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Chapter 83

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									                         Decision Makers Guide

                                       Volume 14
                            Amendment 22 September 2010



1.   Amendments to the Decision Makers Guide are issued at regular intervals, all
     amendments have already been incorporated in to the intranet version of the DMG.
     PDF amendment packages are available with the amended pages being reproduced
     in full.

2.   On printing the PDF amendment package the amendment number is displayed at
     the bottom of each replacement page. Significant changes are sidelined for ease of
     identification.

     Note : When printing PDF packages set the print properties to double-sided.

3.   Amendment 22 affects Chapters 83, 84, 85 and 86. The changes

          incorporate DMG Memo Vol 14/44 to Chapter 83

          incorporate DMG Memo Vol 14/41 and 14/44 and other minor amendments to
           Chapter 84

          incorporate DMG Memo Vol 14/40 and 14/42. There are also some minor
           changes to the text to clarify guidance in Chapter 85

          expands guidance to take account of recent legal advice and some minor
           amendments in Chapter 86

4.   The last two amendment packages amending Volume 14 were:

          Amendment 21 [June 2010]

          Amendment 20 [January 2010]

5.   Please note that Decision Making Services no longer arrange for hard copies of
     DMG amendment packages to be distributed to Department for Social Development
     customers (see SAO letter 18/06). If using a PDF amendment package remove the
     sheets in the left hand column and insert new sheets in the right hand column.
     When revised sheets have been inserted, note the record of amendments at the
     back of the Volume.
6.   The DMG can be accessed on the DSD Intranet. Click on the link below to access
     the index page for the amendment packages or Decision Makers Guide (DMG)
     http://dsdintranet/index/guidance/decision_making-pg/dms_decision_making-pg.htm

     Remove                                      Insert


     Chapter 83

     Contents (1 page)                           Contents (1 page)

     83000 - 83004 (1 page)                      83000 - 83004 (1 page)

     83060 - 83149 (5 pages)                     83060 - 83149 (4 pages)

                                                 Appendix 1 (1 page)

     Chapter 84

     Contents                                    Contents
     84444 - Appendix 1 (4 pages)                84444 - Appendix 1 (4 pages)

     84438 - 84531 (6 pages)                     84438 - 84531 (6 pages)

     84541 - 84560 (1 page)                      84541 - 84560 (1 page)

     Chapter 85

     Contents (4 pages)                          Contents (4 pages)

     85003 - 85051 (7 pages)                     85003 - 85051 (7 pages)

     85091 - 85099 (1 page)                      85091 - 85099 (2 pages)

     85109 - 85129 (2 pages)                     85109 - 85129 (2 pages)

     85335 - 85399 (2 pages)                     85335 - 85399 (2 pages)

     85427 - 85439 (1 page)                      85427 - 85439 (1 page)

     85445 - 85499 (3 page)                      85445 - 85499 (3 pages)

     Chapter 86

     86023 - 86026 (1 page)                      86023 - 86026 (1 page)

     86030 - 86036 (2 pages)                     86030 - 86036 (2 pages)
Decision Makers Guide                                                                                                     Contents




         Chapter 83 - Assessed income
         periods

         Contents
         Introduction ................................................................................................... 83000

         Duty to specify an assessed income period............................................... 83005

         Meaning of relevant decision ........................................................................... 83010

         When is a decision-maker prevented from
         setting an assessed income period ................................................................. 83020

         Revision ........................................................................................................... 83025

         Supersession .................................................................................................. 83030

         How long does an assessed income period last ...................................... 83032

         Assessed income periods of five years ........................................................... 83034

         Assessed income periods of an indefinite period ............................................ 83036

         Claimants aged 80 or over with an existing
         award of State Pension Credit ......................................................................... 83038

         Retirement provision is likely to change within twelve months ........................ 83041

         Backdating ..................................................................................................... 83043

         Backdating - when does an assessed income period start ............................. 83047

         When will an assessed income period end ................................................ 83050

         Effect of the assessed income period ......................................................... 83060

         Meaning of retirement provision ...................................................................... 83065

         Meaning of overseas arrangement.................................................................. 83066

         Meaning of occupational pension scheme ...................................................... 83072

         Meaning of personal pension scheme............................................................. 83073

         Meaning of retirement annuity contract ........................................................... 83074

         Meaning of equity release scheme .................................................................. 83075

         Financial Assistance Scheme ......................................................................... 83076

         Pension Protection Fund ................................................................................. 83079



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         Deemed variations .......................................................................................... 83100

         Circumstances in which retirement provision is deemed not to
         change ............................................................................................................. 83110

         Dates and amounts of deemed increases

             Deeming based on actual increase ............................................................ 83120

             Deeming based on standard increase ....................................................... 83123

         Income from capital ......................................................................................... 83130

         Retirement provision in assessed income period ............................................ 83140

         Changes in retirement provision during
         an assessed income period

         Reductions in retirement provision during an
         assessed income period.................................................................................. 83150

         Increases in retirement provision during an
         assessed income period.................................................................................. 83160

         Treatment of foreign state retirement pensions
         for the period 20.3.09 - 12.4.10 ............................................................Appendix 1




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Decision Makers Guide                                                               Introduction




         Chapter 83 - Assessed income
         periods

         Introduction
83000    An assessed income period is a period specified by a decision-maker during which
         the amount of a claimant’s retirement provision is fixed subject to deemed increases
                                                         1
         made in accordance with the relevant legislation .
                                                                        1 SPC Act (NI) 02, sec 7(4)

         83001 - 83004




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Decision Makers Guide                                                Effect of the assessed income period




         Effect of the assessed income period
83060    Where an assessed income period has been set, the amount of a claimant's
         retirement provision is fixed subject only to deemed variations.

83061    Where the claimant's income, as determined for the purposes of the relevant
         decision, includes an element of the retirement provision (called the “assessed
         amount”) then, throughout the assessed income period, the amount of that element
                 1
         shall be the amount originally assessed or as varied in accordance with DMG 83100
         - 83102.
                                                                                   1 SPC Act (NI) 02, sec 7(3)


83062    Where, on making the relevant decision, the decision-maker decides that the
         claimant's income does not include any, or any further, elements of retirement
         provision, then, during the currency of the assessed income period, the claimant's
                                                                      1
         income shall be taken not to include those elements .
                                                                                   1 SPC Act (NI) 02, sec 7(5)


         83063 - 83064


         Meaning of retirement provision
83065    Retirement provision means1 any of the following
                                                                      2
         1.    income from an occupational pension scheme
                                                             2
         2.    income from a personal pension scheme
                                                         3
         3.    income from an overseas arrangement
                                                                 4
         4.    income from a retirement annuity contract

         5.    income from annuities or insurance policies purchased or transferred for the
               purpose of giving effect to rights under a personal pension scheme or an
                                          5
               overseas arrangement
                         6
         6.    income from an annuity purchased or entered into for the purpose of crediting
                                                                                  7
               a former partner with a share of pension rights on divorce
                                                                                                8
         7.    any pension payable out of money provided under the Civil List Acts

         8.    payments made to a person by or on behalf of a former employer on account
                                                                              9
               of early retirement on grounds of ill-health or disability

         9.    income from annuity contracts other than those mentioned in DMG 83065 4.-
                    10
               6.
                                     11
         10.   income from capital


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                                                                                                             12
         11.      any payment made at regular intervals under an equity release scheme
                                                                                                13
         12.      any payment made under the Financial Assistance Scheme
                                                                                     14
         13.      periodic payments from the Pension Protection Fund .

         Note : Retirement provision does not include15 state retirement benefits paid in
                                        16
         accordance with the Act .
                            1 SPC Act (NI) 02 sec 7(6); 2 sec 16(1)(f); 3 sec 16(1)(g); 4 sec 16(1)(h); 5 sec16(1)(i);
                                         6 sec 16(1)(j); 7 WRP Act 99, sec 29(1)(b); 8 SPC Regs (NI) 02, reg 16(1)(k)
                    9 reg 16(1)(l); 10 SPC Act (NI) 02, sec 7(6)(b); 11 sec 7(6)(c); 12 SPC Regs (NI) 02, reg 16(1)(m);
                           13 reg 16(1)(n); 14 SPC Act (NI) 02, sec 7(6)(c); 15 sec 7(6)(a); 16 SS C&B (NI) Act 1992



         Meaning of overseas arrangement
                                             1
83066    An overseas arrangement is a scheme or arrangement which

         1.       has the effect (or is capable of having the effect) of providing benefits to or in
                  respect of employed earners

                  1.1    on the termination of employment or

                  1.2    on death or

                  1.3    on retirement and

         2.       is administered wholly or primarily outside Northern Ireland and
                                                                                                 2
         3.       is not an “appropriate scheme” as described in the legislation and

         4.       is not an occupational pension scheme.
                                                 1 SPC Act (NI) 02, sec 16(3); Pensions Schemes (NI) Act 93, sec 176(1)
                                                                               2 Pensions Schemes (NI) Act 1993, sec 3


83067    Where the claimant is in receipt of a foreign state retirement pension (see DMG
         85094) then that income is to be treated in the same way as a domestic retirement
         pension and therefore cannot form part of the claimant’s retirement provision. The
                                                                                            1
         treatment of it is unaffected by any assessed income period which might be in
         place.
                                                                                            1 SPC Regs (NI), reg 11(2)


83068    For the period 20.3.09 - 12.4.10 it was possible that a foreign state retirement
         pension could form part of a claimant’s retirement provision. Appendix 1 provides
         guidance on those types of cases.

         83069 - 83071




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         Meaning of occupational pension scheme
83072    An occupational pension scheme is a pension scheme defined under specific
                    1
         legislation that provides benefits to, or in respect of, people with services in a
         particular employment or may provide benefits to, or in respect of, other people.
                                                   1 SPC Act (NI) 02, sec 17; Pensions Schemes (NI) Act 1993, sec 1



         Meaning of personal pension scheme
                                                               1
83073    A personal pension is a pension scheme that

         1.     is not an occupational pension scheme and

                                                                                            2
         2.     is established by a person within specified finance legislation .
                                                   1 SPC Act (NI) 02, sec 17; Pensions Schemes (NI) Act 1993, sec 1
                                                                                    2 Finance Act 2004, sec 154(1)



         Meaning of retirement annuity contract
                                               1
83074    A retirement annuity contract is a contract or scheme approved under specified
                    2
         legislation .
                          1 SPC Act (NI) 02, sec 16(3); 2 Income and Corporation Taxes Act 1988, Ch III, Part XIV



         Meaning of equity release scheme
                                           1
83075    Equity release scheme means a loan made between a person “the lender” and the
         claimant

         1.     by means of which a sum of money is advanced by the lender to the claimant
                by way of payments at regular intervals and

         2.     which is secured on a dwelling in which the claimant owns an estate or
                interest and which he occupies as his home.
                                                                                         1 SPC Regs (NI), reg 1(2)



         Financial Assistance Scheme
83076    Financial Assistance Scheme provides financial help to some people who have lost
         out on their non-state pension because

         1.     the scheme they were a member of was under-funded when it started to wind-
                up and




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Decision Makers Guide                                           Effect of the assessed income period



         2.    the employer is insolvent or no longer exists.

83077    Persons will be eligible to be considered for a Financial Assistance Scheme award if
         they satisfy both of the following conditions

         1.    they belong (or have belonged) to a qualifying pension scheme and

         2.    they are within three years of their normal retirement age (as laid down in their
               pension scheme rules) or older on 14.5.04.

83078    Subject to a maximum of £12,000 a year, awards will top up the amount payable
         under the qualifying pension scheme to a level broadly equal to 80% of the amount
         that would have been received had the pension scheme not started to wind-up.
         Financial Assistance Scheme payments will be paid at a fixed rate for life. There will
         be no annual increases. Tax will be deducted at source. In most cases, Financial
         Assistance Scheme payments for individuals will commence at age 65.                   The
         terminally ill and survivors may qualify for payments earlier.

         Note :     As the Financial Assistance Scheme has no provisions for periodic
         increases, payments under it are deemed not to change.


         Pension Protection Fund
83079    The Pension Protection Fund compensates members of defined benefit (final salary)
         occupational pension schemes where the employer goes out of business and the
         scheme is left with insufficient funds. The Pension Protection Fund board decides
         whether to take over the pension scheme’s liabilities and pay compensation to
         members.

83080    Compensation may be made as regular payments of income and lump sums (just as
         the former pension scheme would have paid). Members cannot gain financially
         under the Pension Protection Fund. In some cases members will see no change in
         the amount of income they receive. However in some cases members may receive
         a lower level of income than their pension would have provided.

         83081 - 83099


         Deemed variations
83100    Where an assessed income period is in force, elements of the claimant's retirement
                                1
         provision are deemed

         1.    to increase or

         2.    in the case of income from capital, to increase or decrease


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Decision Makers Guide                                        Effect of the assessed income period



         on such dates and by such amounts as are prescribed in the relevant legislation -
         see DMG 83120 et seq.
                                                                           1 SPC Act (NI) 02, sec 7(4)


83101    Where the result of a deemed variation is that the amount of State Pension Credit to
         which the claimant is entitled increases or decreases then that increase or reduction
                                                                                            1
         takes place without the need for any further decision by the decision-maker . This
         means that there is no decision superseding the award of State Pension Credit.
                                                                          1 SPC Act (NI) 02, sec 10(2)


83102    Where, even though there has been a deemed variation in an element of retirement
         provision, there is no change in the amount of State Pension Credit to which the
         claimant is entitled then the award continues in force at the same rate1 without the
         need for any further decision. This means that there is no decision superseding the
         award of State Pension Credit.
                                                                           1 SPC Act (NI) 02, sec10(3)


         83103 - 83109


         Circumstances in which retirement provision is
         deemed not to change
83110    Where an assessed income period is in force, then in certain circumstances
         elements of the claimant's retirement provision are deemed not to change. The
                                       1
         prescribed circumstances are that

         1.    the arrangements under which the assessed amount is paid contain no
               provision for periodic increases in the amount payable or

         2.    the assessed income comprises income from capital (except where DMG
               83130 applies).
                                                                      1 SPC Regs (NI) 2003, reg 10(2)

         83111 - 83119


         Dates and amounts of deemed increases

         Deeming based on actual increase

83120    Where the decision maker is informed that the arrangements under which an
         element of retirement provision is paid contain provisions for

         1.    the payment to be increased periodically and

         2.    the date on which the increase is to be paid and


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Decision Makers Guide                                          Effect of the assessed income period



         3.    determining the amount of the increase

         then the amount is deemed to increase by the amount provided for in the
                        1
         arrangements .
                                                                                1 SPC Regs (NI), reg 10(4)


83121    Where the period for which the increase in the assessed amount is first paid is the
                                                                                       1
         same as the period for which the last regular payment was made , the deemed
                                      2
         increase takes effect from

         1.    the date the first increased payment is actually paid if that is the first day of the
               claimant’s benefit week or

         2.    the first day of the benefit week that immediately follows the benefit week in
               which the first increased payment is actually paid.
                                                               1 SPC Regs (NI), reg 10(5A); 2 reg 10(5)(a)


         Example

         State Pension Credit has been in payment to Frances since 6.10.03. The first day of
         her benefit week is a Monday. The Department has been given full details of the
         arrangements under which periodical increases of Frances’ occupational pension
         are calculated and paid: regular payments of occupational pension are made on the
         last day of each calendar month. The last regular payment before the increase was
         made on 30.6.04. Annual increases of 2% take effect from the first day in July but
         are not paid until 31 July. The decision maker decided that the period between
         1.7.04 and 31.7.04 was the same as the last regular payment period (that is, a
         calendar month). He therefore applied the deemed increase from 2.8.04 (the first
         day of the benefit week immediately following 31.7.04).

83122    Where the period for which the increase in the assessed amount is first paid is not
         the same as the period for which the last regular payment was made, the deemed
                                      1
         increase takes effect from

         1.    the date the second payment of the increased amount is actually paid, if that
               is the first day of the claimant’s benefit week or

         2.    the first day of the claimant’s benefit week immediately following the date the
               second payment of the increased amount is actually paid.
                                                                             1 SPC Regs (NI), reg 10(5)(b)


         Example

         State Pension Credit has been in payment to Clare since 1.11.03. The first day of
         the benefit week is Monday. The Department has full details of the way in which



Volume 14 Amendment 22                                                               September 2010
Decision Makers Guide                                         Effect of the assessed income period



         Clare’s occupational pension increases each year.           Regular payments of the
         occupational pension are made on the last day of each calendar month. An annual
         increase of 2.6% takes effect from 15.9.04 and that increase is first paid with the
         regular payment on 30.9.04. The decision maker decided that the period between
         15.9.04 to 30.9.04 (16 days) was not the same as the period covered by the last
         regular payment made on 31.8.04 (a calendar month). The decision maker decided
         that the second payment of the increased amount was to be paid on 31.10.04. He
         therefore applied the deemed increase from 1.11.04 (the first day of the benefit
         week immediately following 31.10.04).


         Deeming based on standard increase

83123    Where the Department has not been provided with all of the information set out in
                                                                                                    1
         DMG 83120 the relevant element of retirement provision is deemed to increase on

         1.    the day in April each year when the annual uprating of additional pensions
               comes into force if that is the first day of the benefit week or

         2.    the first day of the next following benefit week

         by an amount produced by applying to the relevant element of retirement provision
         the same percentage increase as the Department directs shall be made to additional
         pensions on uprating.
                                                                          1 SPC Regs (NI), reg 10(6)(a)


         Example

         Jessica has been receiving State Pension Credit since January 2004. On her State
         Pension Credit claim form Jessica set out the current amount of her occupational
         pension but was unable to provide answers about possible future increases.
         Jessica’s benefit week starts an a Tuesday. The decision maker decided to apply
         an increase of 2.8% with effect from 13.4.04, as that was the first day of the benefit
         week starting immediately after 12.4.04 (the day in April 2004 when the annual
         uprating of additional pensions comes into force).

         83124 - 83129


         Income from capital
83130    Where the assessed amount comprises income from capital and the claimant’s
         income from that capital

         1.    increases or




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Decision Makers Guide                                      Effect of the assessed income period



         2.    decreases

         then the assessed amount is treated as changing on the first day of the next benefit
                                                                                          1
         week to begin on or after the day on which the income increases or decreases .
                                                                      1 SPC Regs (NI), reg 10(7)(a)


83131    The amount of the increase or decrease is equal to the change in the claimant’s
         income as determined by

         1.    changes made to the deemed weekly income from capital (see DMG Chapter
               84) or

         2.    changes made to the capital limits above which income is deemed from
               capital or

                             1
         3.    both 1. and 2. .
                                                                      1 SPC Regs (NI), reg 10(7)(b)


         83132 - 83139


         Retirement provision in assessed income period
83140    Where an element of a person's retirement provision ceases to be payable from one
         source but

         1.    responsibility for that element is assumed by another source, income from
               both those sources shall be treated as income from the same source

         2.    in consequence of that element ceasing, income of a different description
               becomes payable from a different source, that income shall be treated as
               income of the same description from the same source as the element which
                                    1
               ceased to be payable .
                                                                           1 SPC Regs (NI), reg 11

        83141 - 83149




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Decision Makers Guide                                                                       Appendix 1




                                                                                 Appendix 1

         Treatment of foreign state retirement
         pensions for the period 20.3.09 - 12.4.10
1        On 20.3.09 a Judge of the Upper Tribunal decided an appeal which affected how
         foreign state pensions were to be treated when considering entitlement to State
                         1
         Pension Credit . Prior to the date of that decision, decision makers should have
         treated a foreign state pension as not being part of a claimant’s retirement provision.
         The Judge decided that a foreign state pension may fall within the meaning of
         income from an overseas arrangement and therefore be part of the claimant’s
         retirement provision (see DMG 83066). DMG Memo Vol 1/73 & 14/39 was issued in
         September 2009 to provide guidance on this to decision makers.
                                                               1 SSWP v JK (PC) [2009] UKUT 55 (AAC)


2        From 13.4.10 State Pension Credit legislation was amended so that a foreign state
         retirement pension cannot be part of the claimant’s retirement provision and should
                                                                            1
         be treated in the same way as a foreign social security benefit .
                                                                                1 SPC Regs (NI), reg 15(2)



         Meaning of foreign state retirement pension
                                                 1
3        A foreign state retirement pension is

         1.    any pension paid under the law of a country outside the UK and

         2.    in the nature of social security (similar to a Retirement Pension paid under UK
               law).
                                                                                 1 SPC Regs (NI), reg 1(2)


4        From 13.4.10 where the claimant is in receipt of a foreign state retirement pension
         then that income should be taken into account in the same way as any other income
         which is not part of the claimant’s retirement provision. It does not form part of the
         claimant’s retirement provision and so the treatment of it is unaffected by any
                                  1
         assessed income period .
                                                        1 SPC Act (NI), sec 7(6); SPC Regs (NI), reg 11(2)


         Example

         Juan is in receipt of State Pension Credit and the decision maker has set an
         assessed income period. On 30.4.10 Juan receives the first payment of a state
         retirement pension paid by the Spanish government. The decision maker decides


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Decision Makers Guide                                                                        Appendix 1



         that the income does not form part of Juan’s retirement provision because it is
         income from a foreign state retirement pension. This means that the rules whereby
         a claimant’s retirement provision is fixed for the duration of the assessed income
         period do not apply to this income.      The decision maker takes the income into
         account when it is paid because it is not part of the claimant’s retirement provision.


         Supersession
                                                                                               1
5        A change in the law is a relevant change of circumstances (see DMG 4109) . From
         13.4.10 decision makers should be considering superseding awards of State
         Pension Credit where the claimant is in receipt of a foreign state retirement pension.
         The decision maker should supersede the award of State Pension Credit where the
         foreign state retirement pension has been treated as part of the claimant’s
         retirement provision and that supersession results in a change in the amount of
         State Pension Credit which the claimant is entitled to. The date of change for the
                                                       2
         purposes of the supersession will be 13.4.10 .
                                                      1 SS & CS (D&A) Regs (NI), reg 6(2)(a); 2 reg 7(30A)


         Example

         Camilla is in receipt of State Pension Credit. The decision maker set an assessed
         income period on 6.5.08 for a period of five years. On 1.5.09 Camilla began to
         receive a state retirement pension from the Italian government. The decision maker
         determined that the pension formed part of Camilla’s retirement provision on the
         grounds that it was an income from an overseas arrangement. Since there was an
         assessed income period already in place on 1.5.09 the foreign state retirement
         pension could have no affect on the amount of State Pension Credit that Camilla
         was entitled to.

         From 13.4.10 the decision maker determines that due to a change in the law,
         Camilla’s Italian pension no longer falls to be treated as part of her retirement
         provision. The decision maker takes the payment of that foreign state retirement
         pension into account as income. The assessed income period which was set for a
         period of five years remains in place because none of the circumstances which may
         bring it to an end have occurred (see DMG 83030 and 83050).




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             Is the person incapacitated ..................................................................... 84444

             What the decision maker decides if only part of
             the premises are occupied as the home ................................................. 84445

         Rent .............................................................................................................. 84456

         Second World War compensation payments ............................................... 84461

         The Independent Living Fund (2006)

             The law .................................................................................................... 84462

             Meaning of the Independent Living Fund (2006)..................................... 84463

             Payment included with other capital ........................................................ 84467

         The Macfarlane Trusts, the Fund, Eileen Trust, MFET Limited, Skipton Fund or the
         London Bombings Relief Charitable Fund

             The law .................................................................................................... 84475

             The Trusts ............................................................................................... 84479

             The Macfarlane Trusts ............................................................................ 84480

             The Macfarlane (Special Payments) Trust .............................................. 84481

             The Macfarlane (Special Payments) (No. 2) Trust .................................. 84482

             The Fund ................................................................................................. 84483

             Eileen Trust ............................................................................................. 84484

             MFET Limited .......................................................................................... 84485

             The Skipton Fund .................................................................................... 84486

             The London Bombings Relief Charitable Fund ....................................... 84487

             Qualifying person .................................................................................... 84488

             Evidence.................................................................................................. 84489

             Payment included with other capital ........................................................ 84491

             Other payments which are disregarded .................................................. 84493

         Trusts ........................................................................................................... 84494

         Capital disregarded for up to two years

         Payment to sufferers of variant Creutzfeldt-Jakob disease and their partners

             The law .................................................................................................... 84521

             Meanings ................................................................................................. 84525



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         The Macfarlane Trusts, the Fund, Eileen Trust, MFET Limited, Skipton Fund or the
         London Bombings Relief Charitable Fund

             The law .................................................................................................... 84531

             Meaning of child ...................................................................................... 84534

             Meaning of qualifying young person ........................................................ 84535

             Meaning of student .................................................................................. 84539

             Other meanings ....................................................................................... 84544

             Payment included with other capital ........................................................ 84545

         Capital disregarded for a year or longer

         Period of disregard ....................................................................................... 84561

         Arrears of benefit and compensation

             The law .................................................................................................... 84566

             Meaning of benefit ................................................................................... 84567

         The Supporting People Programme ............................................................. 84568

         Money paid to the families of the disappeared ............................................. 84575

         Money paid for loss of or damage to the home or personal possessions .... 84576

         Money which a person gets to buy, repair or alter a home

             The law .................................................................................................... 84577

             Essential repairs or alterations ................................................................ 84578

         Capital disregarded for 26 weeks or longer

         Dwelling left because of estrangement, divorce or
         dissolution of a civil partnership

             The law .................................................................................................... 84601

             Meaning of dwelling ................................................................................. 84602

             Meaning of lone parent............................................................................ 84603

             Meaning of child ...................................................................................... 84604

         Premises a person does not posses or occupy

             The law .................................................................................................... 84621

             The premises .......................................................................................... 84622

             Acquiring premises .................................................................................. 84623



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            Possession of premises .......................................................................... 84624

            Moving into the premises ........................................................................ 84629

         Premises which a person is taking steps to get possession of

            The law .................................................................................................... 84636

            The premises .......................................................................................... 84637

            The date a person first asked for legal advice or started legal
            proceedings ............................................................................................. 84638

            When legal proceedings usually start ..................................................... 84640

            Period of disregard .................................................................................. 84642

         Premises which are to be repaired or altered

            The law .................................................................................................... 84646

            The premises .......................................................................................... 84647

            Essential repairs or alterations ................................................................ 84648

            The steps ................................................................................................ 84649

            The date a person first takes steps to get the premises repaired or

            altered ..................................................................................................... 84650

            Period of disregard .................................................................................. 84652

         Premises which are to be disposed of

            The law .................................................................................................... 84656

            The premises .......................................................................................... 84657

            Who can dispose of premises ................................................................. 84658

            Reasonable steps.................................................................................... 84659

            The date a person first takes reasonable steps ...................................... 84661

            Period of disregard .................................................................................. 84663

         Capital disregard for the remainder of an award of State Pension Credit

         Arrears and concessionary payments of £5,000 or more

            When the disregard applies .................................................................... 84671

            Period of the disregard ............................................................................ 84672

            Meaning of award of State Pension Credit .............................................. 84673




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         What is the value of the capital

         General ......................................................................................................... 84691

         The law

             Capital in the UK other than Ulster or National Savings Certificates....... 84692

             Capital outside of the UK......................................................................... 84694

             Capital which is jointly held...................................................................... 84695

             Joint tenant .............................................................................................. 84697

             Tenant in common .................................................................................. 84699

         Further guidance on valuation

         Value

             General.................................................................................................... 84701

             Current market value............................................................................... 84705

             Current surrender value .......................................................................... 84707

             Price ........................................................................................................ 84709

             Capital with more than one value ............................................................ 84711

         Costs of sale ................................................................................................. 84712

         Encumbrances secured on capital ............................................................... 84717

         Value of a deemed or actual share in a capital
         asset outside the UK .................................................................................... 84720

         Valuation in particular cases

         Bank, Post Office and building society accounts .......................................... 84731

         Business assets

             The assets ............................................................................................... 84736

             Value of business assets ........................................................................ 84737

             Encumbrance secured on business assets ............................................ 84738

         Funds held by the Office of Care and Protection ......................................... 84740

         Personal equity plans ................................................................................... 84746

         Individual Savings Account........................................................................... 84748

         Right to receive income ................................................................................ 84751




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         Shares in a private company ........................................................................ 84756

         Stocks and shares quoted on the London Stock Exchange

             Value of stocks and shares ..................................................................... 84759

             Encumbrances secured on stocks and shares ....................................... 84764

         Government securities ................................................................................. 84768

         Unit trusts

             Value of unit trusts................................................................................... 84771

             Costs of sale ........................................................................................... 84772

         Notional capital

         The law ......................................................................................................... 84776

         Deprivation of capital

         General

             The law .................................................................................................... 84781

             Who the law applies to ............................................................................ 84782

         Have people deprived themselves of capital

             Meaning of deprive .................................................................................. 84791

             Onus of proof .......................................................................................... 84792

             Evidence that people no longer have capital ........................................... 84793

             What the decision maker decides ........................................................... 84794

             Evidence which may show people had capital ........................................ 84796

         Have people deprived themselves of capital for the purpose of getting
         State Pension Credit or more State Pension Credit

             Onus of proof .......................................................................................... 84801

             What the decision maker decides ........................................................... 84802

         Facts which decision makers should consider

             Were people mentally capable when they deprived themselves of
             capital ...................................................................................................... 84806

             Did people have a choice when they deprived themselves of capital ..... 84807

             Did people know capital affects the amount of State Pension Credit
             they can get ............................................................................................. 84809



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            Did people say what they were going to do with their capital .................. 84812

            When did people deprive themselves of capital ...................................... 84814

            What are people going to live on after they have deprived themselves
            of capital .................................................................................................. 84815

         People treated as sole owner or partner in a company

            The law .................................................................................................... 84821

            Like a sole owner or partner .................................................................... 84822

            Undertaking activities in the course of the business ............................... 84825

            What decision maker’s decide ................................................................ 84826

         What is the amount of notional capital

         How to work out the amount of notional capital

            The law .................................................................................................... 84831

            What decision makers decide ................................................................. 84832

         Disregards

            Capital of a company............................................................................... 84836

            Premises which are to be sold ................................................................ 84838

            Shares ..................................................................................................... 84839

         Value

            Capital of a company............................................................................... 84846

            Capital spent on a resource which is not worth as much ........................ 84849

            Capital which people have deprived themselves of ................................ 84850

         Diminishing notional capital rule

            The law .................................................................................................... 84861

            What decision makers decide ................................................................. 84862

            The diminishing notional capital rule ....................................................... 84863

            Meaning of benefit week ......................................................................... 84866

            Meaning of relevant week ....................................................................... 84867

            Meaning of relevant subsequent week .................................................... 84868

            How to work out and apply the reduction -
            person getting State Pension Credit........................................................ 84869



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            How to work out and apply the reduction - person not getting State
            Pension Credit ......................................................................................... 84881

            When to change the amount of the reduction ......................................... 84891

            How to work out and apply the new amount of the reduction.................. 84893

         Deemed weekly income from capital

         The law

            Deemed weekly income from capital ...................................................... 84911

            Specific accommodation ......................................................................... 84912

            When people are treated as living permanently in specific
            accommodation ....................................................................................... 84913

         How to work out the amount of deemed weekly income

            Total amount of capital ............................................................................ 84921

            When does income become capital ........................................................ 84922

            Deemed weekly income .......................................................................... 84923
         Appendix 1 How to work out deemed weekly income from capital




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         Meaning of personal pension scheme
                                                                                                1
84438    Personal pension scheme means the same as stated in pension law
        1 SPC Act (NI) 02, sec 17; Pension Schemes Act 1993, sec 1; Pension Schemes (Northern Ireland) Act 1993, sec 1


         84439 - 84440


         Personal possessions
84441    All personal possessions such as clothing, jewellery, and cars are disregarded
                       1
         indefinitely .
                                                                                        1 SPC Regs (NI), Sch 5, para 8



         Premises lived in by a partner or relative

         The law

84442    Premises such as a house are disregarded indefinitely if they are occupied as the
         home in whole or in part by a

         1.      person who is a

                 1.1        close relative (see DMG 84443) or

                 1.2        grandparent or

                 1.3        grandchild or

                 1.4        uncle or

                 1.5        aunt or

                 1.6        nephew or

                 1.7        niece

                 of the claimant or partner where that person has reached the qualifying age
                                                                     1
                 for State Pension Credit or incapacitated .

         2.      former partner of the claimant and the claimant and former partner are not
                 estranged, divorced or former civil partners whose partnership has been
                             2
                 dissolved .

         Note : A claimant and former partner who are separated are not necessarily
         estranged.
                                                                 1 SPC Regs (NI), Sch 5, para 4(a); 2 Sch 5, para 4(b)




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         Example

         Tony is in receipt of State Pension Credit. He goes into a care home and his wife
         Julie remains in their marital home.         Julie visits Tony on a regular basis.         The
         decision maker decides that Tony and Julie are not estranged.


         Meaning of close relative

84443    See DMG 77010 et seq for the meaning of close relative.


         Is the person incapacitated

84444    Incapacitated has no specific legal meaning. So when deciding if a partner or close
         relative is incapacitated for the purposes of DMG 84442 1., the decision maker may
         decide they are incapacitated if

         1.    they are receiving

               1.1      Attendance Allowance

               1.2      Constant Attendance Allowance

               1.3      Disability Living Allowance

               1.4      Incapacity Benefit

               1.5      Severe Disablement Allowance

               1.6      Statutory Sick Pay

               1.7      a benefit similar to the ones at 1.1 to 1.6 or

         2.    they are not receiving any of the benefits at 1. but they qualify for any one of
               them because of the illness or disability they have.


         What the decision maker decides if only part of the premises are
         occupied as the home

84445    The decision maker has to decide if

         1.    any part of the premises can be sold separately and

         2.    it is reasonable for it to be sold separately

         if the partner or close relative only lives in part of the premises as the home. For
         example, when a close relative lives in the farmhouse as the home and the premises
         are the farmhouse and farm land.

         84446 - 84455




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         Rent
84456    The value of the right to receive rent is disregarded indefinitely but not when a
                                                                                           1
         person has a reversionary interest in the property for which the rent is due .
                                                                          1 SPC Regs (NI), Sch 5, para 25


         Example

         Under the terms of Ernest’s will

         1.    Charlotte is left for the duration of her life the right to the rents from a cottage
               which is leased and

         2.    Percy is left the

               2.1      cottage subject to the lease and

               2.2      right to the rents from the cottage subject to Charlotte’s right to those
                        rents for the duration of her life.

         Charlotte has a life interest in the cottage because of her right to the rents for the
         duration of her life. Percy has a reversionary interest in the cottage because it is
         leased. The value of Charlotte’s right to the rents is disregarded until she dies
         because her interest in the cottage is not reversionary. When Charlotte dies the
         value of Percy’s right to the rents is not disregarded because his interest in the
         cottage is reversionary.

         Note : This disregard applies only for the purposes of determining deemed weekly
         income.

         84457 - 84460


         Second World War compensation payments
84461    Any payment to compensate for the fact that the claimant, or the claimant’s partner,
         or the claimant’s deceased spouse or deceased civil partner, or the claimant’s
         partner’s deceased spouse or deceased civil partner

         1.    was a slave labourer or

         2.    was a forced labourer or

         3.    had suffered property loss or

         4.    had suffered personal injury or

         5.    was a parent of a child who had died




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         during the Second World War is disregarded indefinitely. The disregard does not
         apply to a payment of war disablement pension, war widow’s pension or war
                           1
         widower’s pension .

         Note :    Lump sum gratuities paid under the Naval, Military and Air Forces etc.
         (Disablement and Death) Service Pensions Order 1983 do not fall within the
         definition of a war pension. Such payments would be disregarded indefinitely.
                                                                     1 SPC Regs (NI), Sch 5, para 14



         The Independent Living Fund (2006)

         The law

84462    One-off payments made from the Independent Living Fund (2006) are disregarded
                     1
         indefinitely .
                                                                   1 SPC Regs (NI), Sch 5, para 15(1)



         Meaning of the Independent Living Fund (2006)

84463    The Independent Living Fund (2006) was set up on 10.4.06 between the Secretary
         of State on the one part and Margaret Rosemary Cooper, Michael Beresford Boyall
                                                    1
         and Marie Theresa Martin on the other part .
                                                                           1 SPC Regs (NI), reg 1(2)


         84464 - 84466


         Payment included with other capital

84467    The disregard does not apply to the other capital if the payment is included with
         other capital.

84468    Accept any money withdrawn is from the other capital and not the payment if money
         is withdrawn from an account which includes the payment and other capital. Accept
         any money withdrawn is from the payment if there is evidence of this.

         84469 - 84474




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         The Macfarlane Trusts, the Fund, Eileen Trust, MFET
         Limited, Skipton Fund or the London Bombings Relief
         Charitable Fund

         The law
                                                                                   1
84475    One-off payments made from the Trusts are disregarded indefinitely .
                                                                       1 SPC Regs (NI), Sch 5, para 15(1)


84476    A payment from money which a person gets from the Trusts is disregarded
         indefinitely if the payment is made

         1.    by or on behalf of the person who got the money from the Trusts and that
               person

               1.1      has haemophilia or is a qualifying person or

               1.2      had haemophilia or was a qualifying person if the person has died and

         2.    to or for the benefit of a partner or former partner of the person who got the
               money from the Trusts and they

               2.1      are not estranged, divorced or part of a dissolved civil partnership or

               2.2      were not estranged, divorced or part of a dissolved civil partnership if
                                                                 1
                        the person who got the money has died .
                                                                       1 SPC Regs (NI), Sch 5, para 15(2)


84477    A payment from money which a partner or former partner gets from the Trusts is
         disregarded indefinitely if the payment is made by or on behalf of a partner or former
         partner of a person who

         1.    has haemophilia or is a qualifying person or

         2.    had haemophilia or was a qualifying person if the person has died

         and they are not estranged, divorced or part of a dissolved civil partnership or were
                                    1
         not if the person has died .
                                                                       1 SPC Regs (NI), Sch 5, para 15(3)


84478    Any capital the person gets from the income or capital of the payment

         1.    from the Trusts or

         2.    at DMG 84476 - 84477

                                     1
         is disregarded indefinitely .
                                                                       1 SPC Regs (NI), Sch 5, para 15(6)




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         The Trusts

84479    The Trusts means

         1.    the Macfarlane Trust

         2.    the Macfarlane (Special Payments) Trust

         3.    the Macfarlane (Special Payments) (No. 2) Trust

         4.    the Fund and

         5.    the Eileen Trust

         6.    MFET Limited

         7.    Skipton Fund and
                                                             1
         8.    the London Bombings Relief Charitable Fund .
                                                         1 SPC Regs (NI), Sch 5, para 15(1) & para 15(7)



         The Macfarlane Trust

84480    The Macfarlane Trust is the name of a charitable trust set up with part of the money
         being given by the Secretary of State to the Haemophilia Society for the relief of
                                                                        1
         poverty or distress among those suffering from haemophilia .
                                                                              1 SPC Regs (NI), reg 1(2)



         The Macfarlane (Special Payments) Trust

84481    The Macfarlane (Special Payments) Trust is the name of a discretionary trust set up
         on 29.1.90 with part of the money being given by the Secretary of State for the
                                                                    1
         benefit of certain people who are affected by haemophilia .
                                                                               1 SPC Regs (NI), reg 1(2)



         The Macfarlane (Special Payments) (No. 2) Trust

84482    The Macfarlane (Special Payments) (No. 2) Trust is the name of a discretionary trust
         set up on 3.5.91 with part of the money being given by the Secretary of State for the
                                                                                              1
         benefit of certain people who are affected by haemophilia and other people . The
         other people are people who

         1.    have become infected with HIV or

         2.    were at risk of infection

         because of contact with haemophiliacs.
                                                                               1 SPC Regs (NI), reg 1(2)




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         The Fund

84483    The Fund is money made available from time to time by the Secretary of State for
         the benefit of people who satisfy the terms of the scheme which was set up in
                                                          1
         Scotland on 10.4.92 and elsewhere on 24.4.92 . It benefits non-haemophiliacs who
         were infected with HIV whilst undergoing treatment by NHS blood or tissue transfer
         or blood products. It makes one-off payments.
                                                                             1 SPC Regs (NI), reg 1(2)



         Eileen Trust

84484    Eileen Trust is the name of a charitable trust set up on 29.3.93 with money given by
                                                                                                1
         the Secretary of State for the benefit of persons who satisfy the terms of the trust . It
         further benefits non-haemophiliacs who benefit under the Fund. It makes payment
         for occasional or continuing need.
                                                                             1 SPC Regs (NI), reg 1(2)



         MFET Limited
                                                                                      1
84485    The Department of Health funds an organisation called MFET Limited to provide
         financial help to people who have been infected with Human Immunodeficiency Virus
         as a result of treatment with NHS blood or blood products.
                                                                             1 SPC Regs (NI), reg 1(2)



         The Skipton Fund

84486    The Skipton Fund is the Skipton Fund Limited which was incorporated on 25.3.04 to
         administer an ex-gratia payment scheme for the benefit of people suffering from
         Hepatitis C and other people eligible for a payment in accordance with the scheme’s
                   1
         provisions . The ex-gratia payments will be a

         1.    lump sum payment of £20,000 to people infected with Hepatitis C and

         2.    further payment of £25,000 to people who develop advanced liver disease.

         Note 1 : No payments will be made in respect of people who died before 29.8.03 or
         recover from Hepatitis C naturally.

         Note 2 : Where a person who is entitled to an ex-gratia payment dies on or after
         29.8.03 but before a payment can be made, the payment will be made to that
         person’s dependants.
                                                                             1 SPC Regs (NI), reg 1(2)




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         The London Bombings Relief Charitable Fund

84487    The London Bombings Relief Charitable Fund was established on 11 July 2005
         following the terrorist attacks carried out in London on 7 July 2005. People who
         were bereaved, or who suffered injury, may receive lump sum payments from the
         London Bombings Relief Charitable Fund.


         Qualifying person

84488    Qualifying person means a person for whom a payment has been made from the
         Fund, the Eileen Trust, MFET Limited, the Skipton Fund or the London Bombings
                               1
         Relief Charitable Fund .
                                                                             1 SPC Regs (NI), reg 1(2)



         Evidence

84489    The Department has agreed the payments from the

         1.     Macfarlane Trust

         2.    Macfarlane (Special Payments) Trust

         3.    Macfarlane (Special Payments) (No. 2) Trust

         4.    Fund

         5.    Eileen Trust

         6.    Skipton Fund

         7.    MFET Limited

         8.    the London Bombings Relief Charitable Fund

         do not have to be declared if they are kept separate from any other capital the
         person has. The person getting the payment is told this.

84490    Network Support Branch will get information about payments from those trusts or
         funds if it is needed. The trustees and Health and Social Services Board should not
         be contacted.


         Payment included with other capital

84491    The disregard does not apply to the other capital if the payment is included with
         other capital.




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84492    Accept any money withdrawn is from the other capital and not the payment if money
         is withdrawn from an account which includes the payment and other capital. Accept
         any money withdrawn is from the payment if there is evidence of this.


         Other payments which are disregarded

84493    Payments to or for the benefit of some other person are disregarded (see DMG
         84531).


         Trusts
84494    Property held on trust is disregarded indefinitely if

         1.    payments can be made or

         2.    the trustees have discretion to make payments

                                                                                                              1
         from the trust to or for the benefit of the claimant, or the claimant’s partner, or both .
         This does not apply to any property held under a charitable trust set up under certain
                   2
         legislation . Nor does it apply to any payment made as a result of a personal injury
                                 3
         which is placed in trust .

         Note : This disregard applies only for the purposes of determining deemed weekly
         income.
                                      1 SPC Regs (NI), Sch 5, para 28; 2 Sch 5, para 28(a) & Charities Act 1993;
                                                                             3 SPC Regs (NI), Sch 5, para 28(b)


         84495 - 84520




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         Capital disregarded for up to two years

         Payment to sufferers of variant Creutzfeldt-Jakob
         disease and their partners

         The law

84521    Any trust payment made to a claimant, or the claimant’s partner, is disregarded for
         two years after the date the trust payment is made if one of the partners

         1.    is a parent of a diagnosed person or

         2.    a person acting in place of the diagnosed person’s parent or

         3.    a person who was acting in place of the diagnosed person’s parent at the date
                                                 1
               of the diagnosed person’s death .
                                                          1 SPC Regs (NI), Sch 5, para 13(1)(c) & 13(2)(b)


84522    Any payment made to a claimant, or the claimant’s partner, is disregarded for two
         years after the date the payment is made if

         1.    one of the partners

               1.1      is a parent of a diagnosed person or

               1.2      a person acting in place of the diagnosed person’s parent or

               1.3      a person who was acting in place of the diagnosed person’s parent at
                                                                   1
                        the date of the diagnosed person’s death and

         2.    the payment is made

               2.1      by a person or

               2.2      from the estate of a person
                                                          1
               to whom a trust payment has been made .
                                                         1 SPC Regs (NI), Sch 5, para 13(3) (c) & 13(4) (b)


84523    For the purposes of DMG 84521 - 84522, acting in place of the diagnosed person’s
         parents at the date of the diagnosed person’s death includes a person who would
         have been acting in place of the diagnosed person’s parents at the date of the
         diagnosed person’s death but for the diagnosed person residing in a residential care
                                                          1
         home, nursing home or independent hospital .           See DMG 77005 et seq for the
         meaning of residential care home, nursing home or independent hospital.
                                                                       1 SPC Regs (NI), Sch 5, para 13(5)(b)




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84524    See DMG 84426 - 84427 for guidance on other payments which are disregarded.


         Meanings

84525    For the meaning of

         1.    diagnosed person and

         2.    trust payment

         see DMG 84430 - 84432.

         84526 - 84530


         The Macfarlane Trusts, the Fund, Eileen Trust, MFET
         Limited, Skipton Fund or the London Bombings Relief
         Charitable Fund

         The law

84531    A payment from money which a person gets from the Trusts is disregarded from the
         date of payment to two years after the date of death of the person who gets the
         money from the Trust if the payment is made

         1.    by or on behalf of the person who got the money from the Trusts and that
               person

               1.1      has haemophilia or is a qualifying person and

               1.2      has no

                        1.2.a    partner or former partner from whom the person is not
                                 estranged, divorced or part of a dissolved civil partnership or

                        1.2.b    child who is or has been a member of the person’s household
                                 and

         2.    to the

               2.1      person’s parent or step-parent or

               2.2      person standing in place of the parent if there is no parent or step-
                        parent and at the date of the payment the person is a

                        2.2.a    child or
                                                                                    1
                        2.2.b    student who has not finished full time education .
                                                                       1 SPC Regs (NI), Sch 5, para 15(4)




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84541    Qualifying course means the same as it does for certain rules in Jobseeker’s
                               1
         Allowance legislation .
                                          1 SPC Regs (NI), Sch 5, para 15(8) & JSA Regs (NI), reg 4 & reg 17A(7)


84542    Training allowance means an allowance paid

         1.     out of public funds by

                1.1     a Government department or

                1.2     by, or on behalf of, the Department for Employment and Learning and

         2.     to people for their maintenance or for a member of their family and

         3.     for a period or part of a period when those people are following a course of
                training or instruction

                3.1     provided by or under arrangements made with that department or

                3.2     approved for him by that department or

                3.3     provided or approved by or on behalf of the Department for
                        Employment and Learning.

84543    A training allowance does not include an allowance paid by any Government
         department to, or for, people who are following a course of full-time education unless
         it is paid

         1.     under certain employment and training law or
                                                    1
         2.     to a person training as a teacher .
                                                  1 SPC Regs (NI), Sch 5, para 15(8) & E&T Act (NI) 1950, sec 1



         Other meanings

84544    For the meaning of

         1.     the Trusts and

         2.     qualifying person

         see DMG 84479 and 84488.


         Payment included with other capital

84545    The disregard does not apply to the other capital if the payment is included with
         other capital.




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84546    Accept any money withdrawn is from the other capital and not the payment if money
         is withdrawn from an account which includes the payment and other capital. Accept
         any money withdrawn is from the payment if there is evidence of this.

         84547 - 84560




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         Chapter 85 - Income other than
         earnings

         Contents

         General
         Introduction

         Scope of this chapter .................................................................................... 85000

         The calculation and treatment of income ..................................................... 85001

         What is income ........................................................................................... 85003

         Deemed weekly income from capital............................................................ 85005

         Income from capital - when deemed income
         has been taken into account ........................................................................ 85007

         How much income should be taken into account................................... 85015

         Income of the claimant’s partner .................................................................. 85016

         Polygamous marriages ................................................................................. 85017

         Multiple relationships .................................................................................... 85018

         Rounding of fractions ................................................................................... 85019

         Payments made in a foreign currency .......................................................... 85020

         Deductions of income tax and social security contributions ......................... 85021

         Overpayment recovery from other income ................................................... 85022

         Treatment of income for part-week payments at the start of entitlement ..... 85024



         Calculation of weekly income
         At the start of a claim or new assessed income period ......................... 85030

         Meaning of benefit week ............................................................................ 85031

         Period of a week or less ............................................................................. 85032

         Period of a month ....................................................................................... 85033

         Period of three months ................................................................................. 85034



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         Period of a year ............................................................................................ 85035

         Period of more than a week ......................................................................... 85036

         Averaging of amounts .................................................................................. 85037

         Period for royalties, copyright payments, lending
         right payments and occasional payments ................................................... 85039

         Date on which contribution-based Jobseeker’s Allowance, Maternity
         Allowance, contribution-based Employment and Support Allowance,
         Incapacity Benefit or Severe Disablement Allowance are treated as paid ... 85040

         Questions on the treatment of income ......................................................... 85042



         Changes in weekly income
         Deemed increase to retirement pensions or annuities
         income other than Retirement Pension ................................................... 85052

         Deemed increase based on actual increase ................................................ 85054

         Deemed increase based on standard increase ............................................ 85057

         Final payments of income ......................................................................... 85058

         Meaning of regular payment ......................................................................... 85059

         Period over which final payments are taken into account ............................ 85060

         Date final payments are treated as paid ....................................................... 85061

         Treatment of arrears of income/benefits

         Arrears of other income ................................................................................ 85063

         Arrears of benefit .......................................................................................... 85065

             Meaning of benefit ................................................................................... 85066



         Income taken fully into account
         Types of income taken fully into account .............................................. 85091

         Foreign social security benefits .................................................................... 85092

         Meaning of foreign social security benefit .................................................... 85093

         Meaning of foreign state retirement pension ................................................ 85094

         Deductions from benefits.............................................................................. 85095

         Benefits taken fully into account .............................................................. 85100


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Decision Makers Guide                                                                                                Contents



         Meaning of social security benefits............................................................... 85101

         Bereavement allowance ............................................................................... 85102

         Carer’s Allowance......................................................................................... 85103

         Contribution-based Employment and Support Allowance ............................ 85104

         Incapacity Benefit ......................................................................................... 85105

         Industrial death benefit ................................................................................. 85106

         Industrial injuries disablement benefit .......................................................... 85107

         Contribution-based Jobseeker’s Allowance ................................................. 85109

         Maternity Allowance...................................................................................... 85110

         Pneumoconiosis, byssinosis and miscellaneous diseases
         benefit scheme ............................................................................................. 85112

         Severe disablement allowance ..................................................................... 85114

         War orphan’s pension .................................................................................. 85115

         Widow’s pension .......................................................................................... 85116

         Working tax credit ........................................................................................ 85117

             Treatment of Working Tax Credit income paid
             incorrectly to the claimant........................................................................ 85118

         Workmen’s compensation (supplementation) scheme ................................ 85119

         Retirement pension income taken fully into account ............................. 85130

         Retirement pension ...................................................................................... 85131

         Occupational pensions ................................................................................. 85133

             Meaning of occupational pension scheme .............................................. 85134

         Personal pensions ........................................................................................ 85138

             Meaning of personal pension scheme .................................................... 85139

         Retirement annuity contracts ........................................................................ 85140

             Meaning of retirement annuity contract ................................................... 85141

         Retirement annuities purchased on divorce ................................................. 85142

         Overseas arrangements ............................................................................... 85143

             Meaning of overseas arrangements ........................................................ 85144

         Foreign annuities or insurance policies ........................................................ 85145




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Decision Makers Guide                                                                                                   Contents



         Civil list pensions .......................................................................................... 85146

         Equity release schemes ............................................................................... 85148

             Meaning of equity release schemes ........................................................ 85149

         Financial Assistance Scheme ...................................................................... 85150

         Pension Protection Fund .............................................................................. 85152

         Other income taken fully into account

         Annuity income ............................................................................................. 85170

         Armed forces death in service awards to children ....................................... 85172

         Payments from the Armed Forces and Reserve Forces
         Compensation Scheme ................................................................................ 85173

         Maintenance payments ................................................................................ 85174

         Income from certain disregarded capital ...................................................... 85175

         Royalties, copyright payments and lending right payments .......................... 85176



         Income disregarded in part
         Income that has a £10 disregard

         Types of income with a £10 disregard .......................................................... 85200

             War disablement pensions ...................................................................... 85201

             War widow’s or widower’s pension ......................................................... 85210

             Armed Forces and Reserve Forces Compensation Scheme ................. 85211

             Definitions................................................................................................ 85212

             Guaranteed income payments ................................................................ 85214

             Payments to victims of National Socialist Persecution……………………85216

             Widowed parent’s allowance ................................................................... 85217

             Widowed mother’s allowance.................................................................. 85218

         Income with partial disregards ............................................................... 85220

         Home income plans

             What is a home income plan................................................................... 85221

             What is an annuitant ............................................................................... 85222

             Payments from home income plans ........................................................ 85223



Volume 14 Amendment 22                                                                                      September 2010
Decision Makers Guide                                                                                                   Contents



             Notional annuity income .......................................................................... 85225

         Income from people living in the claimant’s home ..................................... 85230

             Income from boarders ............................................................................. 85231

             What is board and lodging accommodation ............................................ 85232

             Income from subletting ............................................................................ 85239

         Other types of income partially disregarded

         Civilian war injury pensions .......................................................................... 85241

         Royalty payments ......................................................................................... 85242

         Discretionary trusts

             What is a discretionary trust .................................................................... 85245

             Disregard ................................................................................................. 85246

             Weekly limit to £10 and £20 disregards .................................................. 85250



         Income fully disregarded
         Types of income fully disregarded ......................................................... 85280

         Types of income ignored for State Pension Credit purposes ............... 85283

         Attendance Allowances and Disability Living Allowance

         Attendance Allowances ................................................................................ 85285

         What constitutes Attendance Allowance ...................................................... 85286

         Disability Living Allowance ........................................................................... 85290

         Benefits fully disregarded

         Bereavement payment ................................................................................. 85294

         Child Benefit ................................................................................................. 85295

         Child dependency increases ........................................................................ 85296

         Child’s special allowance .............................................................................. 85297

         Christmas bonus .......................................................................................... 85298

         Guardian’s Allowance ................................................................................... 85300

         Housing Benefit ............................................................................................ 85301

         Mobility allowance and mobility supplement ................................................. 85302




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Decision Makers Guide                                                                                                     Contents



         Payments from the Social Fund under social security
         legislation...................................................................................................... 85303

         Statutory adoption pay .................................................................................. 85320

         Statutory maternity pay ................................................................................. 85321

         Statutory paternity pay .................................................................................. 85322

         Statutory sick pay ......................................................................................... 85323

         War widow’s/widower’s supplementary pensions ................................. 85331

         Other types of income fully disregarded

         Cost of conversion of foreign money ............................................................ 85335

         Income frozen abroad .................................................................................. 85340

         Discretionary trust payments ........................................................................ 85345

         Personal injury payments and structured settlements .................................. 85350

         Income from capital ...................................................................................... 85370



         Notional income
         General

         What is notional income ............................................................................... 85400

         Types of notional income ............................................................................. 85401

         Actual and notional income .......................................................................... 85402

         Treatment of notional income ....................................................................... 85403

         Deprivation of income................................................................................ 85408

         Deferral of state pension entitlement............................................................ 85409

         Deprivation ................................................................................................... 85411

         Meaning of deprive ....................................................................................... 85412

         Questions for consideration .......................................................................... 85416

         Was it the claimant’s income........................................................................ 85417

         Has a deprivation of income happened ........................................................ 85419

         Was the purpose of the deprivation to get or
         increase the amount of State Pension Credit ............................................... 85421

         Timing of the disposal .................................................................................. 85425




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Decision Makers Guide                                                                                                     Contents



         Trivial commutation of small pensions ......................................................... 85426

         Service users ................................................................................................ 85430

         Retirement Pension income available on application

         General ......................................................................................................... 85440

         Retirement Pension – notional income......................................................... 85441

         Deferring Retirement Pension ...................................................................... 85443

         Deferring Retirement Pension whilst an overlapping
         benefit is in payment..................................................................................... 85445

         Occupational pension schemes – notional income ...................................... 85453

         Personal pensions

             General.................................................................................................... 85454

             Personal pensions / occupational pensions where
             income withdrawal is allowed – notional income ..................................... 85455

             Amount of notional income ...................................................................... 85456

             From what date should the decision maker take
             notional income into account ................................................................... 85457

             Personal pensions/occupational pensions where
             income withdrawal is not allowed - notional income................................ 85458

             Amount of notional income...................................................................... 85459

             From what date should the decision maker
             take notional income into account ........................................................... 85460

         Meaning of money purchase benefits .......................................................... 85461

         What is a pension fund holder ...................................................................... 85462

         Who is a person who derives entitlement .................................................... 85463

         Information and evidence ............................................................................. 85465

         Lump sums on retirement ............................................................................ 85468

         Actual income ............................................................................................... 85476

         Provision under a retirement annuity contract .............................................. 85477

         Retirement annuity contract – notional income ............................................ 85478

         Payments of income to third parties ........................................................ 85500

         What is a third party ..................................................................................... 85501



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Decision Makers Guide                                                                                Contents



         Meaning of payment in respect of a person ................................................. 85502

         Pension payments made to a trustee in bankruptcy .................................... 85504

         Appendix 1 Definitions of war pensions




Volume 14 Amendment 22                                                                     September 2010
Decision Makers Guide                                                                             What is income




         What is income
                                                                                              1
85003    Income for State Pension Credit is only what is defined as income in law. Apart
                                2                                                  3
         from a few exceptions it includes all social security benefits . It also includes other
         specific types of income, income from capital and Retirement Pension and annuity
         income as listed in DMG 85130 et seq.
                             1 SPC Act (NI) 02, sec 15 (1); 2 SPC Regs (NI), reg 15; 3 SPC Act (NI) 02, sec 17(1)
                     1
85004    Income is

         1.    earnings

         2.    working tax credit

         3.    retirement pension and annuity income

         4.    income from annuity contracts
                                                                           2
         5.    social security benefits other than those specified

         6.    foreign social security benefits similar to those included at 5.

         7.    war disablement pension or war widows/widowers pension

         8.    foreign war disablement pension or war widows/widowers pension

         9.    payments from the Armed Forces and Reserve Forces Compensation
               Scheme

         10.   income from capital
                                               3
         11.   any income that is specified
                                                                                                   4
         12.   any payment made to the claimant in lieu of any specified income .
                                                        1 SPC Act (NI) 02, sec 15(1); 2 SPC Regs (NI), reg 15(1);
                                                         3 SPC Regs (NI), reg 15; 4 SPC Regs (NI), reg 15(5)(h)



         Deemed weekly income from capital
                                                                       1
85005    Capital is deemed to provide a weekly income                      unless the capital asset is
                         2
         disregarded for income purposes.
                                                                               1 SPC Regs (NI), reg 15(6); 2 Sch 5

85006    Certain types of capital (such as a property held in a discretionary trust) are
                                                                                              1
         disregarded only for the purpose of applying the deemed income rule , so any actual
         income the capital asset generates will be taken into account.




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Decision Makers Guide                                                               What is income



         Note : DMG Chapter 84 gives guidance on how to calculate an amount of deemed
         weekly income from capital and explains when certain capital is disregarded for
         income purposes.
                                                                        1 SPC Regs (NI), Sch 5, Part II



         Income from capital - when deemed income has been
         taken into account
85007    Most capital assets, unless disregarded, are deemed to yield a weekly income (DMG
         84911). Where deemed income

         1.    is taken into account or

         2.    would be taken into account except for the fact that the claimant’s capital is
               below the lower limits of £10,000 for deemed income to apply

                                                                            1
         any actual income generated from the capital is fully disregarded .
                                                                        1 SPC Regs(NI), Sch 4, para 18


         Example 1

         When David claimed State Pension Credit he told the decision maker that he owned
         a share in a second property, which he had inherited from a relative.

         He had tried to sell the property but had been unsuccessful, so three months before
         he claimed State Pension Credit he and the other owners sub-let the property to two
         students on a nine-month contract. David collects the rent monthly and occasionally
         does minor repairs, when required.

         The decision maker decided that David is not operating a business. The decision
         maker also decided that David’s share of the property cannot be disregarded for
         deemed income purposes.

         A valuation is requested and David’s share of the property is valued at £14,000, so
         deemed income of £8 a week is taken into account.

         However, because deemed income is being taken into account, the income David
         receives from sub-letting the property is fully disregarded.

         Example 2

         Janet claims State Pension Credit. She owns a share in a holiday caravan.

         Janet’s share is valued at £3,000. The decision maker decides that Janet’s share of
         the caravan cannot be disregarded for deemed income purposes, however no
         deemed income is taken into account because Janet’s capital is below £10,000.



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Decision Makers Guide                                                           What is income



         Janet uses the caravan mainly for her own holidays, although occasionally it is
         rented out to friends.

         In August Janet declares that she has received £75 because the caravan was let out
         to a friend for a week. The decision maker decides that Janet is not operating a
         business. The £75 income Janet received is not taken into account because the
         capital is not disregarded for deemed income purposes.

         85008 - 85014




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Decision Makers Guide                                  How much income should be taken into account




         How much income should be taken into
         account?
85015    The decision maker should take into account the gross amount of an income.
         Disregard the sums in DMG 85021 - 85023 and 85200 et seq. when calculating
         gross income. For social security benefits consider the guidance at DMG 85095.
         No disregards should be made for any other expenses or deductions.

         Note : For guidance on how to calculate a weekly amount see DMG 85030.


         Income of the claimant’s partner
85016    In a claim for State Pension Credit, calculate income of the claimant’s partner in the
                                        1
         same way as for the claimant . The income should then be treated as the claimant’s
                2
         income .

         Note : In State Pension Credit a member of a couple is referred to as a partner and
                                                        3
         both members are referred to as partners .
                                    1 SPC Regs (NI), reg 14; 2 SPC Act (NI) 02, sec 5; 3 SPC Regs (NI), reg 1(3)



         Polygamous marriages
85017    If a claimant or partner is married polygamously to two or more members of his
         household, the income of each of those members should be treated as the
                                                                                1
         claimant’s income and should be calculated in the same way .

         Note : DMG 77115 gives guidance on who may be members of the claimant’s
         household.
                                                                               1 SPC Regs (NI), Sch 3, para 1(4)



         Multiple relationships
85018    There is no special rule to cover multiple relationships. If the claimant is

         1.    married to any, but not all of the other members of the relationship - the
               decision maker should treat any unmarried member as a claimant who has no
               partner. The income of each separate claimant who has no partner should be
               calculated accordingly

         2.    not married to any of the members - the decision maker should treat each
               member of the relationship as a claimant who has no partner.                           This is
               because when a claimant has a relationship similar to marriage with two or



Volume 14 Amendment 22                                                                     September 2010
Decision Makers Guide                               How much income should be taken into account



               more people, none of them can form an unmarried couple. The income of
               each separate claimant should be calculated accordingly.


         Rounding of fractions
85019    Where the calculation of income results in a fraction of a penny, the amount should
                                                                                                        1
         be rounded to a penny, either up or down, whichever is to the claimant’s advantage .

         Note : If more than one calculation is involved in deciding the amount of an income,
         each fraction should be rounded to the claimant’s advantage.
                                                                                1 SPC Regs (NI), reg 24A



         Payments made in a foreign currency
85020    Where payments are made in a foreign currency, the value of the payment should
                                                                                                    1
         be calculated by taking the sterling equivalent on the date the payment was made .
                                                                               1 SPC Regs (NI), reg 17(6)



         Deductions of income tax and social security
         contributions
                                         1
85021    Any tax paid, or due to be paid and social security contributions should be
                  2
         deducted when calculating any income other than earnings that is to be

         1.    taken fully into account or

         2.    disregarded in part.
                                                                1 R(IS) 4/05; 2 SPC Regs (NI), reg 17(10)


         Note : Where the amount of tax due to be paid has been assessed under Her
         Majesty’s Revenue and Customs Tax Self Assessment process then decision
         makers should consider revision action if it is shown that there is a tax liability or the
         actual tax liability differs from the forecast provided by the claimant. DMG Chapter
         03 provides guidance on revision.

         Example

         Sara makes a claim for State Pension Credit on 5 June. Her appropriate minimum
         guarantee is £109.45.

         Sara has been receiving Retirement Pension of £110.50 since April.

         Under Her Majesty’s Revenue and Customs Tax Self Assessment process Sara
         calculates her forecast tax liability for Her Majesty’s Revenue and Customs and
         estimates that she will be liable for £79 tax on this year’s Retirement Pension.


Volume 14 Amendment 22                                                              September 2010
Decision Makers Guide                             How much income should be taken into account



         The decision maker calculates the amount of Retirement Pension to be taken into
         account as follows :

         £110.50 a week Retirement Pension being paid less £1.52 a week tax [£79 divided
         by 52 and rounded up] = £108.98

         The decision maker takes £108.98 Retirement Pension into account.

         Sara is entitled to 47 pence Guarantee Credit a week.


        Overpayment recovery from other income
85022    Except where DMG 85095 applies, when income paid to a claimant is reduced
         because the paying authority is enforcing recovery of an overpayment, the decision
         maker should take into account the net amount. This is the amount the claimant
         actually receives unless the circumstances in DMG 85023 apply.

         Example

         Peter is in receipt of State Pension Credit. His partner Lisa, works and is in receipt
         of Working Tax Credit. Her Majesty’s Revenue and Customs has awarded Working
         Tax Credit at a rate of £50 per week.         However, due to the recovery of an
         overpayment which occurred on a previous award of Working Tax Credit, the
         amount Lisa actually receives is £28 per week. When determining the amount of
         Working Tax Credit to take into account on Peter’s award of State Pension Credit,
         the decision maker takes into account Lisa’s Working Tax Credit of £28 per week.

85023    If a claimant volunteers to repay an overpayment by offering to have deductions
         made from his income, the decision maker should consider whether the claimant
         has deprived himself of that income (see DMG 85408 et seq).


        Treatment of income for part-week payments at the start
        of entitlement
85024    A claimant may only be paid a guarantee credit for a part week at the start of
         entitlement to State Pension Credit in certain circumstances (see DMG Chapter 79).
         When calculating the amount payable for the part-week at the start of entitlement the
                                                 1
         decision maker should ignore all income .

         Note : DMG 79100 et seq. gives guidance on part-week payments.
                                                                         1 SPC Regs (NI), reg 13A(2)

         85025 - 85029




Volume 14 Amendment 22                                                         September 2010
Decision Makers Guide                         At the start of a claim or new assessed income period




         Calculation of weekly income

         At the start of a claim or new assessed
         income period
85030    At the start of a claim for State Pension Credit, or a new assessed income period,
         when calculating whether and how much a claimant is entitled to, the decision maker
         should

         1.    establish the first day

               1.1      the claimant satisfies the conditions for entitlement to State Pension
                        Credit (see DMG Chapter 77), including whether the claimant is in
                        receipt of any income on that day or

               1.2      of the new assessed income period (see DMG Chapter 83)

         2.    decide whether any income should be taken fully into account, partially
               disregarded or fully disregarded (see DMG 85091 et seq)

         3.    calculate a weekly amount of income (see DMG 85032 et seq)

         4.    add to the weekly amount

               4.1      any deemed weekly income from capital (see DMG Chapter 84) and/or

               4.2      any earnings (see DMG Chapter 86) and

         5.    take the total weekly amount into account from the first day of the first benefit
               week and /or new assessed income period.

         Note : If at the start of the claim the claimant is entitled to a part-week payment all
         income is ignored for that part-week. DMG Chapter 79 gives guidance on part-week
         payments.


         Meaning of benefit week
                               1
85031    Benefit week means

         1.    where State Pension Credit is paid in advance, the period of 7 days beginning
               on the day on which State Pension Credit is payable to the claimant

         2.    where State Pension Credit is paid in arrears, the period of 7 days ending on
               the day which State Pension Credit is payable to the claimant.
                                                                             1 SPC Regs (NI), reg 1(2)




Volume 14 Amendment 22                                                           September 2010
Decision Makers Guide                           At the start of a claim or new assessed income period




         Period of a week or less
85032    Where the period for which a payment is made is a week or less, the claimant’s
                                                                          1
         weekly income will include the whole amount of the payment .
                                                                              1 SPC Regs(NI), reg 17(1)(a)



         Period of a month
85033    Where the payment is for a period of a month the weekly amount should be worked
         out by

          1.      multiplying the amount of the payment by twelve and
                                           1
          2.      dividing the result by 52 .
                                                                          1 SPC Regs (NI), reg 17(1)(b)(i)


         Example

         A payment of £100 is made for a period of a month. The decision maker calculates
         that the weekly amount is £23.07 (£100 x 12 ÷ 52).


         Period of three months
85034    Where the payment is for a period of three months the weekly amount should be
         worked out by

          1.      multiplying the amount of the payment by four and
                                           1
          2.      dividing the result by 52 .
                                                                          1 SPC Regs(NI), reg 17(1)(b)(ii)


         Example

         A payment of £100 is made for a period of three months. The decision maker
         calculates that the weekly amount is £7.69 (£100 x 4 ÷ 52).


         Period of a year
85035    Where the payment is for a period of a year the weekly amount should be worked
                                                             1
         out by dividing the amount of the payment by 52 .

         Note : See DMG 85039 for payments which are treated as if they are made for a
         period of a year.
                                                                         1 SPC Regs (NI), reg17 (1)(b)(iii)




Volume 14 Amendment 22                                                               September 2010
Decision Makers Guide                       At the start of a claim or new assessed income period




         Period of more than a week
85036    Where the payment is for more than a week, and DMG 85033 - 85035 does not
         apply, the weekly amount should be worked out by

          1.   multiplying the amount of the payment by seven and

          2.   dividing the result by the number of days in the period for which the payment
                            1
               is made .
                                                                        1 SPC Regs (NI), reg 17(1)(b)(iv)

         Example

         A payment of £100 is made for a period of four weeks. The decision maker
         calculates that the weekly amount is £25 (£100 x 7 ÷ 28).


         Averaging of amounts
                                                                               1
85037    The weekly amount of a claimant’s income should be averaged where the income
         varies and has changed more than once. The decision maker should average on
                        2
         the basis of

         1.     the last two payments if they are one month or more apart or

         2.    the last four payments, if the last two payments are less than a month apart or

         3.    another period if it means a more accurate weekly amount can be calculated.
                                                         1 SPC Regs (NI), reg 17(2)(b); 2 reg 17(2)(b)(ii)

                                1
85038    The last payments referred to in DMG 85037 are the last payments before the date
         the claim was made or treated as made or if there is a later supersession the last
         payments before the date of the supersession.
                                                                               1 SPC Regs (NI), reg 17(3)


         Example

         The claimant is receiving spousal maintenance from her ex-husband under a
         voluntary agreement. However, the amounts vary each week

         Week 1             £20

         Week 2             £15

         Week 3             £25

         Week 4             £20

         Total =            £80



Volume 14 Amendment 22                                                              September 2010
Decision Makers Guide                            At the start of a claim or new assessed income period



         The decision maker decides to average over the last four payments because the last
         two payments are less than a month apart. The decision maker calculates that the
         weekly amount is £20 (£80  4).


         Period for royalties, copyright payments, lending right
         payments and occasional payments
                                                                                                 1
85039    The amount of each payment should be treated as if made in respect of a year if the
         claimant receives

         1.     royalties or other payments in respect of the use of, or the right to use any

                1.1      copyright or

                1.2      design or

                1.3      patent or

                1.4      trade mark or

         2.     any payment in respect of any

                2.1      book registered under the Public Lending Right Scheme 1982 or

               2.2       work made under any international public lending right scheme that is
                         similar to the Public Lending Right Scheme 1982 or

         3.     any payment made on an occasional basis (e.g. an irregular lump sum / ad-
                hoc payment(s) of spousal maintenance).
                                                                            1 SPC Regs(NI), reg 17(4)&(5)



         Date on which contribution-based Jobseeker’s
         Allowance, Maternity Allowance, contribution-based
         Employment and Support Allowance, Incapacity Benefit
         or Severe Disablement Allowance are treated as paid
85040    Special rules apply to payments of contribution-based Jobseeker’s Allowance,
         Maternity Allowance, contribution-based Employment and Support Allowance,
         Incapacity Benefit or Severe Disablement Allowance for which entitlement is
         calculated on a daily basis.        If the claimant receives one of these benefits the
         decision maker should treat each day’s benefit as paid on the day of the week in
                                         1
         respect of which it is payable from.
                                                                              1 SPC Regs (NI), reg 13B(1)




Volume 14 Amendment 22                                                               September 2010
Decision Makers Guide                         At the start of a claim or new assessed income period


                                                       1
85041    Any other benefit should be treated as paid

         1.    where the benefit is paid in advance, on the first day of the benefit week in
               which the benefit is payable from or

         2.    where the benefit is paid in arrears, on the last day of the benefit week in
               which the benefit is payable from.
                                                                           1 SPC Regs (NI), reg 13B(2)


         Example

         Les has just retired from work. He will be entitled to Retirement Pension of £97.65 a
         week. It will be paid fortnightly in arrears on a Thursday. Retirement Pension was
         awarded to Les from 12.4.10 with the first payment actually due to be paid to him on
         22.4.10. The first payment will cover the period 16.4.10 to 22.4.10.

         On 12.4.10 Les also makes a claim for State Pension Credit. His first payment of
         State Pension Credit is due to be paid to him on 22.4.10 and will cover the period
         16.4.10 to 22.4.10 (see DMG 79012).

         The decision maker decides that for the purposes of State Pension Credit, Les’s
         Retirement Pension of £97.65 has to be taken into account with a treat as paid date
         of 22.4.10 because this is the last day of the State Pension Credit benefit week in
         which the Retirement Pension is payable.


         Questions on the treatment of income
85042    The decision maker should make further enquiries if there is any doubt whether
         income fits into any of the definitions in this Chapter. Enquiries will usually be to the
         paying authority and should be done before any decision is made.

         85043 - 85051




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Decision Makers Guide                                     Types of income taken fully into account




         Income taken fully into account

         Types of income taken fully into account
85091    The following types of income should be taken fully into account when calculating
         income other than earnings

         1.    annuity income (except those annuities listed at DMG 85171)

         2.    armed forces death in service awards

         3.    bereavement allowance

         4.    Carer’s Allowance

         5.    contribution-based Employment and Support Allowance

         6.    Incapacity Benefit

         7.    industrial death benefit

         8.    industrial injuries disablement benefit

         9.    certain types of income from capital

         10.   inherited royalties / copyright payments

         11.   contribution-based Jobseeker’s Allowance

         12.   Maternity Allowance

         13.   maintenance payments for the claimant or partner

         14.   pneumoconiosis, byssinosis and miscellaneous diseases benefit scheme

         15.   retirement pension income (including increases for adult dependants)(see
               DMG 85130 et seq)

         16.   Severe Disablement Allowance

         17.   war orphan's pension

         18.   widow’s pension

         19.   Working Tax Credit

         20.   workmen’s compensation.

         Detailed guidance is given in DMG 85100 et seq.




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Decision Makers Guide                                     Types of income taken fully into account




         Foreign social security benefits
85092    All foreign social security benefits similar to those included at DMG 85091 should be
                                  1
         taken into account in full including any foreign state retirement pension.
                                                                           1 SPC Regs (NI), reg 15(2)



         Meaning of foreign social security benefit
                                                     1
85093    Foreign social security benefit means any benefit, allowance or other payment
         which is paid under the law of a country outside the UK and is in the nature of social
         security.
                                                                          1 SPC Act (NI) 02, sec 17(1)



         Meaning of foreign state retirement pension
                                                 1
85094    A foreign state retirement pension is

         1.    any retirement pension paid under the law of a country outside the UK and

         2.    in the nature of social security (like a Retirement Pension paid under UK law).
                                                                             1 SPC Regs (NI), reg 1(2)



         Deductions from benefits
85095    Where the payment of a social security benefit included at DMG 85091 has any
         deduction other than an adjustment as a result of

         1.    an overlapping benefit or

         2.    hospital down-rating or

         3.    a reduction in Incapacity Benefit in respect of pensions and councillor’s
               allowances

         4.    a reduction in contribution-based Employment and Support Allowance in
               respect of pensions, Pension Protection Fund periodic payments and
               councillor’s allowances

         the decision maker should take the amount of benefit before the deduction into
                 1
         account .

         Note : DMG 85021 gives guidance about deductions which are allowed for tax and
         social security contributions.
                                                                    1 SPC Regs (NI), reg 15(3) & 15(4)




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Decision Makers Guide    Types of income taken fully into account



         85096 - 85099




Volume 14 Amendment 22                         September 2010
Decision Makers Guide                                                Benefits taken fully into account




         Contribution-based Jobseeker’s Allowance
85109    Contribution-based Jobseeker’s Allowance received by the claimant or a partner
         should be taken fully into account. It is payable to unemployed people who have
         paid enough social security contributions.


         Maternity Allowance
85110    Maternity Allowance should be taken fully into account. It is payable to women who
         cannot get statutory maternity pay.

         85111


         Pneumoconiosis, byssinosis and miscellaneous
         diseases benefit scheme
85112    Pneumoconiosis, byssinosis and miscellaneous diseases scheme payments should
                                     1
         be fully taken into account . They are made to people who are not entitled to

         1.      industrial injuries disablement benefit or

         2.      workmen's compensation.
                                                                            1 SPC Regs (NI), reg 15(5)(c)


85113    The decision maker should however disregard any Constant Attendance Allowance
                                                                                1
         or any increase for exceptionally severe disablement allowance paid as a part of
         pneumoconiosis, byssinosis and miscellaneous diseases benefit scheme award.
                                                                       1 SPC Regs (NI), reg 15(1)(d) & (e)



         Severe Disablement Allowance
85114    Severe Disablement Allowance should be taken fully into account. It is a non
         contributory benefit payable after six months of illness.

         Note : Severe disablement allowance was abolished from 6.4.01 but may still be
         payable to people receiving it before that date.


         War orphan's pension
85115    War orphan's pension should be taken into account in full.




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Decision Makers Guide                                                 Benefits taken fully into account




         Widow's pension
85116    The decision maker should take widow’s pension fully into account. It may still be
         paid where it was claimed in respect of a death prior to 9.4.01.


         Working Tax Credit
                             1                                    2
85117    Working Tax Credit should be taken fully into account . It is an income-related
         benefit payable to people who

         1.    are working for at least 16 hours a week and

         2.    are responsible for at least one child or

         3.    have an illness or disability that reduces their earning capacity.
                                                              1 SPC Act (NI) 02, sec 17(1); 2 sec 15(1)(b)



         Treatment of Working Tax Credit income paid
         incorrectly to the claimant
85118    If a claimant who has ceased employment confirms that they have notified Her
         Majesty’s Revenue and Customs of the change in their circumstances, decision
         makers should not treat any payments of Working Tax Credit paid incorrectly by Her
         Majesty’s Revenue and Customs as the claimant’s income. However, any payments
         of Working Tax Credit paid to the claimant prior to any notification by the claimant to
         Her Majesty’s Revenue and Customs of a change in circumstance should be taken
                                 1
         into account as income .
                                                                              1 R(IS) 5/99 (Leeves v. CAO)


         Example 1

         Cliff finished work on Thursday 6.3.08 and made a claim for State Pension Credit on
         Monday 10.3.08. He told the decision maker that he had been receiving Working
         Tax Credit but had notified Her Majesty’s Revenue and Customs that his job had
         now ended.

         Her Majesty’s Revenue and Customs did not end the award and continued to pay
         Working Tax Credit to Cliff.

         Cliff was entitled to the 4 week Working Tax Credit run on for the period 7.3.08 to
         3.4.08.

         Although Cliff continued to receive Working Tax Credit for several weeks after the
         run on period the decision maker decides that the Working Tax Credit paid



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Decision Makers Guide                                               Benefits taken fully into account



         incorrectly by Her Majesty’s Revenue and Customs should not be taken into account
         as it was not Cliff’s income. Working Tax Credit should only be taken into account
         as income for the run on period.

         Example 2

         Joe finished work on 1.6.09 and made a claim for State Pension Credit on 19.6.09.
         He is in receipt of Working Tax Credit which the decision maker takes into account
         as an income when calculating Joe’s entitlement to State Pension Credit.

         On 19.10.09 Joe informs Her Majesty’s Revenue and Customs that he finished work
         in June. Her Majesty’s Revenue and Customs end Joe’s award of Working Tax
         Credit and calculate an overpayment based on the fact that he had finished work in
         June but had continued to receive Working Tax Credit.

         The decision maker supersedes the award of State Pension Credit and no longer
         takes the Working Tax Credit into account. The date of the relevant change for the
         purposes of the supersession is 19.10.09 which was the date that Joe informed Her
         Majesty’s Revenue and Customs of his change of circumstance.                  However the
         decision maker does not adjust the award of State Pension Credit to take account of
         the fact that Joe was overpaid Working Tax Credit for the period prior to the
         notification to Her Majesty’s Revenue and Customs. This is because at that time,
         Working Tax Credit was an income in payment to Joe and there is no disregard for
         it.

         Workmen's compensation (supplementation) scheme
85119    Workmen's       compensation    (supplementation)        which    replaced       workmen’s
         compensation for old cases should be taken fully into account.                It is paid for
         industrial injuries and diseases which were caused by employment before the start
         of the industrial injuries disablement benefit scheme.

85120    Any Constant Attendance Allowance or increase for exceptionally severe
                                1
         disablement allowance paid with workmen's compensation should be disregarded.
                                                                      1 SPC Regs (NI), reg 15(1)(d) & (e)

         85121 - 85129




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Decision Makers Guide                                      Other types of income fully disregarded




         Other types of income fully disregarded

         Cost of conversion of foreign money
85335    The decision maker should fully disregard any

         1.    bank charges or

         2.    commission

                                                                              1
         paid when income paid in foreign currency is converted to sterling .
                                                                       1 SPC Regs (NI), Sch 4, para 16

         Example

         Klaus claims State Pension Credit.

         He is retired and receives a pension of 500 Euros a month from his former employer
         in Germany. When Klaus’s bank converts the payment into sterling they charge a
         commission of £2. The decision maker disregards the £2 commission from the
         amount that Klaus receives in sterling.

         85336 - 85339


         Income frozen abroad
85340    The decision maker should fully disregard income which is

         1.    payable in a foreign country and

         2.    cannot be transferred to the UK

                                         1
         for as long as it is frozen abroad . Income will usually be frozen when the foreign
         country does not allow its currency to be transferred to the UK.
                                                                       1 SPC Regs (NI), Sch 4, para 15

         85341 - 85344


         Discretionary trust payments
85345    Any payment from a trust apart from those paid for one or more of the purposes
                                                                 1
         specified in DMG 85246 should be fully disregarded . If the trust was set up to
         compensate the claimant or their partner for a personal injury, payments are fully
         disregarded in the calculation of income for State Pension Credit.
                                                                     1 SPC Regs (NI), Sch 4, para 11(1)




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Decision Makers Guide                                          Other types of income fully disregarded



         85346 - 85349


         Personal Injury payments and structured settlements
85350    The decision maker should disregard any payment ordered by the court to be made
         to the claimant or claimant’s partner as a result of any personal injury suffered by
              1
         them .
                                                                           1 SPC Regs (NI), Sch 4, para 13


85351    A structured settlement may include a contingency fund that would be treated in the
         same way as any other personal injury lump sum award, but most of the award is
         used to provide an annuity making periodical payments to the claimant.

85352    The decision maker should disregard periodic payments made to the claimant or
                                                           1
         partner in settlement of a personal injury claim , including interim payments.
                                                                           1 SPC Regs (NI), Sch 4, para 14

         85353 - 85369


         Income from capital
                                                 1
85370    The decision maker should disregard any income generated from the following
         capital assets.

                                                     2
         1.       the dwelling occupied as the home (but only one home - see DMG 84395)

         2.       income from properties whose capital value is disregarded because they are

                  2.1   intended to be the claimant’s home but have not yet been occupied
                        (see DMG Chapter 84)

                  2.2   premises the claimant intends to live in and certain steps are being
                        taken to take possession (see DMG Chapter 84)

                  2.3   premises the claimant intends making their home but cannot move in
                        until essential repairs and improvements have been completed (see
                        DMG Chapter 84)

                  2.4   occupied wholly or partly by a partner or close relative of a single
                        claimant where that person is either aged at least 60 or incapacitated
                        (see DMG Chapter 84)

                  2.5   occupied wholly or partly by the claimant’s former partner (see DMG
                        Chapter 84)

                  2.6   the former marital home (see DMG Chapter 84)




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Decision Makers Guide                                      Other types of income fully disregarded



               2.7      premises that the claimant is taking reasonable steps to sell (see DMG
                        Chapter 84)

         3.    any future interest in property of any kind apart from land or premises in
               respect of which the claimant has granted a subsisting lease or tenancy

         4.    personal possessions

         5.    assets of any business owned in whole or in part by the claimant for the
               purposes of which he is engaged as a self-employed earner or, if he has
               ceased to be engaged, for a reasonable period to allow for disposal of those
               assets

         6.    assets of any business owned in whole or in part by the claimant if he is not
               engaged as a self-employed earner by reason of some disease or
               disablement but he intends to return to work as a self-employed earner as
               soon as he recovers

         7.    surrender value of any life insurance policy

         8.    value of any funeral plan contract

         9.    amount of any ex-gratia payment made in consequence of imprisonment or
               internment by the Japanese during the second World War

         10.   amount of any trust payment made to a claimant or claimant’s partner due to
               suffering from variant Creutzfeldt-Jakob disease (see DMG Chapter 84)

         11.   amount of any compensation payment due to being a slave labourer, suffering
               property loss or personal injury or the loss of a child during second World War

         12.   any payment made under the Macfarlane Trust, the Macfarlane (Special
               Payments) Trust, the Macfarlane (Special Payments) (No. 2) Trust, the Fund,
               the Eileen trust, MFET Limited or the Independent Living Funds, the Skipton
               Fund or the London Bombings Relief Charitable Fund (see DMG Chapter 84)

         13.   the amount of any payment made in consequence of personal injury to the
               claimant or partner

         14.   amounts paid under an insurance policy in respect of loss or damage to the
               property occupied as the home or personal possessions

         15.   amounts paid or deposited in the claimant’s name for the purpose of
               purchasing a home or making repairs to the property occupied as the home

         16.   any amount paid by way of arrears of benefit, by way of compensation for late
               payment of benefit, in lieu of payment of benefit or by the Northern Ireland
               Housing Executive out of money provided by the Supporting People scheme
               under certain legislation



Volume 14 Amendment 22                                                          September 2010
Decision Makers Guide                                     Other types of income fully disregarded



         17.   any banking charge or commission payable in converting capital into sterling

         18.   value of the right to receive income from an occupational or personal pension
               scheme

         19.   value of the right to receive income under a retirement annuity contract.
                                                             1 SPC Regs (NI), reg 17(8)(a), Sch 5, Part I
                                                                      2 SPC Regs (NI), Sch 5, para 1A

         85371 - 85399




Volume 14 Amendment 22                                                             September 2010
Decision Makers Guide                                                                    Deprivation of income



         85427 - 85429

         Service users
85430    People who participate in a service user group are often called “service users”. A
                                      1
         service user group means any group of individuals that is consulted under certain
         legislation by or on behalf of
                                  2
         1.    a public authority
                            3
         2.    a council
                                               4
         3.    a patient and client council
                                                                   5
         4.    a relevant Health body of Northern Ireland
                                                                                                      6
         5.    the Commission or the Office of the Health Professions Adjudicator

         6.    any other public authority in Northern Ireland in consequence of a function
               conferred under any statutory provision

         for the purposes of monitoring and advising on the policies affecting and services
         provided to users or potential users of those services.

         Note : A public authority includes any person whose functions include functions of a
                        7
         public nature .
                                          1 SPC Regs (NI), reg 1(2); 2 Disability Discrimination Act 1995, sec 49A;
                                                             3 Local Government (Best Value) Act (NI) 2002, sec 1;
                                            4 Health and Social Care (Reform) Act (NI) 2009, sec 16; 5 sec 17 - 19;
                                             6 Health and Social Care Act 2008, sec 108; 7 SPC Regs (NI), reg 1(2)

         Example

         The Northern Ireland Social Care Council is required under legislation to promote
         high standards in the training of social care workers. It does this through inspection
         and regulation. Roger has had the help of a social worker in the past. Roger and
         other individuals have been invited to attend a training programme for social workers
         as visitors to monitor and advise on the training policies of the Northern Ireland
         Social Care Council from the perspective of people who have used social work
         services. The decision maker determines that Roger is a service user.

85431    Where the claimant

         1.    is a participant in a service user group and

         2.    has possibly deprived their self of an income arising from their participation in
               the service user group
                                                                                                  1
         the decision maker cannot treat the claimant as possessing that income .
                                                                                      1 SPC Regs (NI), reg 18(7A)




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Decision Makers Guide                                                     Deprivation of income



         Example

         Andrew is in receipt of State Pension Credit. He attends his local hospital as an out-
         patient on a regular basis. Andrew has volunteered to take part in a Patients’ Forum
         which discusses the services and care provided by the hospital.               As an
         acknowledgement for attending the Patients’ Forum the local Health Trust pay
         Andrew £40 each time he attends. Andrew gives this payment away to his daughter
         because he does not want this to be taken into account when calculating his
         entitlement to State Pension Credit.       The decision maker decides that the
         deprivation rule in DMG 85408 does not apply to Andrew and so there is no notional
         income to take into account.

         85432 - 85439




Volume 14 Amendment 22                                                        September 2010
Decision Makers Guide                           Retirement pension income available on application




         Deferring Retirement Pension whilst an overlapping
         benefit is in payment
85445    Where a claimant to whom DMG 85441 applies is in receipt of an overlapping
         benefit or allowance - the amount of Retirement Pension income he shall be treated
                   1
         as having is the Retirement Pension he is entitled to minus the amount of the
         benefit or allowance in payment.
                                                                          1 SPC Regs (NI), reg 18(1CA)


85446    Where a claimant to whom DMG 85441 applies is in receipt of an overlapping
         benefit or allowance - which would result in an adjustment to be made to the amount
         of Retirement Pension payable - he shall be treated as having the Retirement
         Pension income minus the adjustment which would be made to it.
                                                                          1 SPC Regs (NI), reg 18(1CB)


         Example

         Jack is a State Pension Credit claimant. He is 67 and has been deferring his
         Retirement Pension for two years.

         Jack receives £46.95 a week Carer’s Allowance that is taken fully into account.

         The decision maker receives evidence that Jack would be entitled to £80 a week
         Retirement Pension if he claimed it and opted to take a lump sum payment for the
         period he has deferred.

         The decision maker decided to treat Jack as having notional Retirement Pension
         income of £33.05 a week (£80 Retirement Pension less £46.95 Carer’s Allowance).

         85447 - 85452


         Occupational pension schemes - notional income
85453    A claimant who has reached the qualifying age for State Pension Credit and has
         entitlement to an occupational pension but who has elected to defer payment should
         be treated as possessing the amount of occupational pension he could expect to
                                   1
         receive if he applied for it , but only from the date it could be expected to be acquired
         if a claim was made.

         Note : See DMG 85455 et seq. where a claimant fails to secure money purchase
         benefits under an occupation pension scheme.
                                                                           1 SPC Regs (NI), reg 18(1D)




Volume 14 Amendment 22                                                            September 2010
Decision Makers Guide                                 Retirement pension income available on application



         Example

         Asif belongs to an occupational pension scheme.                      The retirement age for the
         scheme is 60. However, it is possible to defer drawing the pension for four years
         after this age in return for receiving a larger income. It is also possible to apply for
         the occupational pension from the age of 55 but payments would be made at a
         reduced rate.

         Asif decides to take his payments at the age of 60. The decision maker decides that
         Asif has not deferred payment of his occupational pension because he has taken the
         pension at the retirement age for the scheme.


         Personal pensions

         General
                                                                                                                1
85454    A personal pension is a fund that provides an income on retirement for employees
                                2
         or the self-employed . This may be done by

         1.    buying an annuity or

         2.    taking an income from the pension fund.

         Taking an income from the pension fund allows the purchase of an annuity to be
         delayed up to the age of 75.              The amount of income paid from the fund is
         recalculated every three years. At the age of 75 an annuity must be purchased.
                  1 Pension Schemes (NI) Act 93, sec 1; 2 Income and Corporation Taxes Act 88, Part XIV, chapter IV



         Personal pensions / occupational pensions where income
         withdrawal is allowed - notional income

85455    Treat a person who has reached qualifying age for State Pension Credit (see DMG
         77032) who

         1.    is entitled to money purchase benefits under a personal pension or
                occupational pension scheme that allows income withdrawal and

         2.    has not bought an annuity and

               2.1      has deferred taking all or part of the income from the fund or

               2.2      has failed to do everything necessary to get all or part of the income
                        from the fund that would be payable if he applied for it

                                          1
         as having a notional income .
                                                                               1 SPC Regs (NI), reg 18(2)(a)(i)&(ii)




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Decision Makers Guide                         Retirement pension income available on application


         Amount of notional income

85456    The amount of the notional income is the maximum amount of income that may be
                                1
         withdrawn from the fund (see DMG 85465 et seq).
                                                                          1 SPC Regs (NI), reg 18(3)



         From what date should the decision maker take notional income
         into account

85457    Take notional income into account from the date that the person could expect to get
                                               1
         the income if an application was made . To calculate this date

         1.    assume that an application was made on the date that there is sufficient
                evidence to show that a notional income should be calculated and

         2.    add the estimated time it would take the pension fund holder to process an
                application for the maximum amount of income.
                                                                          1 SPC Regs (NI), reg 18(2)

         Example

         Bernard receives State Pension Credit. He is 61.

         On 1 November the decision maker receives evidence that Bernard is entitled to a
         personal pension but has not bought an annuity or drawn an income.

         The pension fund holder states that Bernard’s scheme can provide an income. In
         Bernard’s case the maximum amount of income, based on the Government’s tables,
         is £23 a week.

         Once an application is made it would take the pension fund holder six weeks to
         arrange for the maximum income to be paid.

         The decision maker decides that Bernard should be treated as having a notional
         income of £23 a week from 13 December.


         Personal pensions / occupational pensions where income
         withdrawal is not allowed – notional income

85458    Treat a person who has reached qualifying age for State Pension Credit (see DMG
         77032) who

         1.    is entitled to money purchase benefits under a personal pension or
                occupational pension scheme that does not allow income withdrawal or

         2.    has a retirement annuity contract




Volume 14 Amendment 22                                                         September 2010
Decision Makers Guide                           Retirement pension income available on application


                                                                            1
         and has not bought an annuity, as having a notional income .
                                                                      1 SPC Regs (NI), reg 18(2)(a)(iii) & (b)



         Amount of notional income

85459    The amount of notional income is the amount that a person could have received
         without buying an annuity, if the pension funds or retirement annuity contract were
                                                                1
         held in a scheme that did allow income withdrawal (see DMG 85465 et seq).
                                                                                  1 SPC Regs (NI), reg 18(4)



         From what date should the decision maker take notional income
         into account

85460    Take notional income into account from the date that a person could expect to get
                                                    1
         the income if an application was possible . To calculate this date

         1.    assume that an application could be made on the date that there is sufficient
                evidence to show that a notional income should be calculated and

         2.    add the estimated time it would take a typical pension fund holder who did
                provide an income from a fund, to process an application for the maximum
                amount of income.
                                                                                  1 SPC Regs (NI), reg 18(2)


         Example

         Fiona is a State Pension Credit claimant. She is 61. On 1 November the decision
         maker receives evidence that Fiona has a retirement annuity contract.

         The pension fund holder provides evidence, based on the Government tables, that
         Fiona would receive £30 a week if the fund was invested in a pension fund that paid
         an income.

         The decision maker estimates that it would take six weeks for a typical pension fund
         holder to arrange for the maximum income to be paid from a fund.

         The decision maker decides that Fiona should be treated as having a notional
         income of £30 a week from 13 December.


         Meaning of money purchase benefits
                                                        1
85461    The term money purchase benefits means where pension benefits are determined
         by the amount of the payment or payments made by or on behalf of the member of
         the pension scheme rather than average salary benefits.
                                          1 SPC Regs (NI), reg 18(5); Pension Schemes (NI) Act 93, sec 176(1)



Volume 14 Amendment 22                                                                  September 2010
Decision Makers Guide                           Retirement pension income available on application


         What is a pension fund holder?
85462    A pension fund holder, with respect to an occupational pension scheme, personal
                                                                 1
         pension scheme or retirement annuity contract means

         1.      trustees or

         2.      managers or

         3.      administrators

         of the scheme or contract concerned.
                                                                              1 SPC Regs (NI), reg 1(2)



         Who is a person who derives entitlement?
85463    The term person who derives entitlement is used to describe people who may be
         paid a pension at the discretion of the pension fund holder.            When the original
         pensioner dies the pension fund holder has discretion to decide what to do with the
         fund.

85464    People such as widows or widowers of the person who bought the pension, will only
         have entitlement to payments at the discretion of the pension fund holder.


         Information and evidence
85465    Pension fund holders must provide the decision maker with information about

         1.      the maximum amount of income available from the pension fund and

         2.      the amount of income that would be available if the funds were held in a
                 scheme that produces an income.

                                                                             1
85466    This information is based on tables prepared by the Government . Decision makers
         should consider evidence from pension fund holders when deciding the amount of
         notional income. Do not make a decision until the pension fund holder has been
         given sufficient time to provide evidence.
                                                                         1 SS (C&P) Regs (NI), reg 7(6)


85467    Decision makers should consider the evidence of the pension fund holder but are
         not bound to accept it. Consider all the evidence on the amount of notional income
         before making a decision. The decision should be based on the most convincing
         evidence available.




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         Lump sums on retirement
85468    At the point that

         1.    an annuity is bought or

         2.    an income is taken

         from the personal pension fund, a lump sum of up to 25% of the fund may be taken.
         Treat this payment as capital.

         85469 - 85475


         Actual income
85476    Take into account in full in the normal way, any income that is

         1.    paid under an annuity bought with funds from

               1.1      a personal or occupational pension scheme or

               1.2      a retirement annuity contract or

         2.    withdrawn from a personal or occupational pension scheme.


         Provision under a retirement annuity contract
85477    Before 1.7.88 people could buy retirement annuity contracts. People with these
         pensions are entitled to buy an annuity at any time between the ages of 60 and 75.
         They are not allowed to take an income from the fund before an annuity is
         purchased.

         Note : DMG 85141 explains what a retirement annuity contract is.


         Retirement annuity contract - notional income
85478    If a claimant who has reached qualifying age for State Pension Credit (see DMG
         77032) fails to purchase an annuity with the funds available under his retirement
                                                                                 1
         annuity contract notional income should be taken into account .                DMG 85459
         explains how much income should be taken into account.
                                                                           1 SPC Regs (NI), reg 18(2)(b)

         85479 - 85499




Volume 14 Amendment 22                                                               September 2010
Decision Makers Guide                                                                            Introduction




         Arrears of earnings
86023    Where the claimant receives payments of arrears of earnings, then the decision
         maker should take the earnings into account by superseding the award of State
         Pension Credit. The superseding decision must take effect on the first day of the
         benefit week in which the claimant receives the arrears (or if that is nor practicable
                                                                  1
         on the first day of the next following benefit week) .
                                                                      1 SS & CS (D&A) Regs (NI), Sch 2B, para 2


86024    The weekly amount of the arrears should be calculated by reference to the period
                                 1
         that the arrears covers . This means that if the arrears period is one month then the
         weekly amount of the payment should be determined in accordance with DMG
         85033, if it is three months then in accordance with DMG 85034 and so on. The
         arrears amount is taken into account along with the regular earnings.
                                                                                     1 SPC Regs (NI), reg 17(1)


         Example

         Mary receives earnings of £25 per week. At the beginning of June Mary tells the
         decision maker her earnings have increased to £30 per week and she has received
         5 weeks arrears amounting to £25 for the period 4.5.09 to 5.6.09. The arrears are
         taken into account week commencing 8.6.09 when they are received. The decision
         maker takes a weekly amount of £5 into account for the 5 week period 8.6.09 to
         12.7.09. (£25 x 7 ÷ 35 see DMG 85036) along with the new regular amount of £30.
         From week commencing 13.7.09 Mary receives her new regular weekly wage of £30
         so the decision maker supersedes the award of State Pension Credit to take this
         amount into account instead of £35.


         Part-week payments
86025    Part-week payments of State Pension Credit may only be made in certain
         circumstances (see DMG Chapter 79). Any income (including earnings) is ignored
                                                                      1
         for the purposes of calculating a part-week payment .
                                                                                    1 SPC Regs (NI), reg 13A(2)


86026    Payments of State Pension Credit for periods of less than a full week may also be
                                                         1
         appropriate in certain other circumstances (see DMG Chapter 79). These should
         not be confused with part-week payments described at DMG 86024.                           Where a
         payment of State Pension Credit is appropriate in the circumstances described at
                                                              2
         DMG 79106, the normal income rules will apply (see DMG 86011).
                                           1 SS (D&A) Regs (NI), Sch 2B, para 4(b); 2 SPC Regs (NI), reg 17(1)




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Decision Makers Guide                                 Earnings of employed earners - explanation of terms




         Earnings of employed earners - explanation
         of terms

         Meaning of employed earner
                                                  1
86030    The term employed earner means a person who is gainfully employed in NI or the
         Republic of Ireland

         1.    under a contract of service or

         2.    in an office (including any elective office) where payments are taxable under
               Schedule E (Pay As You Earn) or a similar system in the Republic of Ireland
                                                                                 1 SPC Regs (NI), reg 17A(6)


86031    Employed earners who are gainfully employed under a contract of service include
         employees who work for a wage or salary.

86032    The phrase in an office includes directors of limited companies, clergy, district
         councillors, Members of Parliament and sub-postmasters and mistresses.


         Meaning of earnings
                                                                                            1
86033    Earnings means any pay or profit derived from employment and includes
                                      2
         1.    bonus or commission (see DMG 86059)
                                                         3
         2.    Payment In Lieu Of Remuneration (see DMG 86090 and 86153)
                                              4
         3.    Payment In Lieu Of Notice (see DMG 86156)
                              5
         4.    holiday pay (see DMG 86160)
                          6
         5.    retainers (see DMG 86091)

         6.    payment made by the employer for expenses which are not wholly exclusively
               and necessarily incurred in the performance of the duties of the employment,
               including any payment made by the employer for
                                                                                             7
               6.1      the employee's travelling expenses between home and work (but see
                        DMG 86081 for councillors) or

               6.2      any expenses that the employee may have for the care of a family
                                                                     8
                        member while the employee is at work (see DMG 86085)

         7.    any payment made by a non-cash voucher that has been taken into account
               as earnings for the purposes of working out the amount of social security
                                          9
               contributions to deduct (see DMG 86101)



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Decision Makers Guide                                      Earnings of employed earners - explanation of terms


                                                                              10
          8.      statutory sick pay and statutory maternity pay
                                               11
          9.      statutory paternity pay
                                               12
          10.     statutory adoption pay
                                                            13
          11.      employers sick or maternity pay

          This list is not exhaustive. See DMG 86050 - 86102 for more examples of what are
          and what are not earnings.
    1 SPC Regs (NI), reg 17A(2); 2 reg 17A(2)(a); 3 reg 17A(2)(b); 4 reg 17A(2)(c); 5 reg 17A(2)(d); 6 reg 17A(2)(e);
                           7 reg 17A(2)(f)(i); 8 reg 17A(2)(f)(ii); 9 reg 17A(2)(g); 10 reg 17A(2)(h); 11 reg 17A(2)(i);
                                                                            12 reg 17A(2)(j); 13 reg 17A(2)(k)(i) and (ii)

                                         1
86034     Earnings do not include

          1.      payments in kind (see DMG 86088 - 86089)

          2.      payments by an employer for expenses wholly, exclusively and necessarily
                                                                                   2
                  incurred in the performance of the employment
                                                                 3
          3.      payments of occupational pension

          4.      any lump sum payments received under the Iron and Steel Re-adaption
                                         4
                  Benefits Scheme

          5.      any payment of compensation made by an Employment Tribunal because of
                                                                         5
                  unfair dismissal or unlawful discrimination .
                      1 SPC Regs (NI), reg 17A(3); 2 reg 17A(3)(b); 3 reg 17A(3)(c); 4 reg 17A(3)(d); 5 reg 17A(3)(e)



          Meaning of derived from
                                                                                   1
86035     The words “derived from” mean having their origins in . Payments made for past or
          present employment should be treated as earnings, unless they are excluded under
          DMG 86034.
                                                                                                           1 R(SB) 21/86



          Meaning of gross earnings
86036     Gross earnings means the amount of earnings

          1.      after the deduction of expenses wholly, exclusively and necessarily incurred in
                                                                     1
                  the performance of the employment but

          2.      before any authorised deductions are made by the employer. These may
                  include

                  2.1      income tax

                  2.2      pension contributions

                  2.3      social security contributions (sometimes called NI contributions)


Volume 14 Amendment 22                                                                              September 2010
Decision Makers Guide                          Earnings of employed earners - explanation of terms



               2.4      trade union subscriptions

               2.5      payments under a court order

               2.6      recovery of any debt

         Note : Where an overpayment of wages is being recovered by means of deductions
         from the earnings to be taken into account, the decision maker should not include
         the amount being recovered to repay the overpayment as part of the gross amount
                            2
         of those earnings .
                                                                         1 R(IS) 16/93; 2 R(TC) 02/03




Volume 14 Amendment 22                                                           September 2010

								
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