SOCIAL SECURITY Citation, commencement and interpretation 1 1 These Regulations may be cited as the Social Security (Miscellaneous Amendments) (No. 4) Regulations 1998 and shall come into force on 1st June 1998. 2 In these Regulations— ... “the Disability Working Allowance Regulations" means the Disability Working Allowance (General) Regulations 1991 ; “the Family Credit Regulations" means the Family Credit (General) Regulations 1987 ; ... “the Income Support Regulations" means the Income Support (General) Regulations 1987 ; “the Jobseeker’s Allowance Regulations" means the Jobseeker’s Allowance Regulations 1996 . Revocation 2 The Jobseeker’s Allowance (Amendment) Regulations 1998 (which increase the number of waiting days for a jobseeker’s allowance from 3 to 7) are hereby revoked. Amendment of the Jobseeker’s Allowance Regulations 3 1 The Jobseeker’s Allowance Regulations shall be amended in accordance with the following paragraphs of this regulation. 2 For paragraph (1)(a)(ii)(aa) of regulation 75 there shall be substituted the following sub-head— aa the Employment Option of the New Deal, being a programme which lasts for any individual for up to 26 weeks and which includes for that individual— i employed earner’s employment, training and support; or ii assistance in pursuing self-employed earner’s employment; . 3 After regulation 88 there shall be inserted the following regulation— Income of participants in the self-employment route of the Employment Option of the New Deal 88A Chapters II , III , IV , V, VII and VIII of this Part and regulations 131 to 136, 138 and 139 shall not apply to any income which is to be calculated in accordance with Chapter IVA of this Part (participants in the self-employment route of the Employment Option of the New Deal). . 4 After regulation 102 there shall be inserted the following Chapter— CHAPTER IVA PARTICIPANTS IN THE SELF-EMPLOYMENT ROUTE OF THE EMPLOYMENT OPTION OF THE NEW DEAL Interpretation 102A In this Chapter— “self-employment route" means that part of the Employment Option of the New Deal which is specified in regulation 75(1)(a)(ii)(aa)(ii); “special account" means, where a person was carrying on a commercial activity in respect of which assistance was received under the self-employment route, the account into which the gross receipts from that activity were payable during the period in respect of which such assistance was received. Treatment of gross receipts of participants in the self-employment route of the Employment Option of the New Deal 102B The gross receipts of a commercial activity carried on by a person in respect of which assistance is received under the self-employment route, shall be taken into account in accordance with the following provisions of this Chapter. Calculation of income of participants in the self-employment route of the Employment Option of the New Deal 102C 1 The income of a person who has received assistance under the self-employment route shall be calculated by taking into account the whole of the monies in the special account at the end of the last day upon which such assistance was received and deducting from those monies— a an amount in respect of income tax calculated in accordance with regulation 102D (deduction in respect of tax for participants in the self-employment route of the Employment Option of the New Deal); and b any sum to which paragraph (4) refers. 2 Income calculated pursuant to paragraph (1) shall be apportioned equally over a period which starts on the date the income is treated as paid under paragraph (3) and is equal in length to the period beginning with the day upon which assistance was first received under the self-employment route and ending on the last day upon which such assistance was received. 3 Income calculated pursuant to paragraph (1) shall be treated as paid— a in the case where it is due to be paid before the first benefit week in respect of which the participant or his partner first claims a jobseeker’s allowance following the last day upon which assistance was received under the self-employment route, on the day in the week in which it is due to be paid which corresponds to the first day of the benefit week; b in any other case, on the first day of the benefit week in which it is due to be paid. 4 This paragraph refers, where applicable in each benefit week in respect of which income calculated pursuant to paragraph (1) is taken into account pursuant to paragraphs (2) and (3), to the sums which would have been disregarded under paragraphs 5 to 8, 11 and 12 of Schedule 6 had the income been earnings. Deduction in respect of tax for participants in the self-employment route of the Employment Option of the New Deal 102D 1 The amount to be deducted in respect of income tax under regulation 102C(1)(a) (calculation of income of participants in the self-employment route of the Employment Option of the New Deal) in respect of the period determined under regulation 102C(2) shall be calculated as if— a the chargeable income is the only income chargeable to tax; b the personal reliefs which are applicable to the person receiving assistance under the self-employment route by virtue of sections 257(1), 257A(1) and 259 of the Income and Corporation Taxes Act 1988 (personal reliefs) are allowable against that income; and c the rate at which the chargeable income less the personal relief is assessable to income tax is the lower rate of tax or, as the case may be, the lower rate and the basic rate of tax. 2 For the purpose of paragraph (1), the lower rate of tax to be applied and the amount of the personal relief deductible shall, where the period determined under regulation 102C(2) is less than a year, be calculated on a pro rata basis. 3 In this regulation, “chargeable income" means the monies in the special account at the end of the last day upon which assistance was received under the self-employment route. . Income to be disregarded 4 In Schedule 7 to the Jobseeker’s Allowance Regulations (income to be disregarded)— a for paragraph 60, there shall be substituted the following paragraph— 60 Any mandatory top-up payment made to a person pursuant to section 2 of the Employment and Training Act 1973 in respect of that person’s participation in an employment programme specified in— a regulation 75(1)(a)(ii)(aa)(ii) (self-employment route of the Employment Option of the New Deal); b regulation 75(1)(a)(ii)(bb) (Voluntary Sector Option of the New Deal); or c regulation 75(1)(a)(ii)(cc) (Environment Task Force Option of the New Deal). ; b at the end there shall be added the following paragraph— 62 1 Subject to sub-paragraph (2), in the case of a person who is receiving, or who has received, assistance under an employment programme specified in regulation 75(1)(a)(ii)(aa)(ii) (self-employment route of the Employment Option of the New Deal), any payment to that person— a to meet expenses wholly and necessarily incurred whilst carrying on the commercial activity; b which is used or intended to be used to maintain repayments on a loan taken out by that person for the purpose of establishing or carrying on the commercial activity, in respect of which such assistance is or was received. 2 Sub-paragraph (1) shall apply only in respect of payments which are paid to that person from the special account as defined for the purposes of Chapter IVA of Part VIII. . Capital to be disregarded 5 In Schedule 8 to the Jobseeker’s Allowance Regulations (capital to be disregarded)— a in paragraph 11, at the end, there shall be added the following sub-paragraphs— 3 In the case of a person who is receiving assistance under an employment programme specified in regulation 75(1)(a)(ii)(aa)(ii) (self-employment route of the Employment Option of the New Deal), the assets acquired by that person for the purpose of establishing or carrying on the commercial activity in respect of which such assistance is being received. 4 In the case of a person who has ceased carrying on the commercial activity in respect of which assistance was received as specified in sub-paragraph (3), the assets relating to that activity for such period as may be reasonable in the circumstances to allow for disposal of any such asset. ; b for paragraph 45 there shall be substituted the following paragraph— 45 Any mandatory top-up payment made to a person pursuant to section 2 of the Employment and Training Act 1973 in respect of that person’s participation in an employment programme specified in— a regulation 75(1)(a)(ii)(aa)(ii) (self-employment route of the Employment Option of the New Deal); b regulation 75(1)(a)(ii)(bb) (Voluntary Sector Option of the New Deal); or c regulation 75(1)(a)(ii)(cc) (Environment Task Force Option of the New Deal), but only for a period of 52 weeks from the date of receipt of the payment. ; c at the end there shall be added the following paragraph— 47 In the case of a person who is receiving, or who has received, assistance under an employment programme specified in regulation 75(1)(a)(ii)(aa)(ii) (self-employment route of the Employment Option of the New Deal), any sum of capital which is acquired by that person for the purpose of establishing or carrying on the commercial activity in respect of which such assistance is or was received but only for a period of 52 weeks from the date on which that sum was acquired. . Amendment of the Income Support Regulations 6 1 The Income Support Regulations shall be amended in accordance with the following paragraphs of this regulation. 2 After regulation 23 there shall be inserted the following regulation— Income of participants in the self-employment route of the Employment Option of the New Deal 23A Chapters II, III, IV, V, VII and VIIA of this Part and regulations 62 to 66A, 68 and 69 shall not apply to any income which is to be calculated in accordance with Chapter IVA of this Part (participants in the self-employment route of the Employment Option of the New Deal). . 3 After regulation 39 there shall be inserted the following Chapter— CHAPTER IVA PARTICIPANTS IN THE SELF-EMPLOYMENT ROUTE OF THE EMPLOYMENT OPTION OF THE NEW DEAL Interpretation 39A In this Chapter— “self-employment route" means that part of the Employment Option of the New Deal which is specified in regulation 75(1)(a)(ii)(aa)(ii) of the Jobseeker’s Allowance Regulations 1996; “special account" means, where a person was carrying on a commercial activity in respect of which assistance is received under the self-employment route, the account into which the gross receipts from that activity were payable during the period in respect of which such assistance was received. Treatment of gross receipts of participants in the self-employment route of the Employment Option of the New Deal 39B The gross receipts of a commercial activity carried on by a person in respect of which assistance is received under the self-employment route, shall be taken into account in accordance with the following provisions of this Chapter. Calculation of income of participants in the self-employment route of the Employment Option of the New Deal 39C 1 The income of a person who has received assistance under the self-employment route shall be calculated by taking into account the whole of the monies in the special account at the end of the last day upon which such assistance was received and deducting from those monies— a an amount in respect of income tax calculated in accordance with regulation 39D (deduction in respect of tax for participants in the self-employment route of the Employment Option of the New Deal); and b any sum to which paragraph (4) refers. 2 Income calculated pursuant to paragraph (1) shall be apportioned equally over a period which starts on the date the income is treated as paid under paragraph (3) and is equal in length to the period beginning with the day upon which assistance was first received under the self-employment route and ending on the last day upon which such assistance was received. 3 Income calculated pursuant to paragraph (1) shall be treated as paid— a in the case where it is due to be paid before the first benefit week in respect of which the participant or his partner first claims income support following the last day upon which assistance was received under the self-employment route, on the day in the week in which it is due to be paid which corresponds to the first day of the benefit week; b in any other case, on the first day of the benefit week in which it is due to be paid. 4 This paragraph refers, where applicable in each benefit week in respect of which income calculated pursuant to paragraph (1) is taken into account pursuant to paragraphs (2) and (3), to the sums which would have been disregarded under paragraphs 4 to 6B and 9 of Schedule 8 had the income been earnings. Deduction in respect of tax for participants in the self-employment route of the Employment Option of the New Deal 39D 1 The amount to be deducted in respect of income tax under regulation 39C(1)(a) (calculation of income of participants in the self-employment route of the Employment Option of the New Deal) in respect of the period determined under regulation 39C(2) shall be calculated as if— a the chargeable income is the only income chargeable to tax; b the personal reliefs which are applicable to the person receiving assistance under the self-employment route by virtue of sections 257(1), 257A(1) and 259 of the Income and Corporation Taxes Act 1988 (personal reliefs) are allowable against that income; and c the rate at which the chargeable income less the personal relief is assessable to income tax is the lower rate of tax or, as the case may be, the lower rate and the basic rate of tax. 2 For the purpose of paragraph (1), the lower rate of tax to be applied and the amount of the personal relief deductible shall, where the period determined under regulation 39C(2) is less than a year, be calculated on a pro rata basis. 3 In this regulation, “chargeable income" means the monies in the special account at the end of the last day upon which assistance was received under the self-employment route. . 4 At the end of Schedule 9 (sums to be disregarded in the calculation of income other than earnings) there shall be added the following paragraph— 64 1 Subject to sub-paragraph (2), in the case of a person who is receiving, or who has received, assistance under an employment programme specified in regulation 75(1)(a)(ii)(aa)(ii) of the Jobseeker’s Allowance Regulations 1996 (self-employment route of the Employment Option of the New Deal), any payment to the person— a to meet expenses wholly and necessarily incurred whilst carrying on the commercial activity; b which is used or intended to be used to maintain repayments on a loan taken out by that person for the purpose of establishing or carrying on the commercial activity, in respect of which such assistance is or was received. 2 Sub-paragraph (1) shall apply only in respect of payments which are paid to that person from the special account as defined for the purposes of Chapter IVA of Part V. . Common amendments 7 1 At the end of each of the regulations specified in paragraph (2) of this regulation (which relate to income to be treated as capital) there shall be added the following paragraph— 7 There shall be treated as capital the gross receipts of any commercial activity carried on by a person in respect of which assistance is received under an employment programme specified in regulation 75(1)(a)(ii)(aa)(ii) of the Jobseeker’s Allowance Regulations 1996 (self-employment route of the Employment Option of the New Deal), but only in so far as those receipts were payable into a special account (as defined for the purposes of Chapter IVA of Part VIII of those Regulations) during the period in which that person was receiving such assistance. . 2 The regulations for the purposes of paragraph (1) of this regulation are— a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b regulation 34 of the Disability Working Allowance Regulations; c regulation 31 of the Family Credit Regulations; d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 For each of the numbered paragraphs of the Schedules specified in paragraph (4) of this regulation (which relate to sums to be disregarded in the calculation of income other than earnings), there shall be substituted the following paragraph— Any mandatory top-up payment made to a person pursuant to section 2 of the Employment and Training Act 1973 in respect of that person’s participation in an employment programme specified in— a regulation 75(1)(a)(ii)(aa)(ii) of the Jobseeker’s Allowance Regulations 1996 (self-employment route of the Employment Option of the New Deal); b regulation 75(1)(a)(ii)(bb) of those Regulations (Voluntary Sector Option of the New Deal); or c regulation 75(1)(a)(ii)(cc) of those Regulations (Environment Task Force Option of the New Deal). . 4 The respective paragraph numbers and Schedules for the purposes of paragraph (3) of this regulation are— a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b paragraph 57 of Schedule 3 to the Disability Working Allowance Regulations; c paragraph 59 of Schedule 2 to the Family Credit Regulations; d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . e paragraph 62 of Schedule 9 to the Income Support Regulations. 5 At the end of each of the Schedules specified in paragraph (6) of this regulation (which relate to income other than earnings to be disregarded) there shall be added the following paragraph bearing the specified respective paragraph number— 1 Subject to sub-paragraph (2), in respect of a person who is receiving, or who has received, assistance under an employment programme specified in regulation 75(1)(a)(ii)(aa)(ii) of the Jobseeker’s Allowance Regulations 1996 (self-employment route of the Employment Option of the New Deal), any payment to that person— a to meet expenses wholly and necessarily incurred whilst carrying on the commercial activity; b which is used or intended to be used to maintain repayments on a loan taken out by that person for the purpose of establishing or carrying on the commercial activity, in respect of which such assistance is or was received. 2 Sub-paragraph (1) shall apply only in respect of payments which are paid to that person from the special account as defined for the purposes of Chapter IVA of Part VIII of the Jobseeker’s Allowance Regulations 1996. . 6 The respective paragraph numbers and Schedules for the purposes of paragraph (5) of this regulation are— a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b paragraph 59 of Schedule 3 to the Disability Working Allowance Regulations; c paragraph 61 of Schedule 2 to the Family Credit Regulations; d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 At the end of each of the numbered paragraphs of the Schedules specified in paragraph (8) (which relate to sums to be disregarded in the calculation of capital), there shall be added the following sub-paragraphs— 3 In the case of a person who is receiving assistance under an employment programme specified in regulation 75(1)(a)(ii)(aa)(ii) of the Jobseeker’s Allowance Regulations 1996 (self-employment route of the Employment Option of the New Deal), the assets acquired by that person for the purpose of establishing or carrying on the commercial activity in respect of which such assistance is being received. 4 In the case of a person who has ceased carrying on the commercial activity in respect of which assistance was received as specified in sub-paragraph (3), the assets relating to that activity for such period as may be reasonable in the circumstances to allow for disposal of any such asset. . 8 The respective paragraph numbers and Schedules for the purposes of paragraph (7) of this regulation are— a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b paragraph 6 of Schedule 4 to the Disability Working Allowance Regulations; c paragraph 6 of Schedule 3 to the Family Credit Regulations ; d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . e paragraph 6 of Schedule 10 to the Income Support Regulations . 9 For the numbered paragraph of each of the Schedules specified in paragraph (10) of this regulation (which relate to sums to be disregarded in the calculation of capital), there shall be substituted the following paragraph— Any mandatory top-up payment made to a person pursuant to section 2 of the Employment and Training Act 1973 in respect of that person’s participation in an employment programme specified in— a regulation 75(1)(a)(ii)(aa)(ii) of the Jobseeker’s Allowance Regulations 1996 (self-employment route of the Employment Option of the New Deal); b regulation 75(1)(a)(ii)(bb) of those Regulations (Voluntary Sector Option of the New Deal); or c regulation 75(1)(a)(ii)(cc) of those Regulations (Environment Task Force Option of the New Deal), but only for a period of 52 weeks from the date of receipt of the payment. . 10 The respective paragraph numbers and Schedules for the purposes of paragraph (9) of this regulation are— a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b paragraph 51 of Schedule 4 to the Disability Working Allowance Regulations; c paragraph 52 of Schedule 3 to the Family Credit Regulations; d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . e paragraph 50 of Schedule 10 to the Income Support Regulations. 11 At the end of each of the Schedules specified in paragraph (12) of this regulation (which relate to sums to be disregarded in the calculation of capital) there shall be added the following paragraph bearing the specified respective paragraph number— In the case of a person who is receiving, or who has received, assistance under an employment programme specified in regulation 75(1)(a)(ii)(aa)(ii) of the Jobseeker’s Allowance Regulations 1996 (self-employment route of the Employment Option of the New Deal), any sum of capital which is acquired by that person for the purpose of establishing or carrying on the commercial activity in respect of which such assistance is or was received but only for a period of 52 weeks from the date on which that sum was acquired. . 12 The respective paragraph numbers and Schedules for the purposes of paragraph (11) of this regulation are— a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b paragraph 53 of Schedule 4 to the Disability Working Allowance Regulations; c paragraph 54 of Schedule 3 to the Family Credit Regulations; d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . e paragraph 52 of Schedule 10 to the Income Support Regulations. Consequential amendments 8 1 Regulation 18 of the Social Security Amendment (New Deal) Regulations 1997 (consequential amendments) shall be revoked. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 In the Social Security (Claims and Payments) Regulations 1987 — a in paragraph (7) of regulation 26A (effect of changes of circumstances in jobseeker’s allowance cases), after the words “regulation 96" there shall be inserted the words “ or 102C(3) ” ; b in sub-paragraph (4) of paragraph 7 of Schedule 7 (effect of changes of circumstances in income support cases), after the words “or (2)" there shall be inserted the words “ or 39C(3) ” . Signed by authority of the Secretary of State for Education and Employment. Alan Howarth Parliamentary Under-Secretary of State, Department for Education and Employment Signed by authority of the Secretary of State for Social Security. Frank Field Minister of State, Department of Social Security