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This topic discusses the notional ordinary income calculation for:
Act reference: SSAct section 11(1)-'unrealisable asset', section 8(1)-'income'
Notional income for an asset (1.1.A.290), is the LOWER of:
Exception: Where the unrealisable asset is a property occupied by a near relative or a long term tenant with a low income the commercial lease value is calculated as the amount the occupier would pay under the SHA rental rebate formula.
The table below shows the notional ordinary income calculation for a person who is separated from their partner WHEN a partner is occupying an unrealisable property.
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If the occupying partner… |
Then notional income is… |
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IS paying rent to the non-occupier, |
the LESSER of: - 2.5% of the person's interest (1.1.I.185) in the property, OR - the amount of the rent MINUS all reasonable expenses. Example: Bank charges are a reasonable expense. |
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does NOT have a rental agreement with the non-occupier, |
the LESSER of: - 2.5% of the person's interest in the property, OR - the person's share of the commercial lease value. Example: A person who has a 50% interest in the home is taken to receive 50% of the commercial lease value. |
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REFUSES to pay rent to the non-occupying partner, pending property settlement, |
not calculated. |
A person MUST produce clear evidence that an occupying partner refuses to pay rent.
Example: A letter from a partner's solicitor.
Act reference: SSAct section 1129 Access to financial hardship rules-pensions, section 1130B Access to financial hardship rules-pension PP (single), section 1131 Access to financial hardship rules-benefits
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Last reviewed: 30 April 2012
