Member

In essence, the issue in Amendment 3 arises because the student loans regulations are clear that the definitions of “salary” or “earnings” for calculating whether loans should be repaid are determined by national insurance definitions. In Regulation 41, there is a definition of “earnings”, which is then used thereafter in the rest of the student loan legislation. As I understand it, the problem is that, where there is a salary sacrifice, the Bill’s effect is to increase earnings back again to calculate national insurance, carefully avoiding the income tax deduction. I appreciate that the draftsman had to find a way to ensure that the income tax deduction was still valid, but the unfortunate result is to affect the definition of “earnings” in respect of the student loan legislation.