Correct TV licence liability and free licence value

changelog.d/2145.fixed.md

@@ -0,0 +1 @@
+- Based TV licence charges on licensable viewing and corrected the HBAI free-licence value.

policyengine_uk/tests/policy/baseline/gov/dcms/bbc/tv-licence/free_tv_licence_value.yaml

@@ -0,0 +1,101 @@
+- name: Case 1, BBC iPlayer use without television ownership.
+  period: 2026
+  input:
+    household_owns_tv: false
+    tv_licence_required: true
+    tv_licence_free_licence_share: 1
+    would_evade_tv_licence_fee: false
+  output:
+    free_tv_licence_value: 180
+
+- name: Case 2, television ownership without licensable use.
+  period: 2026
+  input:
+    household_owns_tv: true
+    tv_licence_required: false
+    tv_licence_free_licence_share: 1
+    would_evade_tv_licence_fee: false
+  output:
+    free_tv_licence_value: 0
+
+- name: Case 3, full free licence value enters HBAI income in kind.
+  period: 2026
+  input:
+    tv_licence_required: true
+    tv_licence_free_licence_share: 1
+    would_evade_tv_licence_fee: false
+  output:
+    free_tv_licence_value: 180
+
+- name: Case 4, blind discount is not a free licence in HBAI income.
+  period: 2026
+  input:
+    tv_licence_required: true
+    tv_licence_free_licence_share: 0
+    is_blind: true
+    would_evade_tv_licence_fee: false
+  output:
+    tv_licence_discount: 0.5
+    free_tv_licence_value: 0
+
+- name: Case 5, a partial-year free licence contributes its proportional value.
+  period: 2020
+  absolute_error_margin: 0.01
+  input:
+    tv_licence_required: true
+    tv_licence_free_licence_share: 0.3205479452
+    would_evade_tv_licence_fee: false
+  output:
+    free_tv_licence_value: 50.49
+
+- name: Case 6, an over-75 household on Pension Credit gets a full free licence.
+  period: 2026
+  input:
+    age: 80
+    pension_credit: 1
+    tv_licence_required: true
+    would_evade_tv_licence_fee: false
+  output:
+    tv_licence_free_licence_share: 1
+    free_tv_licence_value: 180
+
+- name: Case 7, age alone does not qualify after the Pension Credit condition begins.
+  period: 2026
+  input:
+    age: 80
+    pension_credit: 0
+    tv_licence_required: true
+    would_evade_tv_licence_fee: false
+  output:
+    tv_licence_free_licence_share: 0
+    free_tv_licence_value: 0
+
+- name: Case 8, the 2020 transition determines both free value and paid liability.
+  period: 2020
+  absolute_error_margin: 0.01
+  input:
+    age: 80
+    pension_credit: 0
+    tv_licence_required: true
+    is_blind: false
+    would_evade_tv_licence_fee: false
+  output:
+    tv_licence_free_licence_share: 0.3205479452
+    tv_licence_discount: 0.3205479452
+    free_tv_licence_value: 50.49
+    tv_licence: 107.01
+
+- name: Case 9, the blind discount reduces only the paid part of the 2020 licence.
+  period: 2020
+  absolute_error_margin: 0.01
+  input:
+    age: 80
+    pension_credit: 0
+    tv_licence_required: true
+    is_blind: true
+    would_evade_tv_licence_fee: false
+  output:
+    tv_licence_free_licence_share: 0.3205479452
+    tv_licence_discount: 0.6602739726
+    free_tv_licence_value: 50.49
+    tv_licence: 53.51

policyengine_uk/tests/policy/baseline/gov/dcms/bbc/tv-licence/tv_licence.yaml

@@ -42,3 +42,44 @@
     would_evade_tv_licence_fee: false
   output:
     tv_licence: 0
+
+- name: TV licence required for BBC iPlayer without television ownership.
+  period: 2026
+  input:
+    household_owns_tv: false
+    tv_licence_required: true
+    tv_licence_discount: 0
+    would_evade_tv_licence_fee: false
+  output:
+    tv_licence: 180
+
+- name: Television ownership alone does not require a TV licence.
+  period: 2026
+  input:
+    household_owns_tv: true
+    tv_licence_required: false
+    tv_licence_discount: 0
+    would_evade_tv_licence_fee: false
+  output:
+    tv_licence: 0
+
+- name: Television ownership remains the fallback for existing inputs.
+  period: 2026
+  input:
+    household_owns_tv: false
+    tv_licence_discount: 0
+    would_evade_tv_licence_fee: false
+  output:
+    tv_licence: 0
+
+- name: Blind discount applies only after a partial-year free licence ends.
+  period: 2020
+  absolute_error_margin: 0.01
+  input:
+    tv_licence_required: true
+    tv_licence_free_licence_share: 0.3205479452
+    is_blind: true
+    would_evade_tv_licence_fee: false
+  output:
+    tv_licence_discount: 0.6602739726
+    tv_licence: 53.51

policyengine_uk/tests/test_tv_licence_metadata.py

@@ -0,0 +1,8 @@
+from policyengine_uk import CountryTaxBenefitSystem
+from policyengine_uk.model_api import GBP
+
+
+def test_free_tv_licence_value_uses_currency_units():
+    system = CountryTaxBenefitSystem()
+
+    assert system.variables["free_tv_licence_value"].unit == GBP

policyengine_uk/variables/gov/dcms/bbc/tv_licence/free_tv_licence_value.py

@@ -3,18 +3,29 @@
 
 class free_tv_licence_value(Variable):
     label = "free TV licence value"
+    documentation = (
+        "Value included in HBAI income for the share of the year covered by "
+        "the complete age-based exemption. The blind discount is excluded."
+    )
     entity = Household
     definition_period = YEAR
     value_type = float
-    unit = "/1"
+    unit = GBP
     reference = (
+        "https://www.legislation.gov.uk/ukpga/2003/21/section/363",
         "https://www.legislation.gov.uk/ukpga/2003/21/section/365A",
-        "https://www.tvlicensing.co.uk/reducedfee",
+        "https://www.legislation.gov.uk/uksi/2016/704/regulation/9/made",
+        "https://www.legislation.gov.uk/uksi/2026/104/made",
+        "https://www.gov.uk/free-discount-tv-licence",
+        "https://www.gov.uk/government/statistics/households-below-average-income-for-financial-years-ending-1995-to-2025/households-below-average-income-background-information-and-methodology-report-fye-2025",
     )
 
     def formula(household, period, parameters):
-        owns_tv = household("household_owns_tv", period)
-        discount = household("tv_licence_discount", period)
+        licence_required = household("tv_licence_required", period)
+        free_licence_share = household(
+            "tv_licence_free_licence_share",
+            period,
+        )
         would_evade = household("would_evade_tv_licence_fee", period)
         fee = parameters(period).gov.dcms.bbc.tv_licence.colour
-        return (owns_tv & ~would_evade) * fee * discount
+        return (licence_required & ~would_evade) * fee * free_licence_share

policyengine_uk/variables/gov/dcms/bbc/tv_licence/tv_licence.py

@@ -8,12 +8,15 @@ class tv_licence(Variable):
     definition_period = YEAR
     value_type = float
     unit = GBP
-    reference = "https://www.legislation.gov.uk/ukpga/2003/21/section/363"
+    reference = (
+        "https://www.legislation.gov.uk/ukpga/2003/21/section/363",
+        "https://www.legislation.gov.uk/uksi/2016/704/regulation/9/made",
+    )
     category = TAX
 
     def formula(household, period, parameters):
-        owns_tv = household("household_owns_tv", period)
+        licence_required = household("tv_licence_required", period)
         discount = household("tv_licence_discount", period)
         would_evade = household("would_evade_tv_licence_fee", period)
         fee = parameters(period).gov.dcms.bbc.tv_licence.colour
-        return (owns_tv & ~would_evade) * fee * (1 - discount)
+        return (licence_required & ~would_evade) * fee * (1 - discount)

policyengine_uk/variables/gov/dcms/bbc/tv_licence/tv_licence_discount.py

@@ -1,5 +1,4 @@
 from policyengine_uk.model_api import *
-from policyengine_uk.utils.excise import fiscal_year_segments
 
 
 class tv_licence_discount(Variable):
@@ -17,24 +16,14 @@ class tv_licence_discount(Variable):
     def formula(household, period, parameters):
         person = household.members
         tv_licence = parameters(period).gov.dcms.bbc.tv_licence
-
-        # Aged discount
-        claims_pc = add(household, period, ["pension_credit"]) > 0
-        aged_discount = 0
-        for aged_rules, share in fiscal_year_segments(
-            parameters.gov.dcms.bbc.tv_licence.discount.aged,
-            period.start.year,
-        ):
-            aged = person("age", period) >= aged_rules.min_age
-            has_aged = household.any(aged)
-            meets_pc_requirement = not_(aged_rules.must_claim_pc) | claims_pc
-            aged_discount += (
-                has_aged * meets_pc_requirement * aged_rules.discount * share
-            )
+        free_licence_share = household(
+            "tv_licence_free_licence_share",
+            period,
+        )
 
         # Blind discount
         is_blind = person("is_blind", period)
         has_blind = household.any(is_blind)
         blind_discount = has_blind * tv_licence.discount.blind.discount
 
-        return max_(aged_discount, blind_discount)
+        return free_licence_share + (1 - free_licence_share) * blind_discount

policyengine_uk/variables/gov/dcms/bbc/tv_licence/tv_licence_free_licence_share.py

@@ -0,0 +1,34 @@
+from policyengine_uk.model_api import *
+from policyengine_uk.utils.excise import fiscal_year_segments
+
+
+class tv_licence_free_licence_share(Variable):
+    label = "Share of the year covered by a free TV licence"
+    documentation = (
+        "Share of the year for which the household qualifies for the complete "
+        "age-based TV licence exemption. This excludes the blind discount."
+    )
+    entity = Household
+    definition_period = YEAR
+    value_type = float
+    unit = "/1"
+    reference = (
+        "https://www.legislation.gov.uk/ukpga/2003/21/section/365A",
+        "https://www.gov.uk/government/news/bbc-and-governments-joint-statement-on-delaying-the-tv-licence-fee-for-over-75s",
+        "https://www.gov.uk/free-discount-tv-licence",
+    )
+
+    def formula(household, period, parameters):
+        person = household.members
+        claims_pc = add(household, period, ["pension_credit"]) > 0
+        free_licence_share = 0
+        for aged_rules, share in fiscal_year_segments(
+            parameters.gov.dcms.bbc.tv_licence.discount.aged,
+            period.start.year,
+        ):
+            has_aged = household.any(person("age", period) >= aged_rules.min_age)
+            meets_pc_requirement = not_(aged_rules.must_claim_pc) | claims_pc
+            free_licence_share += (
+                has_aged * meets_pc_requirement * aged_rules.discount * share
+            )
+        return free_licence_share

policyengine_uk/variables/gov/dcms/bbc/tv_licence/tv_licence_required.py

@@ -0,0 +1,22 @@
+from policyengine_uk.model_api import *
+
+
+class tv_licence_required(Variable):
+    label = "TV licence required"
+    documentation = (
+        "Whether anyone in the household watches or records live television "
+        "or uses BBC iPlayer. When this is not provided directly, television "
+        "ownership is used as a backward-compatible proxy. That proxy can "
+        "overstate liability for owners who use only non-BBC on-demand services "
+        "and understate it for non-owners who watch live television or BBC iPlayer."
+    )
+    entity = Household
+    definition_period = YEAR
+    value_type = bool
+    reference = (
+        "https://www.legislation.gov.uk/ukpga/2003/21/section/363",
+        "https://www.legislation.gov.uk/uksi/2016/704/regulation/9/made",
+    )
+
+    def formula(household, period, parameters):
+        return household("household_owns_tv", period)

policyengine_uk/variables/gov/dcms/bbc/tv_licence/would_evade_tv_licence_fee.py

@@ -5,7 +5,8 @@ class would_evade_tv_licence_fee(Variable):
     label = "Would evade TV licence fee"
     documentation = (
         "Whether this household would unlawfully evade the TV licence fee. "
-        "Generated stochastically in the dataset using evasion rates."
+        "Generated stochastically in the dataset using evasion rates. The "
+        "realised result does not change in response to reforms of the fee."
     )
     entity = Household
     definition_period = YEAR