3. Dividing income throughout the year
Universal credit (UC) is paid monthly, for an ’assessment period’. Each assessment period runs from the day of the month you claimed UC, for one month – eg, if you claim on the second of the month, each assessment period runs from the second of the month to the first of the following month. The annual amount of your student income must be divided over the number of assessment periods in the course year to arrive at the monthly amount that is used to work out UC.
Student income counts for each assessment period during your course, excluding the one at the end of each academic year and those in the long vacation.1Reg 68 UC Regs Student income counts as income:
•from the start of the assessment period in which the course/course year begins; and
•for every subsequent assessment period during the course/course year.
Student income is ignored:2Reg 13 UC Regs •in the assessment period in which the course ends or the long vacation starts;
•in any assessment period that falls completely within the long vacation; and
•if you abandon or leave your course completely, in the assessment period in which you leave.
Long vacation
The ‘long vacation’ is the longest holiday in a course which lasts at least two years, and must last for at least one month.3Reg 68(7) UC Regs Once you have calculated the number of assessment periods in the course year, divide the total annual amount of loans and/or grants by this number, and apply the monthly disregard. An amount of £110 of student income is disregarded in each assessment period.4Reg 71 UC Regs
Examples
Laura has a five-year-old daughter and is single. She starts a degree course. Year one of her course runs from 28 September 2020 to 14 May 2021. Her assessment periods run from the third of the month to the second of the following month.
Step one Laura gets a loan of £6,750, independent students’ bursary of £1,000 and lone parents’ grant of £1,305.
Step two Her independent students’ bursary is disregarded. Her loan and lone parents’ grant (total £8,055) count as income over eight assessment periods in the first year of her course (from 3 September 2020 to 2 May 2021).
Step three £8,055 ÷ 8 = £1,006.88
Step four £1,006.88 – £110 = £896.88
Step five She has no other income. Laura’s UC is calculated on student income of £896.88 a month from 3 September 2020 to 2 May 2021. From 3 May 2021, weekly income from her student funding is nil. Laura’s next UC payment in June 2021 will be based on £0 student funding.
Paula has a seven-year-old son and is single. Her course runs from 7 September 2020 to 4 June 2021. Her assessment periods run from the 14th of the month to the 13th of the following month.
Step one Paula gets a further education bursary maintenance allowance of £1,120 (40 weeks at £28).
Step two Her bursary counts as income over nine assessment periods (from 14 August 2020 to 13 May 2021).
Step three £1,120 ÷ 9 = £124.44
Step four £124.44 – £110 = £14.44
Step five She has no other income. Paula’s UC is calculated on student income of £14.44 a month from 14 August 2020 to 13 May 2021.