Employment Schemes (Info)

A person attending an employment scheme receives payment as a reward for services. Any payment is subject to income tax and Social Security contributions and therefore is classed as earnings.

The hours spent on a scheme therefore qualify as time spent in employment and should be included when considering whether the work is remunerative work.

A person attending an employment scheme always has a contract of employment with the person or organisation paying the earnings.

Deciding whether a scheme provides employment

A person who receives earnings (which are liable to deduction of tax and Social Security contributions) will be an employee whereas a person who receives a training allowance will be a trainee. Follow the guidance in Trainees.

If the claimant is unsure if they are an employee and it cannot be resolved by information provided by the claimant you should establish whether there is a contract of employment.