PC10 Pension Credit - Communities and Local Government

How do we work out your income?Payments in kind (for example, cigarettes and groceries) do notcount as earnings, but non-cash vouchers do count if NationalInsurance (NI) contributions have been paid on their value. Forexample, if your partner has to pay NI contributions and theiremployer gives them supermarket or chainstore gift tokens as partof their pay, the value of those vouchers would count as part of theirgross earnings for both NI and Pension Credit.We deduct any tax, NI contributions and half of any contributionstowards an occupational or personal pension scheme from grossearnings and what is left counts as earnings in our calculation.If you are self-employedSPCR 17B &CER 11–14SPCR 17B &CER 13If you or your partner are self-employed, your earnings are the netprofit from that employment. This profit is normally calculated overthe previous year, but another period may be used if this will bemore accurate.The following expenses are deducted from gross income to calculatenet profit:●●necessary expenses for the business, such as money spent onrepairing equipment, interest on a business loan and excess VATpaid while you are getting Pension Credit (this does not covercapital expenditure, depreciation, money for business expansionand business entertainment);repayment of capital on loans for replacement and repair ofbusiness equipment, but not on any other loans;● Income Tax and National Insurance (Class 2 and Class 4)contributions, if payable (these are calculated on a notionalbasis); and●half of all premiums paid for a personal pension.We can be flexible in how we use these rules to get the most accuratefigure for your income.If you are a childminderIf you are working as a childminder in your own home, two-thirds ofyour gross income is treated as expenses and is ignored completely.The other third counts as earnings.29