enactment” means the Army Act 1955 , the Air Force Act 1955 , the Naval Discipline Act 1957 , the Adoption Act 1958 , the Matrimonial Proceedings (Children) Act 1958 , the Children Act 1958 , the Social Work (Scotland) Act 1968 , the Family Law Reform Act 1969 , the Children and Young Persons Act 1969 , the Matrimonial Causes Act 1973 , the Guardianship Act 1973 , the Children Act 1975 , the Domestic Proceedings and Magistrates' Courts Act 1978 , the Adoption (Scotland) Act 1978 , the Child Care Act 1980 and the Foster Children Act 1980 . The applicable amount 8 The applicable amount in respect of any one application shall be the aggregate of– a the total of the weekly applicable amounts of all those persons who are relevant persons in the case of that application, and b £20; and the applicable amount of each relevant person shall be determined in accordance with regulation 12. Financial resources 9 In respect of any one application, the amount which is to be taken to be the financial resources of the applicant or applicants shall be the total of the incomes of all those persons who are relevant persons in the case of that application, and the income of each relevant person shall be determined in accordance with regulation 16. PART II REDUCTION IN AMOUNT OF GRANT Reduction in amount of grant 10 The amount of any grant which may be paid in respect of an application shall, if the financial resources of the applicant or applicants exceed the applicable amount, be reduced from what it would otherwise have been by the amount obtained by multiplying the amount of that excess by– a where the application is accompanied by an owner-occupation certificate, 51.54, b where the application is accompanied by a tenant’s certificate, 34.62. Successive applications 11 1 In this regulation “current application” means an application to which regulation 10 refers. 2 The amount by which a grant in respect of a current application is reduced shall, except where paragraph (4) applies, be abated– a in a case to which paragraph (3)(a) or (b) applies, by the amount by which any grant paid in respect of any application there referred to was itself reduced by virtue of regulation 10 and this regulation; b in a case to which paragraph (3)(c) or (d) applies, by the amount by which any grant paid in respect of any application there referred to was itself reduced, by virtue of section 111(4) of the Act, by reference to persons (other than participating landlords) who are relevant persons in the current application; c in a case to which paragraph (3)(e) applies, by the amount of any contribution notified under section 129(1) of the Act to any person who is a relevant person in the current application. 3 Subject to paragraph (4), this paragraph applies where– a within the 10 years preceding the date of approval of the current application, at least one application, accompanied by an owner-occupation certificate, relating to the same dwelling or building was made, in respect of which at least one of the relevant persons is a relevant person in the current application; b within the 5 years preceding the date of approval of the current application, at least one application, accompanied by a tenant’s certificate, relating to the same dwelling or building was made, in respect of which at least one of the relevant persons is a relevant person in the current application; c within the 10 years preceding the date of approval of the current application, at least one tenants' common parts application relating to the same building was made, in respect of which at least one of the relevant persons in the current application was an occupying tenant in relation to a flat in the building by virtue of the interest mentioned in paragraph (b) of section 105(4) of the Act (common parts grants: preliminary conditions) and was also an applicant; d within the 5 years preceding the date of approval of the current application, at least one tenants' common parts application relating to the same building was made, in respect of which at least one of the relevant persons in the current application was an occupying tenant in relation to a flat in the building by virtue of such an interest as is mentioned in any of paragraphs (c) to (e) of section 105(4) of the Act and was also an applicant; or e within the 10 years preceding the date of approval of the current application, at least one of the relevant persons in the current application signified scheme consent under section 129(1) of the Act (contributions by participants) in respect of at least one group repair scheme in relation to which the same dwelling, building or flat was, or was part of, a qualifying building. 4 Paragraph (2) does not apply in any case where, by reason of reduction of grant referred to in paragraph (2)(a) or (b), no grant was paid in respect of the application, except where the eligible works in respect of which the application was approved were executed to a satisfactory standard. PART III APPLICABLE AMOUNTS Applicable amounts 12 Subject to regulation 13 (polygamous marriages), the weekly applicable amount of a relevant person shall be the aggregate of such of the following amounts as may apply in his case– a an amount in respect of himself or, if he is a member of a couple, an amount in respect of both of them, determined in accordance with paragraph 1(1), (2) or (3), as the case may be, of Schedule 1 (applicable amounts); b an amount determined in accordance with paragraph 2 of Schedule 1 in respect of any child or young person who is a member of his family, except a child or young person whose capital, if determined in accordance with Chapter VI of Part IV (income and capital) in like manner as for the relevant person, except where otherwise provided, would exceed £5,000; c if he is a member of a family of which at least one member is a child or young person, an amount determined in accordance with Part II of Schedule 1 (family premium); d the amount of any premiums which may be applicable to him determined in accordance with Parts III and IV of Schedule 1 (premiums). Polygamous marriages 13 Where a relevant person is a member of a polygamous marriage, his weekly applicable amount shall be the aggregate of such of the following amounts as may apply in his case– a the highest amount applicable to him and one of his partners determined in accordance with paragraph 1(3) of Schedule 1 as if he and that partner were a couple; b an amount equal to the difference between the amounts specified in sub-paragraphs (3)(b) and (1)(b) of paragraph 1 of Schedule 1 in respect of each of his other partners; c an amount determined in accordance with paragraph 2 of Schedule 1 in respect of any child or young person for whom he or a partner of his is responsible and who is a member of the same household, except a child or young person whose capital, if determined in accordance with Chapter VI of Part IV (income and capital) in like manner as for the relevant person, except where otherwise provided, would exceed £5,000; d if he or another partner of the polygamous marriage is responsible for a child or young person who is a member of the same household, the amount specified in Part II of Schedule 1 (family premium); e the amount of any premiums which may be applicable to him determined in accordance with Parts III and IV of Schedule 1 (premiums). PART IV INCOME AND CAPITAL CHAPTER I GENERAL Income and capital of relevant person 14 Where a relevant person is a member of a family, the income and capital of any member of that family shall, except where otherwise provided, be treated as the income and capital of that person. Determination of income and capital of members of relevant person’s family and of a polygamous marriage 15 1 The income and capital of a relevant person’s partner and, subject to paragraph (2) and to regulation 29 (modifications in respect of child and young person), the income of a child or young person which by virtue of regulation 14 is to be treated as income and capital of the relevant person shall be determined in accordance with the following provisions of this Part in like manner as for the relevant person; and any reference to the relevant person shall, except where the context otherwise requires, be construed for the purposes of this Part as if it were a reference to his partner or that child or young person. 2 Regulations 22(2) and 24(2), so far as they relate to paragraphs 1 to 10 of Schedule 2 (sums to be disregarded in the determination of earnings), shall not apply to a child or young person. 3 Where a relevant person or the partner of that person is married polygamously to two or more members of his household– a the relevant person shall be treated as possessing capital and income belonging to each such member and the income of any child or young person who is one of that member’s family; and b the income and capital of that member or, as the case may be, the income of that child or young person shall be determined in accordance with the following provisions of this Part in like manner as for the relevant person or, as the case may be, as for any child or young person who is a member of his family. CHAPTER II INCOME Determination of income on a weekly basis 16 1 The income of a relevant person shall be determined on a weekly basis by aggregating– a his average weekly earnings from employment as an employed earner, determined in accordance with this Chapter and Chapter III of this Part, b his average weekly earnings from employment as a self-employed earner, determined in accordance with this Chapter and Chapter IV of this Part, c his average weekly income other than earnings, determined in accordance with this Chapter and Chapter V of this Part, d the weekly tariff income determined under regulation 37 (determination of tariff income from capital). 2 For the purposes of paragraph (1) “income” includes income derived under regulations 27 and 28 (capital treated as income and notional income). Average weekly earnings of employed earners 17 Where the income of a relevant person consists of or includes earnings from employment as an employed earner, his average weekly earnings from such employment shall be determined by reference to his earnings from such employment over the period of 52 weeks immediately preceding the application or, where his earnings fluctuate, over such other lesser period immediately preceding the application as may enable his average weekly earnings to be determined more accurately. Average weekly earnings of self-employed earners 18 Where the income of a relevant person consists of or includes earnings from employment as a self-employed earner, his average weekly earnings from such employment shall be determined by reference to his earnings from such employment over such period, not exceeding 52 weeks immediately preceding the application, as is appropriate in order that his average weekly earnings over such period may be determined accurately. Average weekly income other than earnings 19 Any part of a relevant person’s income which does not consist of earnings shall be determined by reference to such income over such period not exceeding 52 weeks immediately preceding the application as is appropriate in order that his average weekly income over such period may be determined accurately. Determination of weekly income 20 For the purposes of regulations 17 to 19 (average weekly income), where the period in respect of which a payment is made– a does not exceed a week, the weekly amount shall be the amount of that payment; b exceeds a week, the weekly amount shall 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 any other case, by dividing the amount of the payment by the number equal to the number of days in the period to which it relates and multiplying the quotient by 7. CHAPTER III EMPLOYED EARNERS Earnings of employed earners 21 1 Subject to paragraph (2), “earnings” means in the case of employment as an employed earner, any remuneration or profit derived from that employment and includes– a any bonus or commission; b any payment in lieu of remuneration except any periodic sum paid to a relevant person on account of the termination of his employment by reason of redundancy; c any payment in lieu of notice or any lump sum payment intended as compensation for the loss of employment but only insofar as it represents loss of income; d any holiday pay except any payable more than 4 weeks after termination or interruption of the employment; e any payment by way of a retainer; f any payment made by the relevant person’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 employer in respect of– i travelling expenses incurred by the relevant person between his home and place of employment, ii expenses incurred by the relevant person under arrangements made for the care of a member of his family owing to the relevant person’s absence from home; g any award of compensation made under section 68(2) or 71(2)(a) of the Employment Protection (Consolidation) Act 1978 (remedies and compensa tion for unfair dismissal); h any such sum as is referred to in section 18(2) of the Social Security (Miscellaneous Provisions) Act 1977 (certain sums to be earnings for social security purposes); i any statutory sick pay under Part I of the Social Security and Housing Benefits Act 1982 or statutory maternity pay under Part V of the 1986 Act. 2 Earnings shall not include– a 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. Determination of net earnings of employed earners 22 1 For the purposes of regulation 17 (average weekly earnings of employed earners), the earnings of a relevant person derived from employment as an employed earner to be taken into account shall, subject to paragraph (2), be his net earnings as determined under paragraph (3). 2 There shall be disregarded from a relevant person’s net earnings, any sum, where applicable, specified in paragraphs 1 to 11 of Schedule 2. 3 For the purposes of paragraph (1) net earnings shall be determined by taking into account the gross earnings of the relevant person 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 1975 Act ; and b one-half of any sum paid by the relevant person by way of a contribution towards an occupational or personal pension scheme. CHAPTER IV SELF-EMPLOYED EARNERS Earnings of self-employed earners 23 “Earnings”, in the case of employment as a self-employed earner, means the gross income of the employment and shall include any allowance paid under section 2 of the Employment and Training Act 1973 to the relevant person for the purpose of assisting him in carrying on his business. Determination of net profit of self-employed earners 24 1 For the purposes of regulation 18 (average weekly earnings of self-employed earners) the earnings of a relevant person to be taken into account shall be– a in the case of a self-employed earner who is engaged in employment on his own account, the net profit derived from that employment; b in the case of a self-employed earner whose employment is carried on in partnership or is that of a share fisherman within the meaning of the Social Security (Mariners' Benefits) Regulations 1975 , his share of the net profit derived from that employment, less– i an amount in respect of income tax and of social security contributions payable under the 1975 Act determined in accordance with regulation 25 (deduction of tax and contributions for self-employed earners), and ii one-half of any qualifying premium payable. 2 There shall be disregarded from a relevant person’s net profit, any sum, where applicable, specified in paragraphs 1 to 11 of Schedule 2. 3 For the purposes of paragraph (1)(a) the net profit of the employment shall, except where paragraph (9) applies, be determined by taking into account the earnings of the employment over the assessment period less– a subject to paragraphs (5) to (7), any expenses wholly and exclusively incurred in that period for the purposes of that employment; b an amount in respect of– i income tax, and ii social security contributions payable under the 1975 Act, determined in accordance with regulation 25 (deduction of tax and contributions for self-employed earners); and c one-half of any qualifying premium payable. 4 For the purposes of paragraph (1)(b) the net profit of the employment shall be determined by taking into account the earnings of the employment over the assessment period less, subject to paragraphs (5) to (7), any expenses wholly and exclusively incurred in that period for the purposes of the employment. 5 Subject to paragraph (6), no deduction shall be made under paragraph (3)(a) or (4), in respect of– a any capital expenditure; b any depreciation of any capital asset; c any sum employed or intended to be employed in the setting up or expansion of the employment; d any loss incurred before the beginning of the assessment period; e the repayment of capital on any loan taken out for the purposes of the employment; f any expenses incurred in providing business entertainment; and g any debts, except bad debts proved to be such, but this sub-paragraph shall not apply to any expenses incurred in the recovery of a debt. 6 A deduction shall be made under paragraph (3)(a) or (4) in respect of the repayment of capital on any loan used for– a the replacement in the course of business of equipment or machinery; and b the repair of an existing business asset except to the extent that any sum is payable under an insurance policy for its repair. 7 The local housing authority shall not make a deduction in respect of any expenses under paragraph (3)(a) or (4) where, given the nature and the amount of the expense, it has been unreasonably incurred. 8 For the avoidance of doubt– a a deduction shall not be made under paragraph (3)(a) or (4) in respect of any sum unless it has been expended for the purposes of the business; b a deduction shall be made thereunder in respect of– i the excess of any value added tax paid over value added tax received in the assessment period; ii any income expended in the repair of an existing business asset except to the extent that any sum is payable under an insurance policy for its repair; iii any payment of interest on a loan taken out for the purposes of the employment. 9 Where a relevant person is engaged in employment as a child minder the net profit of the employment shall be one-third of the earnings of that employment, less– a an amount in respect of– i income tax, and ii social security contributions payable under the 1975 Act, determined in accordance with regulation 25 (deduction of tax and contribu tions for self-employed earners); and b one-half of any qualifying premium payable. 10 For the avoidance of doubt where a relevant person is engaged in employment as a self-employed earner and he is also engaged in one or more other employments as a self-employed earner or employed earner any loss incurred in any one of his employments shall not be offset against his earnings in any other of his employments. 11 In this regulation “qualifying premium” means any premium or other consideration payable under an annuity contract for the time being approved by the Board of Inland Revenue as having for its main object the provision for the relevant person of a life annuity in old age or the provision of an annuity for his partner or for any one or more of his dependants and in respect of which relief for income tax may be given. Deduction of tax and contributions for self-employed earners 25 1 The amount to be deducted in respect of income tax under regulation 24(1)(b)(i), (3)(b)(i) or (9)(a)(i) (determination of net profit of self-employed earners) shall be determined on the basis of the amount of chargeable income and as if that income were assessable to income tax at the basic rate of tax in the year of assessment in which the application was made less only the personal relief to which the relevant person is entitled under sections 257(1), (6) and (7) and 259(1)(a) and (2) of the Income and Corporation Taxes Act 1988 (personal relief) as is appropriate to his circumstances; but, if the assessment period is less than a year, the amount of the personal relief deductable under this paragraph shall be calculated on a pro-rata basis. 2 The amount to be deducted in respect of social security contributions under regulation 24(1)(b)(i), 3(b)(ii) or (9)(a)(ii) shall be the total of– a the amount of Class 2 contributions payable under section 7(1) or, as the case may be, (4) of the 1975 Act except where the relevant person’s chargeable income is less than the amount for the time being specified in section 7(5) of that Act (small earnings exception); and b the amount of Class 4 contributions (if any) which would be payable under section 9 of that Act (Class 4 contributions recoverable under Tax Acts) in respect of profits or gains equal to the amount of that income. 3 In this regulation “chargeable income” means– a except where sub-paragraph (b) applies, the earnings derived from the employment less any expenses deducted under paragraph (3)(a) or, as the case may be, (4) of regulation 24; b in the case of employment as a child minder, one third of the earnings of that employment. CHAPTER V OTHER INCOME Determination of income other than earnings 26 1 For the purposes of regulation 19 (average weekly income other than earnings), the income of a relevant person which does not consist of earnings to be taken into account shall, subject to paragraphs (2) and (3), be his gross income and any capital treated as income under regulation 27 (capital treated as income). 2 There shall be disregarded from the determination of a relevant person’s gross income under paragraph (1) any sum, where applicable, specified in Schedule 3. 3 Where the payment of any benefit under the benefit Acts is subject to any deduction by way of recovery the amount to be taken into account under paragraph (1) shall be the gross amount payable. 4 For the avoidance of doubt there shall be included as income to be taken into account under paragraph (1) any payment to which regulation 21(2) applies (payments not earnings). Capital treated as income 27 Any payment received under an annuity, and any earnings to the extent that they are not a payment of income, shall be treated as income. Notional income 28 1 A relevant person shall be treated as possessing income of which he has deprived himself for the purpose of increasing the amount of grant. 2 Except in the case of a discretionary trust or a trust derived from a payment made in consequence of a personal injury, any income which would have become available to the relevant person upon application being made, but which has not been acquired by him, shall be treated as possessed by the relevant person but only from the date on which it could be expected to have been acquired had an application been made. 3 Any payment of income, other than a payment of income made under the Macfarlane Trust, the MacFarlane (Special Payments) Trust or the Independent Living Fund, made– a to a third party in respect of a relevant person being a single person or in respect of a member of the family (but not a member of the third party’s family) shall be treated as possessed by that single person or by that member to the extent that it is used for the food, ordinary clothing or footwear, household fuel, eligible rates or rent to which regulation 9 or 10 of the Housing Benefit (General) Regulations 1987 refers , or both, of that single person or, as the case may be, of any member of that family or is used for any personal community charge or collective community charge contribution for which that relevant person or member is liable; b to a relevant person being a single person or a member of the family in respect of a third party (but not in respect of another member of that family) shall be treated as possessed by that single person or, as the case may be, that member of the family to the extent that it is kept or used by him or used by or on behalf of any member of the family. 4 Where– a a relevant person performs a service for another person; and b that person makes no payment of earnings or pays less than that paid for a comparable employment in the area; and c it is not the case that the means of that person are insufficient for him to pay or to pay more for the service, the local housing authority shall treat the relevant person as possessing such earnings (if any) as is reasonable for that employment; but this paragraph shall not apply to a relevant person who is engaged by a charitable or voluntary body or is a volunteer if it is reasonable for him to provide his services free of charge. 5 In the case of an application to which section 126(3)(b) of the Act applies (renovation grants relating to two or more dwellings), there shall be treated as possessed by the relevant person 90 per cent. of the amount of the aggregate of the rents of each of the dwellings to be provided, other than any in respect of which an owner-occupation certificate accompanies the application, which may reasonably be expected to be obtained on a letting on the open market under an assured tenancy and assuming that no premium is paid. 6 Where a relevant person is treated as possessing any income under any of paragraphs (1) to (3) and (5) the foregoing provisions of this Part shall apply for the purposes of determining the amount of that income as if a payment had actually been made and as if it were actual income which he does possess. 7 Where a relevant person is treated as possessing any earnings under paragraph (4) the foregoing provisions of this Part shall apply for the purposes of determining the amount of those earnings as if a payment had actually been made and as if they were actual earnings which he does possess except that paragraph (3) of regulation 22 (determination of net earnings of employed earners) shall not apply and his net earnings shall be determined by taking into account those earnings which he is treated as possessing, less– a an amount in respect of income tax equivalent to an amount determined by applying to those earnings the basic rate of tax in the year of assessment in which the application was made less only the personal relief to which the relevant person is entitled under sections 257(1), (6) and (7) and 259(1)(a) and (2) of the Income and Corporation Taxes Act 1988 (personal relief) as is appropriate to his circumstances; but if the assessment period is less than a year the amount of the personal relief deductible under this sub-paragraph shall be determined on a pro-rata basis; b an amount in respect of primary Class 1 contributions payable under the 1975 Act in respect of those earnings; and c one-half of any sum payable by the relevant person by way of a contribution towards an occupational or personal pension scheme. 8 In paragraph (3) the expression “ordinary clothing or footwear” means clothing or footwear for normal daily use, but does not include school uniforms, or clothing or footwear used solely for sporting activities. Modifications in respect of children and young persons 29 1 Where the income of a child or young person determined in accordance with the foregoing provisions of this Part exceeds the amount included under Schedule 1 in the determination of the relevant person’s applicable amount for that child or young person by way of the personal allowance and disabled child premium, if any, the excess shall not be treated as income of the relevant person. 2 Where the capital of a child or young person, if determined in accordance with Chapter VI in like manner as for the relevant person, except where otherwise provided, would exceed £5,000, any income of that child or young person shall not be treated as income of the relevant person. 3 In determining the net earnings or net profit of a child or young person there shall be disregarded (in addition to any sum which falls to be disregarded under paragraphs 11 and 12) any sum specified in paragraphs 13 and 14 of Schedule 2. 4 Any income of a child or young person which is to be disregarded under Schedule 3 shall be disregarded in such manner as to produce the result most favourable to the relevant person. CHAPTER VI CAPITAL Determination of capital 30 1 The capital of a relevant person to be taken into account shall, subject to paragraph (2), be the whole of his capital determined in accordance with this Part and any income treated as capital under regulation 32 (income treated as capital). 2 There shall be disregarded from the determination of a relevant person’s capital under paragraph (1), any capital, where applicable, specified in Schedule 4. Disregard of capital of child or young person 31 The capital of a child or young person who is a member of the relevant person’s family shall not be treated as capital of the relevant person. Income treated as capital 32 1 Any bounty derived from employment to which paragraph 6 of Schedule 2 applies and paid at intervals of at least one year shall be treated as capital. 2 Any amount by way of a refund of income tax deducted from profits or emoluments chargeable to income tax under Schedule D or E shall be treated as capital. 3 Any holiday pay which is not earnings under regulation 21(1)(d) (earnings of employed earners) shall be treated as capital. 4 Except any income derived from capital disregarded under paragraphs 1, 2, 3, 5, 8, 14, 25 or 26 of Schedule 4, any income derived from capital shall be treated as capital but only from the date it is normally due to be credited to the relevant person’s account. 5 In the case of employment as an employed earner, any advance of earnings or any loan made by the relevant person’s employer shall be treated as capital. 6 Any charitable or voluntary payment which is not made or due to be made at regular intervals, other than a payment which is made under the MacFarlane Trust, the MacFarlane (Special Payments) Trust or the Independent Living Fund, shall be treated as capital. Determination of capital in the United Kingdom 33 Capital which a relevant person possesses in the United Kingdom shall be determined– a except in a case to which sub-paragraph (b) applies, at its current market or surrender value less– i where there would be expenses attributable to sale, 10 per cent., and ii the amount of any incumbrance secured on it; b in the case of a National Savings Certificate– i if purchased from an issue the sale of which ceased before 1st July last preceding the date of the application, at the price which it would have realised on that 1st July had it been purchased on the last day of that issue; ii in any other case, at its purchase price. Determination of capital outside the United Kingdom 34 Capital which a relevant person possesses in a country outside the United Kingdom shall be determined– a in a case where there is no prohibition in that country against the transfer to the United Kingdom of an amount equal to its current market or surrender value in that country, at that value; b in a case where there is such a prohibition, at the price which it would realise if sold in the United Kingdom to a willing buyer; less, where there would be expenses attributable to sale, 10 per cent. and the amount of any incumbrance secured on it. Notional capital 35 1 A relevant person shall be treated as possessing capital of which he has deprived himself for the purpose of increasing the amount of grant. 2 Except in the case of– a a discretionary trust; or b a trust derived from a payment made in consequence of a personal injury; or c any loan which would be obtained only if secured against capital disregarded under Schedule 4, any capital which would have become available to the relevant person upon application being made, but which has not been acquired by him, shall be treated as possessed by him but only from the date on which it could be expected to have been acquired had an application been made. 3 Any payment of capital, other than a payment of capital made under the Macfarlane Trust, the MacFarlane (Special Payments) Trust or the Independent Living Fund, made– a to a third party in respect of a single relevant person or in respect of a member of the family (but not a member of the third party’s family) shall be treated as possessed by that single person or by that member to the extent that it is used for the food, ordinary clothing or footwear, household fuel, eligible rates or rent to which regulation 9 or 10 of the Housing Benefit (General) Regulations 1987 refers, or both, of that single person or, as the case may be, of any member of that family or is used for any personal community charge or collective community charge contribution for which that relevant person or member is liable; b to a single relevant person or a member of the family in respect of a third party (but not in respect of another member of that family) shall be treated as possessed by that single person or, as the case may be, that member of the family to the extent that it is kept or used by him or used by or on behalf of any member of the family. 4 Where a relevant person stands in relation to a company in a position analogous to that of a sole owner or partner in the business of that company, he may be treated as if he were such sole owner or partner and in such a case– a the value of his holding in that company shall, notwithstanding regulation 30 (determination of capital), be disregarded; and b he shall, subject to paragraph (5), be treated as possessing an amount of capital equal to the value or, as the case may be, his share of the value of the capital of that company and the foregoing provisions of this Chapter shall apply for the purposes of determining that amount as if it were actual capital which he does possess. 5 For so long as the relevant person undertakes activities in the course of the business of the company, the amount which he is treated as possessing under paragraph (4) shall be disregarded. 6 Where a relevant person is treated as possessing capital under any of paragraphs (1) to (3) the foregoing provisions of this Chapter shall apply for the purposes of determining its amount as if it were actual capital which he does possess. 7 In paragraph (3) the expression “ordinary clothing or footwear” means clothing or footwear for normal daily use but does not include school uniforms, or clothing or footwear used solely for sporting activities. Capital jointly held 36 Except where a relevant person possesses capital which is disregarded under regulation 35(4) (notional capital) where a relevant person and one or more persons are beneficially entitled in possession to any capital asset they shall be treated as if each of them were entitled in possession to the whole beneficial interest therein in an equal share and the foregoing provisions of this Chapter shall apply for the purposes of determining the amount of capital which the relevant person is treated as possessing as if it were actual capital which the relevant person does possess. Determination of tariff income from capital 37 1 Where the relevant person’s capital determined in accordance with this Part exceeds £5000 it shall be treated as equivalent to a weekly tariff income of £1 for each complete £250 in excess of £5000. 2 Notwithstanding paragraph (1) where any part of the excess is not a complete £250 that part shall be treated as equivalent to a weekly tariff income of £1. 3 For the purposes of paragraph (1), capital includes any income treated as capital under regulation 32 (income treated as capital). PART V STUDENTS Interpretation 38 In this Part, unless the context otherwise requires– “contribution” means any contribution in respect of the income of any other person which a Minister of the Crown or an education authority as defined in regulation 46 of the Housing Benefit (General) Regulations 1987 takes into account in assessing the amount of the student’s grant and by which the amount is, as a consequence, reduced; “course of study” means any full-time or part-time course of study or sandwich course whether or not a grant is made for attending it; “full-time student” includes a student on a sandwich course; “grant” means any kind of educational grant or award and includes any scholarship, studentship, exhibition, allowance or bursary; “grant income” means– any income by way of a grant; any contribution whether or not it is paid; “sandwich course” has the meaning prescribed in paragraph 1(1) of Schedule 5 to the Education (Mandatory Awards) Regulations 1988 ; “student” means a person who is attending a course of study at an educational establishment including a registered student. Treatment of students 39 These Regulations shall have effect in relation to students subject to the following provisions of this Part. Determination of grant income 40 1 The amount of a student’s grant income to be taken into account shall, subject to paragraph (2), be the whole of his grant income. 2 There shall be excluded from a student’s grant income any payment– a intended to meet tuition fees or examination fees; b intended to meet the cost of special equipment for a student on a course which began before 1st September 1986 in architecture, art and design, home economics, landscape architecture, medicine, music, opthalmic optics, orthop tics, physical education, physiotherapy, radiography, occupational therapy, dental hygiene, dental therapy, remedial gymnastics, town and country planning and veterinary science or medicine; c in respect of the student’s disability; d intended to meet additional expenditure connected with term time residential study away from the student’s educational establishment; e on account of the student maintaining a home at a place other than that at which he resides during his course; f on account of any other person but only if that person is residing outside of the United Kingdom and there is no applicable amount in respect of him; g intended to meet the cost of books and equipment (other than special equipment) or, in the case of a full-time student, if not so intended an amount equal to £234 towards such costs; h intended to meet travel expenses incurred as a result of his attendance on the course. Relationship with amounts to be disregarded under Schedule 3 41 No part of a student’s grant income shall be disregarded under paragraph 13 of Schedule 3 (sums to be disregarded in the determination of income other than earnings). Other amounts to be disregarded 42 For the purposes of ascertaining income other than grant income, any amounts intended for any expenditure specified in regulation 40(2) (determination of grant income), necessary as a result of his attendance on the course shall be disregarded but only if, and to the extent that, the necessary expenditure exceeds or is likely to exceed the amount of the sums disregarded under regulation 40(2) on like expenditure. Disregard of contribution 43 Where the relevant person or his partner is a student and the income of one is taken into account for the purposes of assessing a contribution to the student’s grant, an amount equal to the contribution shall be disregarded for the purposes of determining the income of the one liable to make that contribution. Chris Patten Secretary of State for the Environment 24th May 1990 David Hunt Secretary of State for Wales 24th May 1990 We consent, John Taylor Kenneth Carlisle Two of the Lords Commissioners of Her Majesty’s Treasury 5th June 1990