TCTM04402 - Social Security Income

Income taken into account

The Tax Credits (Definition and Calculation of Income) Regulations 2002, Reg. 7(1)

When calculating a claimant’s social security income, take into account the total amount payable in the tax year.

The following social security benefits should be included:

• Contribution based Jobseeker’s Allowance to extent that it is taxable.
• Contributions based Employment and Support Allowance
• Incapacity Benefit, including any Child Dependency Increase paid with taxable Incapacity Benefit but excluding any paid with non-taxable Incapacity Benefit (see TCTM04403 for disregarded income)
• Carer’s allowance (called Invalid Care Allowance up to April 2003)
• Bereavement Allowance*
• Widowed Mothers Allowance including any child dependency increase**
• Widowed Parents Allowance including any child dependency increase**

Note:

* With effect from 6 April 2017 the current suite of bereavement benefits (Bereavement Payment, Bereavement Allowance and Widowed Parent’s Allowance) will be replaced by Bereavement Support Payment (BSP). This will affect those whose spouse or civil partner dies on or after 6 April 2017. BSP will not be taxable and is disregarded for the purposes of tax credits.

** With effect from the tax year 2003-04 onwards, these benefits (together with Industrial Death Benefit and Widow’s Pension) count as pension income for tax credit purposes. This is because they are taxable as pension income alongside the state pension and graduated retirement benefit under section 577 ITEPA, as referred to in regulation 5(1)(a), as amended, of the Tax Credits (Definition and Calculation of Income) Regulations.

For information on Northern Ireland Welfare Supplementary Payments see TCTM04404