Do shopping/gift vouchers count as income?

Pepzofio

If someone received a 'lump sum' (of, say, £200) in gift vouchers/high street shopping vouchers or similar, would they need to declare it as income/capital if they were claiming any means tested benefits, or more particularly Housing Benefit?

I'm fairly certain the answer is no, but as someone else has asked me I wanted to see what others thought. (If possible, can anyone point me in the direction of a relevant clause in benefits legislation that clarifies one way or the other?)

Also, if it was a one-off payment in cash (and not from an employer/for work carried out), am I right in thinking it would be treated as capital rather than income?

Cheers

dmg24

As with cash, it would depend on the reason that the vouchers were given. If the vouchers were a payment in kind for work done, then they should be declared.

Pepzofio

Thanks dmg - I'm not really sure, but from what I can gather it would not be for specific work done, but more as a reward/incentive. I'll try and find out a bit more.

tigerlily

Personally I would say yes it would need to be declared as it is income, wether reward, incentive or wages. Thats just my opinion based on my moral values though.

dmg24

A reward or incentive related to work would have to be declared, in the same way that it would be a taxable benefit for someone not claiming means tested benefits.

Pepzofio

tigerlily wrote: »

Personally I would say yes it would need to be declared as it is income, wether reward, incentive or wages. Thats just my opinion based on my moral values though.

Thanks for your opinion, but just to clarify, I am looking at this from the point of view of the donor wanting to ensure that giving the vouchers will not put the recipient in a sticky position benefits-wise, therefore it is really the legal obligation I am interested in.

Personally I agree yes, income is income - if it is given for work. But out of interest, if someone gave you vouchers as a birthday present or if you won them in a raffle, would you consider that income as well?

Golden_Anemone

The DMG says the following:

Vouchers (including child care cheques)

28440 The DM should fully disregard, in accordance with DMG 28418, any vouchers
received by the claimant as income in kind. But DMs should consider whether

1. claimants should be treated as having notional income or
2. there has been deprivation of income

before applying the disregard1 (See DMG 26093 for vouchers treated as earnings).

1 JSA Regs, Sch 7, para 22; IS (Gen) Regs, Sch 9, para 21

28441 The types of vouchers that claimants might receive are

1. education vouchers for four year old children

2. luncheon vouchers

3. child care vouchers

4. child care cheques

5. gift vouchers from shops.

and

Vouchers and child care cheques

26093 An employee may receive vouchers instead of, or as well as, earnings. These can include

1. luncheon vouchers

2. child care vouchers

3. child care cheques.
26094 Earnings of an employed earner include the amount for any payment made by a
non-cash voucher that has been taken into account as earnings for the purposes of
working out the amount of SS contributions to deduct1.

Note: The amount taken into account as earnings for SS purposes may be equal, or
be more or less than, the face value of the voucher.

1 IS (Gen) Regs, reg 35(1)(j); JSA Regs, reg 98(1)(h)

26095 Payments in kind are not normally taken into account as earnings of an employed earner. Payments in kind do not include any non-cash voucher if it has been taken into account as earnings of an employed earner.1 (see DMG 26093 above).

1 IS (Gen) Regs, reg 35(2A); JSA Regs, reg 98(2A)

Pepzofio

Thanks Golden Anemone - just one question - what's DM/DMG?!

Jules

DM = Decision Maker
DMG = dmg24 poster above

Golden_Anemone

Pepzofio wrote: »

Thanks Golden Anemone - just one question - what's DM/DMG?!

Nearly Jules.

The DMG is the Decision Makers Guide - the bible for any Decision Maker on how the relevant benefit law should be interpreted and applied.

Available on the DWP website for all to read.

No criticism implied but I do find it strange how seldom it is referred to on here given how important it is. When I was a DM for Income Support I referred to it most days on exactly the sort of issues that are raised in the forum.

alwaysonthego_2

Golden_Anemone wrote: »

No criticism implied but I do find it strange how seldom it is referred to on here given how important it is. When I was a DM for Income Support I referred to it most days on exactly the sort of issues that are raised in the forum.

Many of the regular posters do not work for the DWP, but have related experience working with charities etc. I often refer to the CPAG Tax credits and welfare benefits book which is the bible in my line of work. I rarely use the DMG.