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I need clarification on the following point on the treatment of earning from work for both IS and IB purposes.
The assessed net earning from employment is gross earning minus deductions for NI and tax and half of any contribution to a personal pension that claimant makes (IS Reg 36(3)).
My question is what happens in a case where the claimant is contributing more than their earnings into their personal pension. So for example, in a case of a cl on IB/DLA/IS working 10hrs earning £70 PW after tax (no NI to pay), If cl contributes £70 into pension then £35 will be the net earning minus £20 disregard and they end up with £15 net earning which will be deducted from their IS. However if cl was to contribute £100 into their pension then would it follow that half of this, £50 is deducted from their earning therefore 70 -50=20 >> 20-20 (disregard)= zero earning hence no deduction from IS????
Is/reg 36 (3/b) wording "one half of ANY sum paid by the claimant by way of a contribution towards an occupational or personal pension scheme"; my reading of this wording is that it does not restrict the sum paid by the claimant to his max earning therefore unless this falls foal of some other rule, that I am not aware of, then my example of £100 contribution could be plausible. Moreover if this is plausible it also follows that after12 months of IB permitted work they could continue with their employment, as their earning could be less than the £20 limit.
Any help on clarifying this point will be greatly appreciated I could not find anything elsewhere. Thanks
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