4. Discretionary funds and other payments

Discretionary funds

Discretionary funds are treated differently from student grants and loans. Discretionary funds include:1IS Reg 61 IS Regs
ESA Reg 131 ESA Regs
HB Reg 53 HB Regs
All Definition of ‘access funds’

•higher education (HE) discretionary fund;
•further education (FE) discretionary fund.

In general, if the payment is for certain living costs, it is taken into account in full if it counts as capital, or with up to a £20 a week disregard if it counts as income. If the payment is for other costs, it is disregarded. Ask your college for a letter saying what the payment is for and how it is paid.

A lump-sum payment counts as capital. Regular payments count as income.

The FE and HE childcare funds are disregarded.

 

1     IS Reg 61 IS Regs
ESA Reg 131 ESA Regs
HB Reg 53 HB Regs
All Definition of ‘access funds’ »

Lump-sum payments

Lump-sum payments are taken into account as capital if they are intended and used for food, ordinary clothing or footwear, household fuel, rent met by housing benefit (HB), housing costs met by income support (IS), income-related employment and support allowance (ESA) or jobseeker’s allowance (JSA), council tax or water charges.1IS Reg 68 IS Regs
ESA Reg 142 ESA Regs
HB Reg 68 HB Regs Payments for anything else are ignored for up to 52 weeks. Although taken into account as capital, such payments only affect your benefit if they bring your capital above the lower limit (see here). Payments for school uniforms or sports clothes or sports shoes are ignored, as these do not count as ‘ordinary clothing or footwear’.2IS Reg 68(4) IS Regs
ESA Reg 2 ESA Regs Payments for service charges other than fuel charges that HB does not meet are ignored. Payments for rent in excess of the amount that HB will meet are ignored – eg, if your rent is more than the maximum amount covered by HB (see here).

 

1     IS Reg 68 IS Regs
ESA Reg 142 ESA Regs
HB Reg 68 HB Regs »

2     IS Reg 68(4) IS Regs
ESA Reg 2 ESA Regs »

Regular payments

Regular payments are taken into account as income if they are intended and used for food, ordinary clothing or footwear, household fuel, rent met by HB, housing costs met by IS, JSA or income-related ESA, and council tax or water charges.1IS Reg 66B IS Regs
ESA Reg 138 ESA Regs
HB Reg 65 HB Regs However, up to £20 a week is disregarded. You cannot get the £20 disregard in full as well as the full weekly disregards available on a student loan (or on widowed parent’s allowance or war pensions). If you get one of these other payments as well as a discretionary payment, your maximum weekly disregard is £20.

For example, if you have a student loan and regular payments from the HE discretionary fund, £10 a week is disregarded from each.

Regular payments intended and used for anything else, such as childcare or travel expenses, are completely disregarded.

 

1     IS Reg 66B IS Regs
ESA Reg 138 ESA Regs
HB Reg 65 HB Regs »

Payments before a course starts or before a loan is paid

A payment from the discretionary fund made before the course starts is always ignored as income even if it is for living costs. A payment made before you get the first instalment of your student loan, if it is intended to tide you over until your loan is paid, is ignored as income.

Other payments

Voluntary or charitable payments

Regular voluntary or charitable payments are ignored for IS, JSA, income-related ESA and HB. If paid as a lump sum, the payment is taken into account as capital whatever it is intended for.

Professional and career development loans

Professional and career development loans are always treated as income, not capital, irrespective of how they are paid.1IS Reg 41(6) IS Regs
ESA Reg 105(4) ESA Regs
HB Reg 41(4) HB Regs The loan is taken into account if it is intended and used for food, ordinary clothing or footwear, household fuel, rent met by HB, housing costs met by IS, income-based JSA or income-related ESA, council tax or water charges.2IS Sch 9 para 13(2) IS Regs
ESA Sch 8 para 15(2) ESA Regs
HB Sch 5 para 13(2) HB Regs If it is paid for anything else (eg, tuition fees, books or travel), it is ignored. Once the period of education supported by the loan is completed, a loan that was previously taken into account is then disregarded.3IS Sch 9 para 13(1)(c) IS Regs
ESA Sch 8 para 15(1)(c) ESA Regs
HB Sch 5 para 13(1)(c) HB Regs

 

1     IS Reg 41(6) IS Regs
ESA Reg 105(4) ESA Regs
HB Reg 41(4) HB Regs »

2     IS Sch 9 para 13(2) IS Regs
ESA Sch 8 para 15(2) ESA Regs
HB Sch 5 para 13(2) HB Regs »

3     IS Sch 9 para 13(1)(c) IS Regs
ESA Sch 8 para 15(1)(c) ESA Regs
HB Sch 5 para 13(1)(c) HB Regs »

SDS Individual Training Account payments

The £200 payment is disregarded.1IS Regs 51(3)(a)(ii) or 62(2)(a) IS Regs
JSA Regs 113(3)(a)(ii) or 131(2)(a) JSA Regs
ESA Regs 107(3)(c) or 132(2)(a) ESA Regs
HB Regs 49(3)(b) or 59(2)(a) HB Regs

 

1     IS Regs 51(3)(a)(ii) or 62(2)(a) IS Regs
JSA Regs 113(3)(a)(ii) or 131(2)(a) JSA Regs
ESA Regs 107(3)(c) or 132(2)(a) ESA Regs
HB Regs 49(3)(b) or 59(2)(a) HB Regs »