Benefits for Students in Scotland Handbook 2020/21Part 3: Treatment of incomeChapter 17: How income affects means-tested benefits 3. Dividing student income throughout the year
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3. Dividing student income throughout the year
The annual amount of your loan and grant must be divided over the number of weeks in, usually, a standard academic year to arrive at the weekly amount used to calculate income support (IS), income-based jobseeker’s allowance (JSA), income-related employment and support allowance (ESA) and housing benefit (HB). The ‘standard academic year’ begins on 1 September, 1 January, 1 April or 1 July depending on whether your course begins in the autumn, winter, spring or summer.1IS Reg 61(1) IS Regs
ESA Reg 131(1) ESA Regs
HB Reg 53(1) HB Regs Courses that start in August are taken to have an academic year starting on 1 September.2IS Reg 61(1) IS Regs
ESA Reg 131(1) ESA Regs
HB Reg 53(1) HB Regs
All Definition of ‘academic year’ Rules specify exactly the weeks over which the loan and grant are taken into account.
 
1     IS Reg 61(1) IS Regs
ESA Reg 131(1) ESA Regs
HB Reg 53(1) HB Regs »
2     IS Reg 61(1) IS Regs
ESA Reg 131(1) ESA Regs
HB Reg 53(1) HB Regs
All Definition of ‘academic year’ »
Student loans
Student loans are normally divided over 42 or 43 weeks from the beginning of September to the end of June. During this period, your student loan is taken into account as your income in the assessment of IS, income-based JSA, income-related ESA and HB. If your income is too high, you are not eligible for these benefits. However, your student loan is not taken into account from around the end of June to the beginning of September. Because your income goes down in these months (unless you have other income – eg, from earnings), you may be able to get benefit during the summer. It is important, therefore, to make a claim from the end of June, even if you were refused benefit at the start of the academic year.
The details of the weeks over which your loan is taken into account are as follows.
Courses starting in the autumn term lasting more than a year
The student loan is divided over the number of weeks starting from the first day of the first benefit week in September until the last day of the last benefit week in June.1IS Reg 66A(2)(c) IS Regs
ESA Reg 137(3)(e) ESA Regs
HB Reg 64(2)(d) HB Regs In 2020/21 this is 42 weeks for benefit weeks that begin on a Monday, Friday or Saturday and 43 weeks for benefit weeks that begin on a Tuesday, Wednesday or Thursday. If your course starts in August, you count the weeks starting from the first day of the first benefit week on or after the start of your course, until the last day of the last benefit week in June.
This is the period over which your loan is taken into account as income in the benefit assessment, unless you do not count as a student at all. For example, at the start of your first year, you do not count as being a student until you actually start attending or undertaking the course. In other words, in the first year the loan is still divided over 42/43 weeks, but the weekly amount arrived at is ignored as income until you start your course.2CIS/3734/2004
In the final year of study, the loan is divided over the number of benefit weeks starting from the first day of the first benefit week in September (or the start of the first term if it starts in August) until the end of the benefit week on or before the last day of the final academic term.3IS Reg 66A(2)(b) IS Regs
ESA Reg 137(3)(d) ESA Regs
HB Reg 64(2)(c) HB Regs
For HB, the start of the benefit week is a Monday.4Reg 2 HB Regs For IS, JSA and ESA, it depends on your national insurance number.5IS Reg 2(1) IS Regs
JSA Reg 1(3) JSA Regs
ESA Reg 2(1) ESA Regs
Example: first-year student claiming income support
Samira is in her first year. She has two children aged three and 10 and gets child tax credit (CTC) for them. She gets a student loan of £6,750, an independent students’ bursary of £1,000 and a lone parents’ grant of £1,305. Her first term begins on Monday 21 September 2020. Her benefit weeks start on Fridays. Her student loan is divided over the weeks from Friday 4 September 2020 until Thursday 24 June 2021 (42 weeks) to get a weekly income figure. However, because she is in her first year, she does not count as a student until she starts university on 21 September and so her student income is ignored until then. Because she gets CTC, the lone parents’ grant is ignored for IS.
From the start of term:
Her weekly loan and grant income is:
£
Loan plus independent students’ bursary
7,750
Less disregards for books and equipment (£390) and travel (£303)
7,057
Divided by 42 weeks =
168.02
Less £10 weekly loan disregard =
158.02
£158.02 is taken into account as weekly income from her loan and grants between Friday 25 September 2020 and 24 June 2021.
 
Her IS applicable amount is £74.35 a week. She gets her usual IS up until she starts her course. From 25 September, her IS stops because her income is higher than her IS applicable amount.
At the end of the academic year:
Her weekly income from her loan between 25 June and 2 September 2021 is nil. Samira cannot reclaim IS, but would be eligible for universal credit (UC). She should get a better-off calculation to check whether she should claim UC or remain on CTC.
Example: second-year student claiming housing benefit
Agnes is in her second year. She has one child aged two and is claiming HB as a lone parent. She gets a student loan and an independent students’ bursary which total £7,750. She also gets a lone parents’ grant of £1,305. Her first term begins on 7 September 2020. Her student loan is divided over the weeks from Monday 7 September 2020 until Sunday 27 June 2021 (42 weeks).
The weekly loan income taken into account is:
£
Loan plus grants
9,055
Less disregards for books and equipment (£390) and travel (£303)
8,362
Divided by 42 weeks =
199.10
Less £10 weekly loan disregard =
189.10
£189.10 is taken into account as weekly income from her loan between 7 September 2020 and 27 June 2021. Her weekly income from her loan between 28 June and 5 September 2021 is nil.
 
1     IS Reg 66A(2)(c) IS Regs
ESA Reg 137(3)(e) ESA Regs
HB Reg 64(2)(d) HB Regs »
2     CIS/3734/2004 »
3     IS Reg 66A(2)(b) IS Regs
ESA Reg 137(3)(d) ESA Regs
HB Reg 64(2)(c) HB Regs »
4     Reg 2 HB Regs »
5     IS Reg 2(1) IS Regs
JSA Reg 1(3) JSA Regs
ESA Reg 2(1) ESA Regs »
Courses not starting in the autumn term
Your student loan is divided over the number of weeks starting from the first day of the first benefit week on or after the beginning of a standard academic year (see here), and ending on the last day of the last benefit week on or before the last day of the academic year, but excluding benefit weeks that fall entirely within the quarter that is taken by the DWP to be the longest vacation.1IS Reg 66A(2)(aa) IS Regs
ESA Reg 137(3)(b) ESA Regs
HB Reg 64(2)(b) HB Regs
Academic years and quarters
‘Academic years’ in this case are 12 months, beginning on 1 January, 1 April or 1 July for courses that begin in winter, spring or summer respectively.
‘Quarters’ are 1 January to 31 March, 1 April to 30 June, 1 July to 31 August, 1 September to 31 December.2IS Reg 66A(2)(aa) IS Regs
ESA Reg 137(3)(c) ESA Regs
HB Reg 64(2)(b) HB Regs
Example
Anya’s course begins on 4 January 2021. The main vacation is 21 June to 27 August 2021. She is claiming HB and the benefit week starts on a Monday. Her loan is divided over the weeks from Monday 4 January 2021 to Sunday 4 July 2021, and from Monday 30 August 2021 until Sunday 26 December 2021. From 5 July to 29 August 2021, her student loan income is nil for benefit purposes.
 
1     IS Reg 66A(2)(aa) IS Regs
ESA Reg 137(3)(b) ESA Regs
HB Reg 64(2)(b) HB Regs »
2     IS Reg 66A(2)(aa) IS Regs
ESA Reg 137(3)(c) ESA Regs
HB Reg 64(2)(b) HB Regs »
Courses lasting one year or less
Your loan is divided over the number of weeks from the first day of the first benefit week on or after the start of a standard academic year (see here) (or, if a course begins in August, from the first day of the first benefit week on or after the first day of the course) until the last day of the last benefit week on or before the last day of the course. The weekly amount that results is then taken into account from the point you actually start attending or undertaking the course.1IS Reg 66A(2)(a) IS Regs
ESA Reg 137(3)(a) ESA RegsHB Reg 64(2)(a) HB Regs
 
1     IS Reg 66A(2)(a) IS Regs
ESA Reg 137(3)(a) ESA RegsHB Reg 64(2)(a) HB Regs »
If you leave your course early
If you abandon your course early or are dismissed from it before you have had the final instalment of your student loan in that academic year, the loan continues to be taken into account up until the day before you would have been due your next loan payment, or to the end of the quarter (see above) in which you left, whichever is earlier. This means that if your loan payments stop shortly after you leave the course, they are only taken into account (and affect any benefits) for a short period.
To calculate the amount of loan taken into account, start by working out the weekly amount of annual loan, with disregards for books, equipment and travel but without the £10 weekly disregard. Then, subtract this amount of weekly loan for the period from the start of the standard academic year (see here) to the day you left from the amount of loan (minus the £693 disregards) you have been paid so far. The result is then divided over the weeks from when you left to when your next instalment would have been due, or the end of the quarter, whichever is earlier.
 
Example: income support, jobseeker’s allowance and employment and support allowance
Nick abandons his course on 9 October 2020. He is in the second year of a three-year course. He gets a small amount of ESA during his course (which includes a severe disability premium). His benefit week starts on a Monday. In Nick’s case, he has already been paid £2,325 of his £7,750 loan/bursary by the date he leaves.
 
Step one: work out weekly amount of annual loan
£
Loan/bursary
7,750
Less disregards (£693) =
7,057
Divided by 42 weeks =
168.02
 
Step two: work out amount of annual loan before leaving the course
Multiply the weekly annual loan by the number of benefit weeks from the week after the one that includes the start of the standard academic year until the week before the one that includes the day Nick left the course.
£168.02 x 4 weeks (7 September to 4 October) = £672.08
Step three: work out amount of loan ‘left over’ since leaving the course
To do this, add the monthly loan instalments paid or due before the date Nick left his course, deduct disregards, and deduct the annual loan worked out for the period before leaving.
 
£
 
Loan up to when left the course
2,325
Less disregards (£693) =
1,632
Amount of loan paid taken into account =
1,632
Deduct annual loan before leaving (£672.08) =
959.92
Step four: work out weekly amount of ‘leftover’ loan for the period it is taken into account
 Divide the total amount of leftover loan from Step three for the period since leaving the course by the number of weeks from when Nick left to the day before he would have been due his next loan payment, or the end of the quarter in which he left, whichever is earlier. Count from the benefit week that includes the day Nick left the course until the benefit week that includes the day before his next loan instalment would have been due had payments continued, or the benefit week that includes the last day of the last quarter for which an instalment was payable, whichever is earlier. In Nick’s case, his next loan instalment would have been due on 7 November, and this is before the end of the quarter (31 December).
£959.92 ÷ 5 (5 October to 8 November 2020) = £191.98
£191.98 a week is taken into account from 5 October 2020 until 8 November 2020.
Example: housing benefit
To work out how much loan to take into account for Nick’s HB claim (assuming he is not passported to HB from another means-tested benefit) after he has left his course, the calculation is slightly different to that for IS, income-based JSA and income-related ESA. In Step two above, instead of working out the number of benefit weeks up until the week before the one that includes the day Nick left the course, count up until the week that includes the one during which he left the course – ie, there is an extra week in this part of the calculation. Bear in mind that benefit weeks for HB always start on a Monday, and this may not be the same for IS, JSA or income-related ESA.
Step one: work out weekly amount of annual loan
 
£
 
Loan/bursary
7,750
Less disregards (£693) =
7,057
Divided by 42 weeks =
168.02
 
Step two: work out amount of annual loan before leaving the course
Multiply the weekly annual loan by the number of benefit weeks from the week after the one that includes the start of the standard academic year until the week that includes the day Nick left the course.
£168.02 x 5 (7 September to 11 October) = £840.10
Step three: work out amount of loan ‘left over’ since leaving the course
In the same way as in the example for IS/JSA/ESA above.
£
 
Loan up to when left the course
2,325
Less disregards (£693) =
1,632
Amount of loan to end of term taken into account =
1,632
Deduct annual loan before leaving, from Step two (£840.10) =
791.90
 
Step four: work out weekly amount of ‘leftover’ loan for the period it is taken into account
In the same way as in the example for IS/JSA/ESA above.
£791.90 ÷ 5 (5 October to 8 November 2020) = £158.38
£158.38 a week is taken into account from 5 October until 8 November 2020.
Note: if you repay the loan, it is still taken into account as income, according to the formula above.1CJSA/549/2003 You could, therefore, be refused IS, income-based JSA or income-related ESA despite having no other money to live on. However, if the Student Loans Company asks you to repay the loan rather than your repaying it voluntarily, DWP guidance tells decision makers to disregard the loan as income from the date of the request.2Vol 6, para 30470 DMG
 
1     CJSA/549/2003 »
2     Vol 6, para 30470 DMG »
Grants
To work out the weeks over which your grant is taken into account for means-tested benefits, first check whether there is a specific rule for that type of grant or whether the standard rule applies.
The standard rule for grants
If the standard rule applies, the grant is taken into account from:1IS Regs 61, definition of ‘period of study’, and 62(3) IS Regs
ESA Regs 131(1), definition of ‘period of study’, and 132(4) ESA RegsHB Regs 53, definition of ‘period of study’, and 59(5) HB Regs
    •the first day of the first benefit week (see here) on or after the start of the course in the first or only year; or
    •the first day of the first benefit week on or after that year’s start for your course if this is not your first year;
until:
    •the last day of the last benefit week that ends on or before the day before the summer vacation if the course continues after the summer; or
    •the last day of the last benefit week on or before the last day of the final academic term in the final year or on a course lasting a year or less.
The standard rule applies if your grant income is ‘attributable’ to those weeks. Even though you may be paid your grant monthly, if your grant has been awarded for the whole academic year or length of study, it should be taken into account in this way. You may need to ask your college for a statement showing your annual grant entitlement. This statement should break down the grant into the different allowances so that the DWP can apply the correct disregards when working out how much benefit you should get.
If your grant has not been awarded for the whole academic year or length of study, it is taken into account over the period for which it is payable, from the first day of the first benefit week on or after the start of the period for which the grant is payable until the last day of the last benefit week on or before the last day of that period.2IS Reg 62(3)(b) IS Regs
ESA Reg 132(4)(b) ESA RegsHB Reg 59(5)(b) HB Regs
 
1     IS Regs 61, definition of ‘period of study’, and 62(3) IS Regs
ESA Regs 131(1), definition of ‘period of study’, and 132(4) ESA RegsHB Regs 53, definition of ‘period of study’, and 59(5) HB Regs »
2     IS Reg 62(3)(b) IS Regs
ESA Reg 132(4)(b) ESA RegsHB Reg 59(5)(b) HB Regs »
Higher education grants
For higher education students, the dependants’ grant and lone parents’ grant (unless it is disregarded) are taken into account over the same period as the student loan if you have a student loan or you are eligible for one.1IS Reg 62(3B) IS Regs
ESA Reg 132(6) ESA Regs
HB Reg 59(7) HB Regs This is the case even though the Student Awards Agency Scotland guide says that such grants cover 52 weeks.
 
1     IS Reg 62(3B) IS Regs
ESA Reg 132(6) ESA Regs
HB Reg 59(7) HB Regs »
Nursing and midwifery bursaries
Your bursary, dependants’ allowance and single parents’ allowance (unless it is disregarded), if assessed for study throughout the calendar year, are taken into account for the number of benefit weeks within the full calendar year. Otherwise, the award is taken into account under the standard rule for grants (see here).
Further education grants
Your bursary is only taken into account as income during the academic year. This means that if you are refused benefit during the academic year because your income is too high, you may qualify during the summer vacation if your course lasts more than a year.
The bursary maintenance allowance and dependants’ allowance are taken into account under the standard rule for grants (see here).
Example: one-year course
Salome is on a one-year course, starting on 10 August 2020 and running until 4 June 2021. She gets a bursary maintenance allowance of £4,580.79 for the year. She is getting HB, so her benefit week begins on a Monday. Her allowance is taken into account from Monday 10 August 2020 until Sunday 30 May 2021 (42 weeks). The weekly amount taken into account over that period is:
£
Total grants for the year
4,580.79
Less disregards for books and equipment (£390) and travel (£303)
3,887.79
Divided by 42 weeks =
92.57
£92.57 a week is taken into account as income for HB from 10 August 2020 to 30 May 2021.
Postgraduate funding
A postgraduate award that is assessed for study throughout the calendar year is taken into account for the number of benefit weeks in the full calendar year.1IS Regs 61, definition of ‘period of study’, and 62(3)(a) IS Regs
ESA Regs 131(1), definition of ‘period of study’, and 132(4)(a) ESA Regs
HB Regs 53, definition of ‘period of study’, and 59(5)(a) HB Regs Otherwise, the award is taken into account under the standard rule for grants (see here).
Postgraduate student loans are taken into account under the standard rule for loans (see here). Students on a Professional Graduate Diploma in Education course may get the same student loan and grants as undergraduates, and these are treated in the same way as undergraduate loans and grants.
 
1     IS Regs 61, definition of ‘period of study’, and 62(3)(a) IS Regs
ESA Regs 131(1), definition of ‘period of study’, and 132(4)(a) ESA Regs
HB Regs 53, definition of ‘period of study’, and 59(5)(a) HB Regs »
If you leave your course early
For IS, income-related ESA and income-based JSA, if you abandon your course or get dismissed from it, your grant continues to be taken into account, calculated as though you were still a student, until the end of term or vacation in which you stop being a full-time student or, if earlier, until you repay the grant or the period for which the grant is payable ends.1IS Reg 29(2B) IS Regs
JSA Reg 94(2B) JSA Regs
ESA Reg 91(4) ESA Regs
For HB, your grant is not taken into account as if you were still a student. Instead, it is taken into account until the grant provider asks you to repay it and, until then, should be calculated over an appropriate period.2Leeves v Chief Adjudication Officer, reported as R(IS) 5/99; reg 31(1) HB Regs Arguably, your grant should only be taken into account as income until the end of the period your last instalment was meant to cover.
 
1     IS Reg 29(2B) IS Regs
JSA Reg 94(2B) JSA Regs
ESA Reg 91(4) ESA Regs »
2     Leeves v Chief Adjudication Officer, reported as R(IS) 5/99; reg 31(1) HB Regs  »