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HMRC internal manual

Tax Credits Manual

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Eligibility - income (other than earnings): Income - miscellaneous (Info)

Miscellaneous income means any income that doesn’t fall within any other subject in this section and is taxable under Part 5 of ITTOIA 2005. This applies, for example, to copyright royalties received by individuals whose activities don’t amount to a profession (use Inspector Manual (IM) at IM2690).

In addition, the following are included as income for tax credits purposes by virtue of the Tax Credits (Definition and Calculation of Income) Amendment Regulations 2016/978.

Northern Ireland supplementary payments

The following Northern Ireland supplementary payments are to be included in the calculation of income:

  • A payment as a result of the loss of contributory employment and support allowance paid under Part 3 the Welfare Supplementary Payments Regulations (Northern Ireland) 2016/178)
  • A payment as a result of the loss of Carer’s Allowance on a caree’s transition from Disability Living Allowance to Personal Independence Payment and paid under Part 2 of the Welfare Supplementary Payment (Loss of Carer Payments) Regulations (Northern Ireland) 2016/253.

General disregards in the calculation of income

When calculating income, the following payments can be wholly disregarded

Certain Northern Ireland supplementary payments
New deal 50 plus
Certain payments under employment legislation
Mandatory top up payments under Voluntary Sector and Environmental Task Force Options of New Deal and under New Deal 25+
Certain DWP / DSD payments
Educational Maintenance Allowance (EMA)
Training premium, discretionary payment and subsistence allowance payable in respect of Employment Zone participation
Qualifying maintenance payments
Fostering / Residence order allowance
Maintenance received
NHS travelling expenses
Assisted prison visits
Adoption allowance
Payments from a local authority in place of community care services
Vouchers paid to former asylum seekers
Provident benefits from trade unions
Supporting people
Career development loans
Payments to a juror or witness for attendance at court
Payments made under a credit insurance policy
Sports awards

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{#CertainNorthernIrelandsupplementarypayments}Certain Northern Ireland supplementary payments

Disregard the following supplementary payments

  • A payment following the loss of benefit under Article 101 of the Welfare Reform (Northern Ireland) Order 2015 (‘benefit cap’) and paid under Part 2 of the Welfare Supplementary Payments Regulations (Northern Ireland) 2016/178
  • A payment following the loss of Disability Living Allowance on the transition to Personal Independence Payment and paid under the Welfare Payment (Loss of Disability Living Allowance) Regulations (Northern Ireland) 2016/250
  • A payment as a result of the loss of Disability Living Allowance on the transition to Personal Independence Payment in respect of conflict-related cases and paid under Part 4 of the Welfare Payment (Loss of Disability Living Allowance) Regulations (Northern Ireland) 2016/250
  • A payment following the loss of disability-related premium on the transition from Disability Living Allowance to Personal Independence Payment and paid under Part 2 of the Welfare Supplementary Payment (Loss of Disability-Related Premiums) Regulations (Northern Ireland) 2016/254 – Income Support claimants
  • A payment following the loss of disability-related premium on transition from Disability Living Allowance to Personal Independence Payment and paid under Part 3 of the Welfare Supplementary Payment (Loss of Disability-Related Premiums) Regulations (Northern Ireland) 2016/254 – Jobseeker’s Allowance claimants
  • A payment following the loss of a disability-related premium on transition from Disability Living Allowance to Personal Independence Payment and paid under Part 4 of the Welfare Supplementary Payment (Loss of Disability-Related Premiums) Regulations (Northern Ireland) 2016/254 – Employment and Support Allowance claimants
  • A payment following the loss of a disability-related element in respect of Working Tax Credit on the transition from Disability Living Allowance to Personal Independence Payment  and paid under Part 5 of the Welfare Supplementary Payment (Loss of Disability-Related Premiums) Regulations (Northern Ireland) 2016/254 – working tax credit claimants
  • A payment following the loss of a severe disability component in respect of Pension Credit on the transition from Disability Living Allowance to Personal Independence Payment and paid under Part 6 of the Welfare Supplementary Payment (Loss of Disability-Related Premiums) Regulations (Northern Ireland) 2016/254 – State Pension Credit claimants
  • A payment following the loss of Carer Premium on a caree’s transition from Disability Living Allowance to Personal Independence Payment and paid under Part 3 of the Welfare Supplementary Payment (Loss of Carer Payments) Regulations (Northern Ireland) 2016/253 – Jobseeker’s Allowance, Employment and Support Allowance and Income Support claimants
  • A payment following the loss of Income Support on a caree’s transition from Disability Living Allowance to Personal Independence Payment and paid under Part 4 of the Welfare Supplementary Payment (Loss of Carer Payments) Regulations (Northern Ireland) 2016/253
  • A payment following the loss of the Additional Amount (Carer) of State Pension Credit on caree’s transition from Disability Living Allowance to Personal Independence Payment and paid under Part 5 of the Welfare Supplementary Payment (Loss of Carer Payments) Regulations (Northern Ireland) 2016/253.

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New deal 50 plus

Any payment of an employment credit under Section 2(2) of the Employment Act 1988 known as New Deal 50 plus or the corresponding Section 1 of the Employment and Training Act (Northern Ireland) 1950 can be wholly disregarded.

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Certain payments under employment legislation

Any payment

  • under Section 15 of the Disabled Person’s Employment Act 1944(a)
  • under Section 15 of the Disabled Persons (Employment) Act (Northern Ireland) 1945 (b)
    or
  • in accordance with arrangements made under Section 2 of the Employment Act 1988
  • or
  • under Section 1 of the Employment and Training Act (Northern Ireland) 1950 to assist disabled people to obtain or retain employment despite their disability can be wholly disregarded.

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Mandatory top up payments under Voluntary Sector and Environmental Task Force Options of New Deal and under New Deal 25+

An income payment may be disregarded if it is

  • a mandatory top-up grant
    and
  • made
    • under Section 2 of the Employment and Training Act 1973 or Section 1 of the Employment and Training Act (Northern Ireland) 1950
      and
    • in respect of the customer’s participation in an employment programme in the Voluntary Sector or Environmental Task Force Options of the New Deal or in the Intensive Activity Period of the New Deal 25 plus (or, in Northern Ireland, the Preparation for Employment Programme)

A payment may also be disregarded if it’s paid under a written agreement between

  • the Secretary of State (or in Northern Ireland, the Department of Employment and Learning)
    and
  • the person who has arranged their participation in the Intensive Activity Period of the New Deal 25 plus (or in Northern Ireland, the Preparation for Employment Programme)
    This item applies only to the extent that the payment isn’t taxable as a profit of a trade, profession or vocation.

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Certain DWP / DSD payments

Any discretionary payment paid under Section 2 of the Employment Act 1988 or in Northern Ireland Section 1(1) of the Employment and Training Act 1950 to meet, or help to meet special needs in the customer’s participation in the

  • Full-Time Education and Training option of the New Deal specified in Regulation 75 (1)(b)(ii) of the Jobseekers Allowance Regulations 1996
    or
  • equivalent provision in the JSA (Northern Ireland) Regulations.

A payment made by the Department for Work and Pensions under Section 2 of the Employment Act 1988

  • by way of In-Work Credit, Job Grant or Return to Work Credit
    or
  • under the Employment Retention and Advancement Scheme or the Working Neighbourhoods Pilot.

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Educational Maintenance Allowance (EMA)

An Educational Maintenance Allowance is paid by the following to a young person staying on at school or college beyond the date when they could leave education

  • Local Education Authority (LEA)
    or
  • (in Scotland) colleges that are no longer managed by the LEA.

The EMA is for the maintenance of the young person and only made to prevent or relieve financial hardship and should be wholly disregarded.

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Training premium, discretionary payment and subsistence allowance payable in respect of Employment Zone participation

You should wholly disregard any payment made by an Employment Zone contractor paid to the customer for their participation in the Employment Zone programme by way of

  • a training premium
  • a discretionary payment- being a fee, grant, loan or otherwise
    or
  • any arrears of subsistence allowance paid as a lump sum.

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Qualifying maintenance payments

You should disregard an amount of income equal to any qualifying maintenance payment within Section 347B of the Taxes Act 2001

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Fostering / Residence order allowance

Disregard any payment, except to the extent that the allowance is taxable as the profits of a trade, profession or vocation (that is under current tax rules, the ‘reward element’ of fostering allowances), in respect of a child made by

  • a local authority under Section 23 (2) of the Children’s Act 1989 or by Section 21 of the Social Work (Scotland) Act 1968
  • a voluntary organisation under Section 59(1) of the Children Act 1989
  • a care authority under Regulation 9 of the Boarding Out and Fostering of Children (Scotland) Regulation 1985
    or
  • an authority within the meaning of Children (Northern Ireland) Order 1995.

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Maintenance received

Disregard any payment of maintenance, whether under a court order or not, that is made or due to be made by

  • the customer’s former partner, or the customer’s partner’s former partner
    or
  • the parent of a child or qualifying young person where that child or qualifying young person is a member of the customer’s family except where that parent is the customer or the customer’s partner.

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NHS travelling expenses

Disregard any payment in respect of travelling expenses

  • in relation to England and Wales, under Regulation 3, 5 or 8 of the National Health Service (Travelling Expenses and Remission of Charges) Regulations 1988
  • in relation to Scotland, under Regulation 3, 5 or 8 of the National Health Service (Travelling Expenses and Remission of Charges) (Scotland) Regulations 1988
  • in relation to Northern Ireland, under Regulation 3, 5 or 8 of the Travelling Expenses and Remission of Charges Regulations (Northern Ireland) 1989
    or
  • made by the Secretary of State for Health, the Scottish Ministers, the Secretary of State for Wales, or the Department of Health, Personal Social Services and Public Safety and which is analogous to a payment specified in paragraph (a), (b) or (c).

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Assisted prison visits

Disregard any payment made by the Secretary of State or the Scottish Ministers under a scheme established to assist relatives and other persons to visit persons in custody.

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Adoption allowance

Disregard any payment in respect of a child or qualifying young person who is a member of the family made

  • in accordance with regulations made by the Secretary of State under Section 57A of the Adoption Act 1976 or Section 51 of the Adoption (Scotland) Act 1978
  • by a local authority under paragraph 15(1) of Schedule 1 to the Children Act 1989
  • by an authority as defined in Article 2 of the Children (Northern Ireland) Order 1995
  • by a local authority by way of special guardianship support services under Section 14F(1)(b) of the Children Act 1989.

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Payments from a local authority in place of community care services

Disregard any payments received from a LA, which are in place of community care services, for example money to pay for a home help.

For example: Agnes has applied for tax credits. She receives money from her LA so that she can pay someone to be her home help. You

  • establish that the money received from the LA is paid under the correct legislation
    and
  • decide that the money received from the LA should be disregarded.

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Vouchers paid to former asylum seekers

Disregard in full any voucher given under Sections 95 or 98 of the Immigration and Asylum Act 1999 to any former asylum seeker or his dependants.

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Provident benefits from trade unions

Disregard any payment of a provident benefit by a trade union (for example, unemployment pay, marriage and funeral benefits).

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Supporting people

Disregard any payment made under the ‘Supporting People’ programme. In

  • England and Wales, under section 93 of the Local Government Act 2000
  • Scotland, under section 91 of the Housing (Scotland) Act 2001
    or
  • Northern Ireland, under Article 4 of the Housing Support Services (Northern Ireland) Order 2002

Disregard any of the following payments unless they are taxable as a profit of a trade, profession or vocation

  • expenses incurred by a customer who is engaged by a charitable or voluntary organisation or is a volunteer
  • travelling expenses reimbursed to the customer
  • a living away from home allowance under Section 2(2)(d) of the Employment Act 1988, Section 2(4)(c) of the Enterprise and New Towns (Scotland) Act 1990 or Section 1 of the Employment and Training Act (Northern Ireland) 1950
  • training grant
    or
  • childcare expenses reimbursed to the customer in respect of their participation in
    • a New Deal option
    • the intensive activity period of the New Deal Pilots for 25 plus
      or
    • the Preparation for Employment Programme.

Disregard any discretionary payment made under section 2 of the Employment Act 1988 to meet or help to meet the customer’s special needs to undertake a qualifying course within the meaning of regulation 17A(7) of the Jobseekers Allowance Regulations 1996.

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Career development loans

You should disregard any payment of a career development loan paid under Section 2 of the Employment Act 1988.

Note: This doesn’t include payments for living expenses.

Disregard any payment made to a customer or their partner in respect of a person who isn’t normally a member of the customer’s family, but is temporarily in their care by

  • a health authority
  • a local authority
  • a voluntary organisation
  • that person asking for assistance from Section 26(3A) of the National Assistance Act 1948
  • a primary care trust established under Section 16A of the National Health Service Act 1977
  • asking for assistance from Article 36(7) of the Health and Personal Social Services (Northern Ireland) Order 1972 by an authority, a voluntary organisation or the person concerned
    or
  • a training school within the meaning of Section 137 of the Children and Young Persons Act (Northern Ireland) 1966.

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Payments to a juror or witness for attendance at court

Disregard in full, payments to jurors or witnesses for attendance at court but take into account compensation payments for loss of earnings or benefits.

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Payments made under a credit insurance policy

Disregard any payment under an insurance policy taken out to insure against the risk of being unable to maintain the repayments

  • on a loan which is secured on the house which the customer occupies as their home
    or
  • under a regulated agreement or hire purchase agreement or conditional sale agreement.

Only disregard to the extent that the payment is used to maintain the repayments or premiums.

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Sports awards

Disregard any payment of a sports award except to the extent that the award is made for ordinary living expenses (for example, food, ordinary footwear or clothing, or housing costs or council tax for which any member of the family is liable).