2. Grants and loans
Most student grants and loans are ignored in the tax credit assessment except for the following, which are taken into account:1Reg 8 TC(DCI) Regs •dependants’ grant for adults;
•dependants’ grant for children;
•lone parents’ grant.2Reg 8 TC(DCI) Regs refers only to a ‘dependants’ grant’. However, HMRC’s intention seems to be to count the lone parents’ grant also.
The following grants and loans are disregarded.
Higher education (HE):
•tuition fees;
•postgraduate tuition fee loan;
•student loan;
•lone parents’ childcare grant;
•care-experienced students’ bursary;
•care-experienced accommodation grant;
•disabled students’ allowance;
•travel expenses;
•young students’ bursary;
•independent students’ bursary;
•childcare fund;
•discretionary funds;
•nursing and midwifery student bursary.
Further education (FE):
•bursary maintenance allowance;
•care-experienced bursary maintenance allowance;
•education maintenance allowance;
•additional support needs for learning allowance;
•study expenses allowance;
•travel expenses allowance;
•lone parents’ childcare grant;
•FE discretionary fund;
•childcare fund.
Any scholarship, exhibition, bursary or any other similar educational endowment is ignored if you are receiving full-time instruction (FE or HE) at an educational institution.3Reg 9 TC(DCI) Regs A stipend is also ignored if it is not awarded in relation to the student being a holder of an ‘office’ or as remuneration for employment.4gov.uk/hmrc-internal-manuals/employment-income-manual/eim06210 A professional and career development loan is disregarded, except for any amount applied for or paid in respect of living expenses for the period supported by the loan.5Reg 19(c) Table 8 para 2 TC(DCI) Regs Example
Lauren is an undergraduate. She has one child aged 13. Her income for 2020/21 is:
– student loan;
– lone parents’ grant;
- independent students’ bursary;
– child benefit.
The student loan, independent students’ bursary and child benefit are ignored for child tax credit (CTC). The lone parents’ grant counts as income. Because this is less than the threshold of £16,385, Lauren is entitled to maximum CTC.