Calculation of net earnings of employed earners
29.—(1) For the purposes of regulation 22 (average weekly earnings of employed earners), the earnings of a claimant derived or likely to be derived from employment as an employed earner to be taken into account shall, subject to paragraph (2), be his net earnings.
(2) There shall be disregarded from a claimant’s net earnings, any sum, where applicable, specified in paragraphs 1 to 11 of Schedule 3.
(3) For the purposes of paragraph (1) net earnings shall, except where paragraph (4) applies, be calculated by taking into account the gross earnings of the claimant from that employment over the assessment period, less–
(a)any amount deducted from those earnings by way of–
(i)income tax;
(ii)primary Class 1 contributions under the Social Security Act(1); and
(b)one-half of any sum paid by the claimant by way of a contribution towards an occupational or personal pension scheme.
(4) Where the earnings of a claimant are estimated under paragraph (2) of regulation 22 (average weekly earnings of employed earners), his net earnings shall be calculated by taking into account those earnings over the assessment period, less–
(a)an amount in respect of income tax equivalent to an amount calculated by applying to those earnings the basic rate of tax in the year of assessment in which the claim was made less only the personal relief to which the claimant is entitled under sections 8(1) and (2) and 14(1)(a) and (2) of the Income and Corporation Taxes Act 1970 (personal relief)(2) as is appropriate to his circumstances but, if the assessment period is less than a year, the amount of the personal relief deductible under this sub-paragraph shall be calculated on a pro-rata basis;
(b)an amount in respect of primary Class 1 contributions payable under the Social Security Act in respect of those earnings; and
(c)one-half of any sum payable by the claimant by way of a contribution towards an occupational or personal pensions scheme.
See sections 1(2) and 4 of the Social Security Act 1975 (c. 14): section 4 was amended by the Social Security Pensions Act 1975 (c. 60), Schedule 4 paragraph 36(a), the Education (School-Leaving Dates) Act 1976 (c. 5), Section 2(4), the Social Security Act 1979 (c. 18), section 14(1), the Social Security and Housing Benefits Act 1982 (c. 24), Schedule 5, the Social Security Act 1985 (c. 53), sections 7(1) and (2) and 8(1) and the Social Security Act 1986 (c. 50), section 74(1)(a) and (2) and Schedule 10, paragraph 104, article 2 of S.I. 1986/25 and article 2 of S.I. 1987/46.
1970 c. 10; section 8(1) was amended by the Finance Act 1971 (c. 68) section 37 Schedule 6 paragraphs 1 and 5, and the Finance Act 1985 (c. 54) section 36, sub-section (1A) was added by the Finance (No. 2) Act 1975 (c. 45) section 31 and amended by the Finance Act 1977 (c. 36) section 22 and the Finance Act 1985 section 36. Sub-section (1B) was added by the Finance (No. 2) Act 1975 section 31 and amended by the Finance Act 1985 section 36. Section 8(2) was amended by the Finance Act 1971 Section 37 Schedule 6 paragraphs 1 and 5 and article 2 of S.I. 1985/430; sub-paragraph (b) was substituted by the Finance (No. 2) Act 1979 (c. 47) section 12 Schedule 2 paragraph 1; sub-paragraph (b)(i) and (ii) was amended by the Finance Act 1981 (c. 35) section 139 Schedule 19 Part VI and the Finance Act 1982 (c. 39) section 157 Schedule 22 Part IV; sub-paragraph (b)(iii) was added by the Finance Act 1981 (c. 35) section 27 and sub-paragraph (b)(iv) by the Finance Act 1987 (c. 16) section 27. Section 14(1) was amended by the Finance Act 1970 (c. 24) section 14 Schedule 8 Part VI; section 14(2) was amended by the Finance Act 1976 (c. 40) section 36, the Finance (No. 2) Act 1979 (c. 47) section 11 Schedule 1 section 24 paragraph 2 and the Finance Act 1980 (c. 48) section 24.