Part 10Social security income

C1Chapter 4Taxable UK social security benefits: exemptions

Annotations:
Modifications etc. (not altering text)
C1

Pt. 10 Chs. 4, 5: power to amend conferred (22.7.2020) by Finance Act 2020 (c. 14), s. 13(1)(2)

Incapacity benefit

663Long-term incapacity benefit: previous entitlement to invalidity benefit

1

No liability to income tax arises on long-term incapacity benefit if—

a

a person is entitled to the benefit for a day of incapacity for work which falls in a period of incapacity for work which is treated for the purposes of that benefit as having begun before 13th April 1995, and

b

the part of that period which is treated as having fallen before that date includes a day for which that person was entitled to invalidity benefit.

2

In this section—

  • “invalidity benefit” means invalidity benefit under—

    1. a

      Part 2 of SSCBA 1992, or

    2. b

      Part 2 of SSCB(NI)A 1992;

  • “long-term incapacity benefit” means incapacity benefit payable under—

    1. a

      section 30A(5), 40 or 41 of SSCBA 1992, or

    2. b

      section 30A(5), 40 or 41 of SSCB(NI)A 1992.

664Short-term incapacity benefit not payable at the higher rate

1

No liability to income tax arises on short-term incapacity benefit unless it is payable at the higher rate.

2

In this section—

a

“short-term incapacity benefit” means incapacity benefit payable under—

i

section 30A(1) of SSCBA 1992, or

ii

section 30A(1) of SSCB(NI)A 1992;

b

the reference to short-term incapacity benefit payable at the higher rate is to be construed in accordance with—

i

section 30B of SSCBA 1992, or

ii

section 30B of SSCB(NI)A 1992.

Income support F6and relevant welfare supplementary payments

Annotations:
Amendments (Textual)
F6

Words in s. 665 cross-heading inserted (with effect in accordance with reg. 2 of the amending S.I.) by The Taxation of Northern Ireland Welfare Supplementary Payments Regulations 2017 (S.I. 2017/338), regs. 1, 7

665F11Exempt unless payable to a person involved in a trade dispute

1

No liability to income tax arises on income support unless—

a

the income support is payable to one member of a F13... couple (“the claimant”), and

b

section 126 of SSCBA 1992 or section 125 of SSCB(NI)A 1992 (trade disputes) applies to the claimant but not to the other member of the couple.

2

In this section F22“couple” has the same meaning as in section 137(1) of SSCBA 1992 or section 133(1) of SSCB(NI)A 1992.

F23

No liability to income tax arises on a relevant welfare supplementary payment unless the whole or part of the payment relates to a period in which the claimant was prevented from being entitled to jobseeker’s allowance by–

a

section 14 of the Jobseekers Act 1995 (trade disputes), or

b

Article 16 of the Jobseekers (Northern Ireland) Order 1995 (trade disputes)

or would have been so prevented if otherwise entitled to that benefit.

4

Where part of a relevant welfare supplementary payment relates to such a period no liability to income tax arises on the part that does not relate to such a period.

666Child maintenance bonus

No liability to income tax arises on a part of income support which is attributable to a child maintenance bonus (within the meaning of section 10 of CSA 1995 or Article 4 of CS(NI)O 1995).

667Amounts in excess of taxable maximum

1

If the amount of income support F5and relevant welfare supplementary payments paid to a person (“the claimant”) for a week or a part of a week exceeds the claimant’s taxable maximum for that period, no liability to income tax arises on the excess.

F72

The claimant’s taxable maximum for a period is determined–

a

under section 668(1), (2) and (3) where the claimant is a member of a couple, and

b

under section 668(2A) and (3) where the claimant is not a member of a couple.

668Taxable maximum

1

A claimant’s taxable maximum for a week is determined under this subsection if the applicable amount for the purpose of calculating the income support consists only of an amount in respect of the relevant couple.

The taxable maximum is equal to one half of the applicable amount.

2

A claimant’s taxable maximum for a week is determined under this subsection if the applicable amount includes amounts that are not in respect of the relevant couple.

The taxable maximum is equal to one half of the amount which is included in the applicable amount in respect of the relevant couple.

F32A

A claimant’s taxable maximum for a week is determined under this subsection if the claimant is not a member of a couple.

The taxable maximum is equal to the applicable amount.

3

A claimant’s taxable maximum for a part of a week is determined as follows—

Step 1

Assume that the income support is paid to the claimant for the whole of, rather than part of, the week.

Step 2

Determine under subsection (1) or (2) what the claimant’s taxable maximum for that week would be on that assumption.

Step 3

Determine the claimant’s taxable maximum for the part of the week using this formula—

N7×TMWmath

where—

N is the number of days in the part of the week for which the claimant is actually paid the income support, and

TMW is the taxable maximum for the whole week determined under step 2.

669Interpretation

F24A1

In sections 665 and 667 “relevant welfare supplementary payment” means a payment to which a person is entitled under–

a

regulation 8 (when the recipient is entitled to the payment by meeting the condition in regulation 8(2)(c)) or regulation 12 of WSP(LCP)R(NI) 2016, or

b

regulation 4 , 5 or 6 of WSP(LDRP)R(NI) 2016.

1

In section 668, except in relation to Northern Ireland—

  • “applicable amount” means the amount prescribed in relation to income support in regulations made under section 135 of SSCBA 1992;

  • F9“couple” has the same meaning as in section 137(1) of SSCBA 1992

2

In section 668, in relation to Northern Ireland—

  • “applicable amount” means the amount prescribed in relation to income support in regulations made under section 131 of SSCB(NI)A 1992;

  • F21“couple” has the same meaning as in section 133(1) of SSCB(NI)A 1992

3

In section 668 “relevant couple”, in relation to a claimant, means the F16... couple of which the claimant is a member.

Jobseeker’s allowance F14and relevant welfare supplementary payments

Annotations:
Amendments (Textual)
F14

Words in s. 670 cross-heading inserted (with effect in accordance with reg. 2 of the amending S.I.) by The Taxation of Northern Ireland Welfare Supplementary Payments Regulations 2017 (S.I. 2017/338), regs. 1, 12

670Child maintenance bonus

No liability to income tax arises on a part of a jobseeker’s allowance which is attributable to a child maintenance bonus (within the meaning of section 10 of CSA 1995 or Article 4 of CS(NI)O 1995).

671Amounts in excess of taxable maximum

1

If the amount of jobseeker’s allowance F17and relevant welfare supplementary payments paid to a person (“the claimant”) for a week or a part of a week exceeds the claimant’s taxable maximum for that period, no liability to income tax arises on the excess.

2

The claimant’s taxable maximum for a period is determined under sections 672 to 674.

672Taxable maximum: general

1

A claimant’s taxable maximum for a week is determined—

a

under section 673, if the claimant is paid an income-based jobseeker’s allowance for that week, or

b

under section 674, if the claimant is paid a contribution-based jobseeker’s allowance for that week.

2

A claimant’s taxable maximum for a part of a week is determined as follows—

Step 1

Assume that the jobseeker’s allowance is paid to the claimant for the whole of, rather than part of, the week.

Step 2

Determine under section 673 or 674 what the claimant’s taxable maximum for that week would be on that assumption.

Step 3

Determine the claimant’s taxable maximum for the part of the week using this formula—

M7×TMWmath

where—

N is the number of days in the part of the week for which the claimant is actually paid the jobseeker’s allowance, and

TMW is the taxable maximum for the whole week determined under step 2.

673Taxable maximum: income-based jobseeker’s allowance

1

A claimant’s taxable maximum for a week is determined under this section if—

a

the claimant is paid an income-based jobseeker’s allowance for that week, or

b

the claimant is assumed under section 672(2) to be paid an income-based jobseeker’s allowance for that week.

2

If the claimant is not a member of a F12... couple, the claimant’s taxable maximum for the week is equal to the age-related amount which would be applicable to the claimant if a contribution-based jobseeker’s allowance were payable to the claimant for that week.

3

If the claimant is a member of a F1... couple, the claimant’s taxable maximum for the week is equal to the portion of the applicable amount which is included in the jobseeker’s allowance in respect of the couple for that week.

4

But if—

a

the claimant is a member of a F19... couple, and

b

the other member of that couple is prevented by section 14 of JSA 1995 or Article 16 of JS(NI)O 1995 (trade disputes) from being entitled to a jobseeker’s allowance,

the claimant’s taxable maximum for that week is equal to half the portion of the applicable amount which is included in the jobseeker’s allowance in respect of the couple for that week.

674Taxable maximum: contribution-based jobseeker’s allowance

1

A claimant’s taxable maximum for a week is determined under this section if—

a

the claimant is paid a contribution-based jobseeker’s allowance for that week, or

b

the claimant is assumed under section 672(2) to be paid a contribution-based jobseeker’s allowance for that week.

2

If the claimant is not a member of a F23... couple, the claimant’s taxable maximum for the week is equal to the age-related amount which is applicable to the claimant for that week.

3

If the claimant is a member of a F18... couple, the claimant’s taxable maximum for the week is equal to the portion of the applicable amount which would be included in the jobseeker’s allowance in respect of the couple if an income-based jobseeker’s allowance were payable to the claimant for that week.

675Interpretation

F10A1

In section 671 “relevant welfare supplementary payments” means payments to which a person is entitled under–

a

regulation 8 (when the recipient is entitled to the payment by meeting the condition in regulation 8(2)(a)) of WSP(LCP)R(NI) 2016, or

b

regulation 11, 12, 13, 14 or 15 of WSP(LDRP)R(NI) 2016.

1

In sections 671 to 674, except in relation to Northern Ireland—

  • “age-related amount” and “applicable amount” mean the amounts determined as such in accordance with regulations made under section 4 of JSA 1995;

  • F15...

  • F20“contribution-based jobseeker’s allowance” means a jobseeker’s allowance entitlement to which is based on the claimant satisfying conditions which include those set out in Article 4 of the JS(NI)O 1995;

  • F15...

  • F20“income-based jobseeker’s allowance” means a jobseeker’s allowance entitlement to which is based on the claimant satisfying conditions which include those set out in Article 5 of the JS(NI)O 1995 or a joint-claim jobseeker’s allowance (which means a jobseeker’s allowance entitlement to which arises by virtue of Article 3(2B) of the JS(NI)O 1995);

  • F8“couple” has the same meaning as in section 35(1) of JSA 1995

2

In sections 671 to 674, in relation to Northern Ireland—

  • “age-related amount” and “applicable amount” mean the amounts determined as such in accordance with regulations made under Article 6 of JS(NI)O 1995;

  • “contribution-based jobseeker’s allowance” and “income-based jobseeker’s allowance” have the same meaning as in Article 3(4) of JS(NI)O 1995;

  • F4“couple” has the same meaning as in Article 2(2) of JS(NI)O 1995

Increases in respect of children

676Increases in respect of children

No liability to income tax arises on a part of a taxable benefit listed in Table A which is attributable to an increase in respect of a child.