The Family Credit (General) Regulations 1987

CHAPTER IIU.K.NORMAL WEEKLY INCOME

Calculation of income on a weekly basisU.K.

13.—(1) For the purposes of section 20(5) of the Act (conditions of entitlement to [F1working families' tax credit]), the income of a claimant shall be calculated on a weekly basis—

(a)by ascertaining in accordance with this Chapter and Chapter V of this Part (other income) the amount of his normal weekly income; F2...

(b)by adding to that amount the weekly income calculated under regulation 36 (calculation of tariff income from capital); F3...

F4(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F5(1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F6(2) For the purposes of paragraph (1) “income” includes capital treated as income under regulation 25 (capital treated as income) and income which a claimant is treated as possessing under regulation 26 (notional income).]

Treatment of child care chargesU.K.

F713A.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F8Normal weekly earnings of employed earnersU.K.

14.—(1) Where a claimant’s income consists of earnings from employment as an employed earner, [F9except where those earnings arise from employment as a director,] his normal weekly earnings from that employment shall, subject to [F10paragraphs (3) to (6C)], be determined [F11by taking account of his earnings from that employment which are received in the assessment period relevant to his case, whether the amount so received was earned in respect of that period or not, and in accordance with the following provisions of this regulation.]

(2) A claimant’s assessment period, subject to [F12paragraphs (2A) to (6C)] , shall be, in respect of a claimant whose pay period is—

(a)[F13a week—

(i)except where head (ii) applies, a period of 6 consecutive weeks immediately preceding the week of claim; or

(ii)where the [F14appropriate officer] has insufficient information for the claimant’s normal weekly earnings to be determined in accordance with head (i), a period of 6 consecutive weeks ending with the week before the week immediately preceding the week of claim;]

(aa)[F15a fortnight—

(i)except where head (ii) applies, a period of three consecutive fortnights immediately preceding the week of claim; or

(ii)where the [F16appropriate officer] has insufficient information for the claimant’s normal weekly earnings to be determined in accordance with head (i), a period of three consecutive fortnights ending with the fortnight before the week immediately preceding the week of claim;]

(b)four weeks or a month, a period of 12 consecutive weeks or, as the case may be, 3 consecutive months, immediately preceding the week of claim;

(c)any period of less than one month (a shorter period), other than one to which sub-paragraph (a) or (b) refers, 6 consecutive shorter periods immediately preceding the week of claim;

(d)any period of more than one month (a longer period), a period of one year ending immediately before the week of claim.

[F17(2A) Where an [F18appropriate officer] considers, on the basis of available evidence, that the claimant has elected to work fewer hours than he would otherwise have worked in the whole or part of the assessment period referred to in paragraph (2) with the result that, but for this paragraph, he would secure entitlement or increased entitlement to [F19working families' tax credit], the adjudication officer may determine the claimant’s normal weekly earnings by [F20taking account of his earnings received] during the period equal to, and ending immediately before, the period determined in accordance with paragraph (2), unless the claimant satisfies him that the reason for reducing his hours of work was otherwise than to secure such an entitlement or increased entitlement.]

(3) Where during a claimant’s assessment period his earnings are reduced because of his involvement in a trade dispute at his place of employment [F21or because of his absence from work by reason of jury service], that assessment period shall be varied in that—

(a)any pay period during which his earnings are so reduced shall be omitted from it; and

(b)subject to sub-paragraph (c), his assessment period shall commence one pay period earlier (the extra period) for each period so omitted;

(c)where any extra period under sub-paragraph (b) is one in which his earnings are reduced because of his involvement in a trade dispute at his place of employment [F21or because of his absence from work by reason of jury service], that extra period shall also be omitted from his assessment period and his assessment period shall commence one pay period earlier, for each extra period so omitted,

but so that his assessment period remains a period equal in length to the assessment period which would otherwise apply in his case under paragraph (2) but as if the words “consecutive” and “immediately” were omitted from that paragraph on each occasion where they appear.

(4) Where a claimant’s earnings, whether during his assessment period or not, include a bonus or commission which is paid within 52 weeks preceding the week of claim and that bonus or commission is paid separately from his other earnings or is paid in respect of a period longer than the pay period relating to the other earnings with which it is paid, his normal weekly earnings shall be treated as including an amount in respect of that bonus or commission calculated in accordance with regulation 20A (calculation of bonus or commission).

(5) Where at the date of claim—

(a)the claimant—

(i)has been in his employment, or

(ii)after a continuous period of interruption exceeding 4 weeks, has resumed his employment, or

(iii)has changed the number of hours for which he is contracted to work; and

(b)the period of his employment or the period since he resumed his employment or the period since the change in the number of hours took place, as the case may be, is less than the assessment period in paragraph (2) appropriate in his case,

his normal weekly earnings shall be determined in accordance with paragraph (6).

(6) In a case to which this paragraph applies, the [F22the Board] shall require the claimant’s employer to furnish him with an estimate of the claimant’s likely earnings for the pay period for which he is or will normally be paid and the claimant’s normal earnings shall be determined by [F23taking account of] that estimate.

[F24(6ZA) Where at the date of claim—

(a)the claimant is a Crown servant posted overseas or a partner of such a Crown servant, and

(b)either or both of them has employment other than as a Crown servant which is carried on in an overseas territory,

the Board shall require either or both of them to furnish either evidence of earnings from that employment or, if that is not available, an estimate of likely earnings from that employment for the pay periods for which they will normally be paid, and normal weekly earnings shall be determined by taking account of that evidence or estimate.]

[F25(6A) Where—

(a)the claimant is entitled at the date of the claim to statutory maternity pay and is or will be receiving extra statutory maternity pay from her employer, and

(b)the next payment from her employer following the date of the claim is a payment which will include statutory maternity pay paid to her for a full pay period at the lower rate only,

the Board shall require the claimant to furnish them with an estimate of her likely earnings and statutory maternity pay to be contained in that payment, and her normal weekly earnings shall be determined by taking account of that estimate.

(6B) Where—

(a)the claimant is entitled at the date of the claim to statutory maternity pay and is or will be receiving extra statutory maternity pay from her employer,

(b)the claim is made during a maternity pay period and at a time when less than half of that maternity pay period has expired, and

(c)in consequence the next payment from her employer following the date of the claim is a payment which will not include statutory maternity pay paid to her for a full pay period at the lower rate only,

the Board shall require the claimant to furnish them with an estimate of her likely earnings and statutory maternity pay to be contained in the first future payment from her employer in which statutory maternity pay will be paid to her at the lower rate only, and her normal weekly earnings shall be determined by taking account of that estimate.

(6C) Where—

(a)the claimant is entitled at the date of the claim to statutory maternity pay and is or will be receiving extra statutory maternity pay from her employer,

(b)the claim is made during a maternity pay period and at a time when more than half of that maternity pay period has expired, and

(c)in consequence the next payment from her employer following the date of the claim is a payment which will not include statutory maternity pay paid to her for a full pay period at the lower rate only,

the Board shall require the claimant to furnish them with details of her earnings and statutory maternity pay contained in the payment from her employer immediately preceding the date of the claim, and her normal weekly earnings shall be determined accordingly.]

(7) For the purposes of this regulation—

(a) the claimant’s earnings shall be calculated in accordance with Chapter III of this Part;

(b)“pay period” means the period in respect of which a claimant is, or expects to be [F26normally] paid by his employer, being a week, a fortnight, four weeks, a month or other shorter or longer period, as the case may be.]

[F27Normal weekly earnings of directorsU.K.

14A.—(1) Subject to paragraph (2) and regulation 17 (periods to be disregarded), where a claimant’s income includes earnings from employment as a director, his normal weekly earnings from that employment shall be determined [F28by taking account of his earnings from that employment received in the year immediately preceding the week of claim, whether the amount so received was earned in respect of that period or not.]

(2) Where at the date of claim the claimant has been in employment as a director for less than a year, his normal weekly earnings from that employment shall be [F29determined by taking account of his earnings from that employment received in the period that he has been in that employment] and by reference to an estimate of the earnings likely to be received in the remainder of the first year of the employment.]

Normal weekly earnings of self-employed earnersU.K.

15.—(1) Subject to regulation 17 (periods to be disregarded), where a claimant's income consists of earnings from employment as a self-employed earner, his normal weekly earnings shall be determined, subject to paragraph (2), by reference to his weekly earnings from that employment—

[F30(a)except where sub-paragraph (aa) or (b) applies, over a period of 6 consecutive complete months up to and including the second last complete month immediately preceding the date of claim; or

(aa)except where sub-paragraph (b) applies, where the claimant provides in respect of the employment a statement of his earnings and expenses for the six consecutive complete months up to and including the last complete month immediately preceding the date of claim, over that period of six months; or]

[F31(b)where the claimant provides in respect of the employment a profit and loss account and, where appropriate, a trading account or a balance sheet or both, and the profit and loss account is in respect of a period of at least 6 months but not exceeding 15 months and that period terminates within the 12 months preceding the date of claim, over that period; or]

(c)over such other period of weeks [F32or months] preceding the week in which [F33the date of claim falls] as may, in any particular case, enable his normal weekly earnings to be determined more accurately.

[F34(1A) in paragraph (1)(b)—

(a)“balance sheet” means a statement of the financial position of the employment disclosing its assets, liabilities and capital at the end of the period in question;

(b)“profit and loss account” means a financial statement showing the net profit or loss of the employment for the period in question; and

(c)“trading account” means a financial statement showing the revenue from sales, the cost of those sales and the gross profit arising during the period in question.]

[F35(2) Subject to regulation 17, in a case where the claimant has been in employment as a self-employed earner for less than 7 complete months, his normal weekly earnings shall be determined over a period of 6 consecutive complete months commencing with the first complete month after the claimant began that employment, and that determination shall be based on either—

(a)where the claimant provides in relation to that employment a statement of his earnings and expenses for the complete months up to and including the last complete month immediately preceding the date of claim, the earnings he received in those months, or

(b)where no such statement is provided, any earnings he received in the period up to and including the second last complete month immediately preceding the date of claim,

together with an estimate of the earnings likely to be received in the balance of the 6 month period.]

(3) For the purposes of this regulation, the claimant's earnings shall be calculated in accordance with Chapter IV of this Part.

[F36(4) In this regulation a “complete month” begins on the first day of the month and ends on the last day of the month.]

Normal weekly income other than earningsU.K.

16.—(1) Subject to [F37paragraphs (2) and (2A)], [F38where a claimant’s normal weekly income does not consist of earnings, or includes income that does not consist of earnings, that income] shall be determined by reference to his weekly income over a period of 26 weeks immediately preceding [F39the week in which the date of claim falls] or over such period immediately preceding that date as may, in any particular case, enable his normal weekly income[F40, except where paragraph (2A) applies,] to be determined more accurately.

(2) Where a claimant's income consists of any payments made by a person, whether under a court order or not, for the maintenance of any member of [F41the claimant’s family], and those payments are made or due to be made at regular intervals, his normal weekly income shall be determined—

(a)if before the date of claim those payments are made at regular intervals [F42and of regular amounts], by reference to the normal weekly amount;

(b)if they are not so made, by reference to the average of such payments received in the 13 weeks immediately preceding the week in which [F43the date of claim falls].

[F44(2A) Where a claimant’s income consists of child support maintenance, his normal weekly income in respect of that maintenance shall be determined—

(a)if before the date of claim those maintenance payments are made at regular intervals [F45and of regular amounts], by reference to the normal weekly amount;

(b)if they are not so made, [F46except in a case to which sub-paragraph (c) applies,] by reference to the average of such payments received in the 13 weeks immediately preceding the week in which the date of claim falls,

[F47(c)where the maintenance assessment has been notified to the claimant under regulation 10 of the Child Support (Maintenance Assessment Procedure) Regulations 1992 during the 13 weeks immediately preceding the week of claim, by reference to the average of such payments, calculated on a weekly basis, received in the interim period,]

and if the resulting sum exceeds the amount of child support maintenance due under the maintenance assessment, the normal weekly income shall be the amount due under the maintenance assessment.]

(3) For the purposes of this regulation, income other than earnings shall be calculated in accordance with Chapter V of this Part.

[F48(4) In this regulation—

(a)“child support maintenance” means such periodical payments as are referred to in section 3(6) of the Child Support Act 1991;

(b)“maintenance assessment” has the same meaning as in the Child Support Act 1991 by virtue of section 54 of that Act.]

[F49(c)“the interim period” means the week in which the date of notification of the maintenance assessment falls and the subsequent period up to and including the week immediately preceding the week of claim.]

Periods to be disregardedU.K.

[F5017.  For the purposes of ascertaining a claimant’s normal weekly earnings there shall be disregarded—

(a)where the claimant is a self-employed earner, any week or period of weeks in his assessment period during which no activities have been carried out for the purposes of the business;

(b)where the claimant is a director, any week or period of weeks in his assessment period during which he has done no work and in respect of which he has received no earnings; and

his normal weekly earnings shall be determined by reference to his earnings in the remainder of that period (the reduced period) and in these Regulations any reference to an assessment period shall in its application to such a case be construed as a reference to that reduced period.]

Calculation of weekly amount of incomeU.K.

18.—(1) [F51For the purposes of regulation 14 (normal weekly earnings of employed earners) and 16 (normal weekly income other than income other than earnings), where the claimant’s pay period or, as the case may be, the period in respect of which a payment is made—]

(a)does not exceed a week, the weekly amount shall be the amount of that payment;

(b)exceeds a week, the weekly amount shall be determined—

(i)in a case where that period is a month, by multiplying the amount of the payment by 12 and dividing the product by 52;

(ii)in a case where that period is 3 months, by multiplying the amount of the payment by 4 and dividing the product by 52;

(iii)in a case where that period is a year, by dividing the amount of the payment by 52;

(iv)in any other case, by multiplying the amount of the payment by 7 and dividing the product by the number equal to the number of days in the period in respect of which it is made.

[F52(2) For the purposes of regulation 15 (normal weekly earnings of self-employed earners) the weekly amount of earnings of a claimant shall be determined—

(a)[F53except where sub-paragraph (b) applies, by multiplying by 7 his earnings

(i)received in the assessment period, or

(ii)estimated for the assessment period, or

(iii)both received in and estimated for that period,

as the ease may be, and dividing the product by the number equal to the number of days in that period;]

(b)in a case where regulation 15(1)(b) applies, by multiplying his earnings relevant to the assessment period (whether or not received in that period) by 7 and dividing the product by the number equal to the number of days in that period.]

[F54(3) For the purposes of regulation 14A (normal weekly earnings of directors) the weekly amount of earnings of a claimant shall be determined by dividing his earnings—

(i)received in the assessment period, or

(ii)estimated for the assessment period, or

(iii)both received in and estimated for that period,

as the case may be, by the number equal to the number of weeks in that period.]