Unusual situation. Para 21 of Schedule 5 says that any payment received from a non-dependant is disregarded from the claimant’s income other than earnings – obviously, to avoid double counting. The non-dep deduction is supposed to account for the non-dep’s contribution. But in this case, the income from the non-dependant is superficially being paid as earnings, and there is no corresponding disregard from earnings.
The only thing I might query is whether these are truly earnings. At £250 a week, the non-dep should be paying employer’s NI contributions and making PAYE deductions: is this the case?
If not, it might be more realistic to interpret the payments as being payments from a boarder or subtenant for accommodation plus keep and deal with them that way. The person making the payments would not be a non-dep in that event – it would just be income. On the other hand, if you feel that the arrangement falls short of being a commercial boarder/subtenant, then you would still have a non-dependant with a deduction only and no income to consider.
.
