Quick question re HB and Private Health Insurance
If your employer pays for private health insurance, is this somehow taken into account as earnings for HB or is it disregarded?
Reg 35(2) provides that payments in kind are not earnings. So I think the answer is no, it’s not counted (although that’s also true when considering whether the notional earnings rule in Reg 42 applies).
Thank you Timothy, I agree, but it is confusing at it is taxable: Tax on company benefits: Other company benefits you’ll pay tax on - GOV.UK (http://www.gov.uk)
Basically the Client has been receiving HB and after many years the local authority is saying that the health insurance paid by her employer should count as earnings. I haven’t seen the decision yet, so the details are very vague. So, could it be a payment in lieu of earnings? Reg 35(1)(b) or is a payment in kind, therefor disregarded Reg 35(2). I think I’m being thick!
Reg 35(1)(b) and (c) are payments made to the claimant in lieu of remuneration on redundancy, and in lieu of notice, so this isn’t what you are talking about. Providing private medical health insurance is a payment in kind - it is similar in nature to, for example, an employer’s pension contribution. So I don’t think it’s earnings.
It crosses my mind that it could still be income other than earnings. In Sch 5 (disregarded income other than earnings), Para 23(2) excludes (from the disregard for “income in kind”) sums paid to a third party which it then uses to provide benefits in kind to the claimant. Could that include payments to a medical insurance provider?
Edit: ...although if that were the case, then I think it would mean that employer’s occupational pension contributions would also be treated as income other than earnings as they are not mentioned in Sch 5.[ Edited: 22 Jun 2022 at 05:23 pm by Timothy Seaside ]
Thank you again Timothy. I agree and I don’t think it’s earnings. And I don’t think it should be treated as capital. Will wait and see the decision and if they’re claiming any OP. Thanks 😊