SE76222 - Social Security benefits: jobseeker's allowance

Section 151A ICTA 1988

How much jobseeker's allowance is taxable?

JSA is taxable regardless of whether someone is entitled to contribution based JSA or income based JSA. There are special rules for deciding how much of the JSA someone receives is taxable.

The amount of JSA that is taxable is the lower of

• the amount the person receives and
• the taxable maximum.

The amount of the taxable maximum depends on whether someone is claiming as a single person or as a couple.

Single person (Section 151A(6) and (7))

The taxable maximum is the basic personal allowance that person would receive if he or she qualified for contribution based JSA.

Couple (Section 151A(4) and (5))

The taxable maximum is the basic personal allowance that person would receive if he or she was entitled to income based JSA. The JSA paid is the taxable income of the person who makes the claim even if she or he receives extra benefit for their husband, wife or partner.

Examples

1. Ms Kay is aged 21 and lives alone with her six year old child. She has never paid national insurance contributions and qualifies for income based JSA. During 1999/2000 she receives a total of £71.65 per week made up as follows:

The taxable maximum is the basic personal allowance Ms Kay would have received had she qualified for contribution based JSA which is £51.40. As this is less than the amount of benefit she actually receives Ms Kay's taxable benefit is £51.40 per week.

2. Mr Thomas lives with his wife (both are aged 30) and six year old child and qualifies for contribution based JSA. During 1999/2000 he receives a total of £100.85 per week made up of

The taxable maximum is the basic personal allowance Mr Thomas would have received had he qualified for income based JSA which is £80.65. As this is less than the amount of benefit he receives Mr Thomas's taxable benefit is £80.65 per week.