EIM01652 - Employment income: New Deal: types of scheme

Different New Deal options

After the 'Gateway' period there are four New Deal options available for participants aged 18 to 24:

• option 1 - work in a subsidised job with an employer, including self employment (see EIM01653)
• option 2 - full-time education and training towards gaining an approved qualification (see EIM01654)
• option 3 - work on the Environment Task Force (ETF) (see EIM01655)
• option 4 - work in the voluntary sector (VS) (see EIM01655).

Generally options last up to 26 weeks, with the following exceptions:

• the education and training option can last up to 52 weeks
• participants on the ETF or VS options can transfer to a subsidised job with an employer
• participants in the education and training option can switch to either a subsidised job with an employer, work on the ETF or in the VS. These moves can extend New Deal involvement to 39 weeks.

New Deal participants aged 25 and over

For New Deal participants aged 25 and over, the only New Deal options available are options 1 and 2.

Special tax treatment for 1997/98 and 1998/99

In the early stages of the scheme there was some confusion over the correct tax treatment of payments under some options. To resolve this a special tax treatment was agreed for 1997/98 and 1998/99 (see SE01656).

New Deal 50 plus

This scheme provides for an employment credit to be paid direct to over 50s entering work who meet the scheme conditions. Some participants may also receive a training grant. The tax and NICs treatment differs from other New Deal schemes. For New Deal 50 plus see EIM01660.