Circular SWSG13/93 - Community Care: National Assistance (Assessment of Resources) (Amendment) Regulations 1993, Guidance on Charging - Amendment 1

SECTION 9 - EARNINGS

What are earnings?

General

9.001 Earnings consist of any remuneration or profit derived from employment. This will include such things as:

• bonus or commission

• payments in lieu of notice

• holiday pay except any payable more than four weeks after the termination or interruption of employment

• any payment by way of a retainer

• any payment made by the person’s employer in respect of any expenses not wholly, exclusively and necessarily incurred in the performance of the duties of employment eg travelling expenses incurred by the employee between his home and the place of employment.

Regs 10 and 13

9.002 Earnings do not include

• any payment in kind

• any payment made by an employer for expenses wholly, exclusively and necessarily incurred in the performance of the duties of the employment

• any occupational pension

Gross earnings

9.003 "Gross earnings" means the amount of earnings before any deductions are made, for example tax, National Insurance contributions, pension contributions and trade union subscriptions.

Net earnings of employed earners

9.004 To calculate the amount of earnings to be considered in the assessment, deduct from the gross earnings:

• the amount of income tax the resident pays or is liable to pay, or which is deducted by the employer

• the amount of the deductions made by the employer in respect of Class 1 National Insurance contributions

• half of any sum paid to an occupational or personal pension scheme which is:

Reg 14

The resident pays the standard charge of £250 less the £15 disregard for 5 weeks (ie he pays £235 which is £115 more than he was paying).

At the end of 5 weeks he has used up £575 (5 x £115) and has been allowed to keep £75 (5 x £15).

He therefore has £100 of the £750 left to be taken into account in week 6, less the £15 disregard.

Disregards

9.018 The amount of earnings to be taken into account in the assessment is the net amount calculated in accordance with paragraphs 9.001 to 9.016 above, less the appropriate disregard.

9.019 Disregard £5 of the net weekly earnings unless the resident qualifies for a different disregard under paragraph 9.019 to 9.022 or a discretionary disregard under paragraph 2.004.

Schedule 2 para 4

People entitled to a £15 disregard

9.020 Disregard £15 of the net weekly earnings if the resident:

a) receives Income Support which includes a disability premium or a carer’s premium

or

b) is under 60 and

(i) receives one of the following benefits:

• Disability Living Allowance (mobility or care components at any rate)

• Disability Working Allowance

• Mobility Supplement

• Invalidity Pension

• Severe Disablement Allowance

•Invalid Care Allowance

or

(ii) has an invalid carriage or other vehicle provided under:

• Section 46 the National Health Service (Scotland) Act 1978; or

• in England and Wales, under Section 5(2)(a) National Health Service Act 1977

or

(iii) receives a grant under:

• Section 46 of the National Health Service (Scotland) Act 1978; or

• in England and Wales, under paragraph 2 of Schedule 2 of the National Service Act 1977

or

(iv) is registered blind in a register maintained by or on behalf of, a regional or islands council

or

(v) has produced medical evidence of incapacity in support of a claim for:

• sickness benefit; or

• invalidity pension, or

• severe disablement allowance

• for a continuous period of not less than 28 weeks

or

(vi) has ceased receiving Attendance Allowance or Disability Living Allowance solely because he has been in residential accommodation for more than 4 weeks.

or

(c) is over 60; and

• satisfied one of conditions in b) above before reaching 60; and

• has worked continuously since reaching the age of 60

or

(d) is a lone parent.

Schedule 2 para 3

People who have ceased or interrupted employment

9.021 In the case of a resident who has been employed as an employed earner and whose employment has ended or been interrupted, any earnings paid, or due to be paid in respect of that employment shall be fully disregarded.

Schedule 2 para 1