Calculate the ESA permitted work limit from the national living wage

changelog.d/esa-permitted-work-limit-from-nlw.changed.md

@@ -0,0 +1 @@
+The ESA permitted work higher earnings limit is now calculated as 16 x the national living wage, rounded up to the next 50p (ESA Regs 2008 reg 45(4) and (9A)), so it follows a change to gov.hmrc.minimum_wage instead of being listed year by year and projected with average earnings. The gov.dwp.ESA.exempt_work.higher_earnings_limit parameter is removed, and the minimum wage rates and apprentice age limit now start at 1 October 2010. Regression tests cover historical wage categories and national living wage reforms across ESA claimants. The historical fixed limit now includes £95 from 1 October 2010, and both the model and reference tests use the designated adult wage band.

policyengine_uk/parameters/gov/dwp/ESA/exempt_work/fixed_higher_earnings_limit.yaml

@@ -0,0 +1,26 @@
+description: Fixed weekly earnings limit of Employment and Support Allowance permitted work before 11 April 2011. Work done for less than the exempt work hours limit, for which a claimant's earnings in any week did not exceed this amount, was exempt work. From 11 April 2011 the limit is a number of hours a week at the National Minimum Wage instead.
+values:
+  2008-10-27:
+    value: 92
+    reference:
+      - title: Employment and Support Allowance Regulations 2008 reg. 45(4) (as made)
+        href: https://www.legislation.gov.uk/uksi/2008/794/regulation/45/2008-10-27
+  2009-10-01:
+    value: 93
+    reference:
+      - title: Social Security (Miscellaneous Amendments) (No. 3) Regulations 2009 (SI 2009/2343) reg. 5(2)
+        href: https://www.legislation.gov.uk/uksi/2008/794/regulation/45/2009-10-01
+  2010-10-01:
+    value: 95
+    reference:
+      - title: Social Security (Miscellaneous Amendments) (No. 4) Regulations 2010 (SI 2010/2126) reg. 5(2)
+        href: https://www.legislation.gov.uk/uksi/2010/2126/regulation/5/made
+metadata:
+  unit: currency-GBP
+  period: week
+  label: ESA exempt work fixed higher earnings limit
+  reference:
+    - title: Employment and Support Allowance Regulations 2008 reg. 45(4)
+      href: https://www.legislation.gov.uk/uksi/2008/794/regulation/45
+    - title: Social Security (Miscellaneous Amendments) Regulations 2011 (SI 2011/674) reg. 16(5)
+      href: https://www.legislation.gov.uk/uksi/2008/794/regulation/45/2011-04-11

policyengine_uk/parameters/gov/dwp/ESA/exempt_work/higher_earnings_limit_minimum_wage_hours.yaml

@@ -0,0 +1,25 @@
+description: >-
+  Hours a week at the National Minimum Wage that set the weekly earnings limit
+  of Employment and Support Allowance permitted work from 11 April 2011.
+  Regulation 45(4) makes work done for less than the exempt work hours limit
+  exempt work where the claimant's earnings in any week do not exceed this many
+  times the National Minimum Wage, which regulation 2(1) defines as the rate in
+  regulation 11 of the National Minimum Wage Regulations 1999, now the national
+  living wage. Regulation 45(9A) rounds the result up to the next 50p.
+values:
+  2011-04-11:
+    value: 16
+    reference:
+      - title: Social Security (Miscellaneous Amendments) Regulations 2011 (SI 2011/674) reg. 16(5)(a)
+        href: https://www.legislation.gov.uk/uksi/2008/794/regulation/45/2011-04-11
+metadata:
+  unit: hour
+  period: week
+  label: ESA exempt work higher earnings limit hours
+  reference:
+    - title: Employment and Support Allowance Regulations 2008 reg. 45(4) and (9A)
+      href: https://www.legislation.gov.uk/uksi/2008/794/regulation/45
+    - title: Employment and Support Allowance Regulations 2008 reg. 2(1) ("National Minimum Wage")
+      href: https://www.legislation.gov.uk/uksi/2008/794/regulation/2
+    - title: Decision Makers' Guide ch. 41, para. 41190 and Appendix 5
+      href: https://assets.publishing.service.gov.uk/media/689db34d1fedc616bb13399c/dmg-ch-41.pdf

policyengine_uk/parameters/gov/hmrc/minimum_wage/apprentice.yaml

@@ -1,9 +1,20 @@
 description: Minimum wage rate for apprentices.
 # The apprenticeship rate applies to an apprentice who is under 19 or in the
-# first 12 months of the apprenticeship (NMW Regulations 2015 reg. 5). Rates
-# take effect on the commencement date of each amending S.I.: on 1 October
-# until 2016, then on 1 April from 2017.
+# first 12 months of the apprenticeship (NMW Regulations 2015 reg. 5). The
+# rate began on 1 October 2010 (NMW Regulations 1999 reg. 13(3) as substituted
+# by S.I. 2010/1901 reg. 5). Rates take effect on the commencement date of each
+# amending S.I.: on 1 October until 2016, then on 1 April from 2017.
 values:
+  2010-10-01:
+    value: 2.5
+    reference:
+      - title: The National Minimum Wage Regulations 1999 (Amendment) Regulations 2010, regulation 5 (substituted regulation 13(3))
+        href: https://www.legislation.gov.uk/uksi/2010/1901/made
+  2011-10-01:
+    value: 2.6
+    reference:
+      - title: The National Minimum Wage (Amendment) Regulations 2011, regulation 5(c)
+        href: https://www.legislation.gov.uk/uksi/2011/2345/made
   2012-10-01:
     value: 2.65
     reference:

policyengine_uk/parameters/gov/hmrc/minimum_wage/apprentice_age_limit.yaml

@@ -1,8 +1,8 @@
 description: Apprentices below this age qualify for the apprentice minimum wage regardless of how long they have been in their apprenticeship.
-# The under-19 rule took effect on 1 October 2010. Values begin with the
-# model's minimum wage rate history on 1 October 2012.
+# The under-19 rule and the apprentice minimum wage rate took effect on
+# 1 October 2010.
 values:
-  2012-10-01: 19
+  2010-10-01: 19
 metadata:
   label: Apprentice minimum wage age limit
   unit: year

policyengine_uk/parameters/gov/hmrc/minimum_wage/non_apprentice.yaml

@@ -1,10 +1,12 @@
 description: Minimum wage rate for non-apprentices by age.
 
-# The thresholds are every age boundary the law has used since October 2012
+# The thresholds are every age boundary the law has used since October 2010
 # (18, 21, 23 and 25), giving the bands under 18, 18 to 20, 21 to 22, 23 to 24
 # and 25 or over. The thresholds do not change. Where the law groups adjacent
 # bands, they carry the same rate.
 #
+# - From 1 October 2010 the adult rate applied from age 21, not 22 (NMW
+#   Regulations 1999 reg. 13(1) as substituted by S.I. 2010/1901 reg. 5).
 # - Until 31 March 2016 one adult rate applied from age 21 (NMW Regulations
 #   1999 reg. 11, then NMW Regulations 2015 reg. 4(1)(a)).
 # - From 1 April 2016 the national living wage (NMW Regulations 2015 reg. 4)
@@ -22,8 +24,18 @@ description: Minimum wage rate for non-apprentices by age.
 
 brackets:
 - threshold:
-    2012-10-01: 0
+    2010-10-01: 0
   amount:
+    2010-10-01:
+      value: 3.64
+      reference:
+        - title: The National Minimum Wage Regulations 1999 (Amendment) Regulations 2010, regulation 5 (substituted regulation 13(2))
+          href: https://www.legislation.gov.uk/uksi/2010/1901/made
+    2011-10-01:
+      value: 3.68
+      reference:
+        - title: The National Minimum Wage (Amendment) Regulations 2011, regulation 5(b)
+          href: https://www.legislation.gov.uk/uksi/2011/2345/made
     2012-10-01:
       value: 3.68
       reference:
@@ -105,8 +117,18 @@ brackets:
         - title: The National Minimum Wage (Amendment) Regulations 2026, regulation 2(3)(b)
           href: https://www.legislation.gov.uk/uksi/2026/357/made
 - threshold:
-    2012-10-01: 18
+    2010-10-01: 18
   amount:
+    2010-10-01:
+      value: 4.92
+      reference:
+        - title: The National Minimum Wage Regulations 1999 (Amendment) Regulations 2010, regulation 5 (substituted regulation 13(1), ages 18 to 20)
+          href: https://www.legislation.gov.uk/uksi/2010/1901/made
+    2011-10-01:
+      value: 4.98
+      reference:
+        - title: The National Minimum Wage (Amendment) Regulations 2011, regulation 5(a)
+          href: https://www.legislation.gov.uk/uksi/2011/2345/made
     2012-10-01:
       value: 4.98
       reference:
@@ -188,8 +210,18 @@ brackets:
         - title: The National Minimum Wage (Amendment) Regulations 2026, regulation 2(3)(a)
           href: https://www.legislation.gov.uk/uksi/2026/357/made
 - threshold:
-    2012-10-01: 21
+    2010-10-01: 21
   amount:
+    2010-10-01:
+      value: 5.93
+      reference:
+        - title: The National Minimum Wage Regulations 1999 (Amendment) Regulations 2010, regulation 3
+          href: https://www.legislation.gov.uk/uksi/2010/1901/made
+    2011-10-01:
+      value: 6.08
+      reference:
+        - title: The National Minimum Wage (Amendment) Regulations 2011, regulation 3
+          href: https://www.legislation.gov.uk/uksi/2011/2345/made
     2012-10-01:
       value: 6.19
       reference:
@@ -271,8 +303,18 @@ brackets:
         - title: The National Minimum Wage (Amendment) Regulations 2026, regulation 2(2)
           href: https://www.legislation.gov.uk/uksi/2026/357/made
 - threshold:
-    2012-10-01: 23
+    2010-10-01: 23
   amount:
+    2010-10-01:
+      value: 5.93
+      reference:
+        - title: The National Minimum Wage Regulations 1999 (Amendment) Regulations 2010, regulation 3
+          href: https://www.legislation.gov.uk/uksi/2010/1901/made
+    2011-10-01:
+      value: 6.08
+      reference:
+        - title: The National Minimum Wage (Amendment) Regulations 2011, regulation 3
+          href: https://www.legislation.gov.uk/uksi/2011/2345/made
     2012-10-01:
       value: 6.19
       reference:
@@ -354,8 +396,18 @@ brackets:
         - title: The National Minimum Wage (Amendment) Regulations 2026, regulation 2(2)
           href: https://www.legislation.gov.uk/uksi/2026/357/made
 - threshold:
-    2012-10-01: 25
+    2010-10-01: 25
   amount:
+    2010-10-01:
+      value: 5.93
+      reference:
+        - title: The National Minimum Wage Regulations 1999 (Amendment) Regulations 2010, regulation 3
+          href: https://www.legislation.gov.uk/uksi/2010/1901/made
+    2011-10-01:
+      value: 6.08
+      reference:
+        - title: The National Minimum Wage (Amendment) Regulations 2011, regulation 3
+          href: https://www.legislation.gov.uk/uksi/2011/2345/made
     2012-10-01:
       value: 6.19
       reference:

policyengine_uk/tests/legacy_award_work_reference.py

@@ -131,14 +131,25 @@ def esa_weekly_earnings(adult, parameters):
     return (net_pay + net_profit) / WEEKS
 
 
+def esa_higher_earnings_limit(parameters):
+    """Reg 45(4) from 11 April 2011: 16 x the adult/NLW rate (reg 2(1),
+    DMG 41190), with part of a pound under 50p rounded up to 50p and over
+    50p up to the next pound (reg 45(9A))."""
+    exempt_work = parameters.gov.dwp.ESA.exempt_work
+    # The scale is sorted by age. The final band holds the designated adult
+    # rate even if a reform sets a younger band's rate above it.
+    adult_rate = parameters.gov.hmrc.minimum_wage.non_apprentice.amounts[-1]
+    limit = exempt_work.higher_earnings_limit_minimum_wage_hours * adult_rate
+    return math.ceil(round(limit * 2, 6)) / 2
+
+
 def esa_claimant_in_remunerative_work(adult, parameters):
     exempt_work = parameters.gov.dwp.ESA.exempt_work
     earnings = esa_weekly_earnings(adult, parameters)
     within_lower_limit = earnings <= exempt_work.lower_earnings_limit
-    permitted_work = (
-        weekly_hours(adult) < exempt_work.hours_limit
-        and earnings <= exempt_work.higher_earnings_limit
-    )
+    permitted_work = weekly_hours(
+        adult
+    ) < exempt_work.hours_limit and earnings <= esa_higher_earnings_limit(parameters)
     return not (within_lower_limit or permitted_work)