Citation and commencement

1. These Regulations may be cited as the Social Security Benefit (Computation of Earnings) (Amendment) Regulations 2016 and come into force on 6th April 2016.

Amendments to the Social Security Benefit (Computation of Earnings) Regulations 1996

2. —(1)The Social Security Benefit (Computation of Earnings) Regulations 1996( 3 ) are amended as follows.

(2) In regulation 2(1) (interpretation)—

(a) omit the definition of “lower rate”;

(b) at the appropriate places insert—

“ “basic rate” means the rate of income tax of that name determined in pursuance of section 6(2) of the Income Tax Act 2007 ( 4 ) ; ” ;

“ “Scottish basic rate” means the rate of income tax of that name calculated in accordance with section 6A of the Income Tax Act 2007 ( 5 ) ; ” ; and

“ “Scottish taxpayer” has the same meaning as in Chapter 2 of Part 4A of the Scotland Act 1998 ( 6 ) ; ” .

(3) In regulation 4 (notional earnings)—

(a) omit paragraph (2);

(b) in paragraph (3) omit “or (2)”; and

(c) in paragraph (3)(a)—

(i) for “lower rate or, as the case may be, the lower rate and the basic rate” substitute “basic rate, or in the case of a Scottish taxpayer, the Scottish basic rate,”;

(ii) for “personal relief to which the claimant is entitled under sections 257(1), 257A(1) and 259 of the Income and Corporation Taxes Act 1988 (personal reliefs) as is” substitute “personal reliefs to which the claimant is entitled under Chapters 2, 3 and 3A of Part 3 of the Income Tax Act 2007( 7 ) as are”;

(iii) for “lower rate” in the third place it appears substitute “basic rate, or the Scottish basic rate,”; and

(iv) for “relief” in the second place it appears substitute “reliefs”.

(4) In regulation 14(1) (deduction of tax and contributions for self-employed earners)—

(a) for the words from “lower rate” the first time it appears to “as is” substitute “basic rate, or in the case of a Scottish taxpayer, the Scottish basic rate, of tax less only the personal reliefs to which the claimant is entitled under Chapters 2, 3 and 3A of Part 3 of the Income Tax Act 2007 as are”;

(b) for “lower rate” in the third place it appears substitute “basic rate, or the Scottish basic rate,”; and

(c) for “relief” in the second place it appears substitute “reliefs”.

(5) In paragraph 6 of Schedule 1 (sums to be disregarded in the calculation of earnings) for “or, as the case may be,” substitute “, section 81 of the Social Services and Well-being (Wales) Act 2014( 8 ), or”.