PAYE78095 - PAYE operation: taxation of job seekers allowance: two schemes in operation for JSA

In April 2004 the 2003 PAYE Regulations came into effect. These simplified the previous regulations and for social security benefits brought them in line with Department for Work and Pensions and HMRC procedures.

Statutory Instrument (SI) 2003 No.2682 Regulations 148 - 172 gives details of two separate schemes in operation for Jobseekers allowance (JSA).

Normal Cases (Chapter 1)

This is the main scheme. The Department for Work and Pensions (DWP) operates a modified form of PAYE on taxable amounts of benefit paid to the wholly unemployed. Claims are made at local Benefit Offices.

Special Cases (Chapter 2)

This is a subsidiary scheme for Special Cases, sometimes called temporary stop claimants. The DWP tells HMRC and the individuals concerned of amounts of taxable benefit paid to

• Employees who have been temporarily laid off work or placed on short time working. In some cases the employer may include the benefit in normal PAYE operations
• A claimant who is a share fisherman

PAYE is not operated by the DWP on any of these payments.

Northern Ireland 

In Northern Ireland both schemes are operated by the Department for Social Development in local Social Security Offices. In this guidance read

• Department for Social Development for Department for Work and Pensions

And

• Social Security Offices for Benefits Offices