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Student Support and Benefits Handbook 2021/22

Chapter 22: How income affects means-tested benefits

This chapter covers:

1. Working out your income (here)

2. Grants and loans (here)

3. Dividing student income throughout the year (here)

4. Discretionary funds and other payments (here)

5. Earnings (here)

6. Benefits and tax credits (here)

7. Maintenance (here)

8. Savings and capital (here)

This chapter explains how your weekly income affects your entitlement to income support, income-based jobseeker’s allowance, income-related employment and support allowance and housing benefit. For information on how income affects universal credit, see Chapter 21. See Chapter 23 for how your income is assessed for tax credits and Chapter 24 for health benefits.

Basic facts

– Student loans for living costs are normally divided over 42 or 43 weeks from the beginning of September to the end of June and taken into account as income for means-tested benefits during that period. If your income is too high, you do not get income support (IS), income-based jobseeker’s allowance or income-related employment and support allowance during those weeks, and your housing benefit (HB) is reduced.

– Student loans for living costs are normally not taken into account as income for means-tested benefits from around the end of June until the beginning of September. You may be able to get IS or more HB during these months, even if your income was too high during the academic year.

– Some student support does not affect the amount of means-tested benefits you can receive.

1. Working out your income

The way that student income is taken into account for income support (IS), income-based jobseeker’s allowance (JSA), income-related employment and support allowance (ESA) and housing benefit (HB) is essentially the same. Chapters 10, 12 and 13 outline the ESA, IS and HB assessments step by step. This chapter explains how much weekly income counts in these assessments.

Note: if you or your partner have reached pension age (pension age reached 66 in October 2020) and are not getting IS or income-based JSA, your student support is ignored as income for HB.

 

 

Step one	Add together the annual income from grants and loans.
	Add together the annual amount of any student grants and/or loans for living costs, ignoring elements that are wholly disregarded.
Step two	Apply annual disregards.
	From the total annual grants and loans for living costs, deduct any disregarded amounts for books, equipment and travel.
Step three	Divide income into a weekly amount.
	Divide the annual amount of grants and loans for living costs by the number of benefit weeks in the period over which the grant and loan are counted as income for benefit purposes.
Step four	Deduct any weekly disregard.
	If you have a student loan for living costs, deduct £10 a week – this is the weekly disregard.
Step five	Add other income to the weekly amount.
	Add together any other weekly income – eg, from hardship funds (here), earnings (here), tariff income from capital (here), and benefits and tax credits (here) – ignoring any amount that is disregarded. This total, added to the weekly grant and loan total in Step four, is the amount of income used in the benefit assessment.

 

If you want to work out benefit entitlement during the long vacation, here explains when the long vacation starts and finishes for benefit purposes – ie, when your student loan or grant counts as nil income. You should then total on a weekly basis any other income you have over the vacation.

2. Grants and loans

Grants

In general, grants intended for living costs are taken into account as income, and grants for other costs (such as books, travel, equipment, childcare or course-related support for disabilities) are disregarded. For the way that hardship funds are treated, see here.

If you are a full-time undergraduate and receive a special support grant, this is disregarded as it is paid for course-related costs.1IS Reg 62(2) IS Regs
JSA Reg 131(2) JSA Regs
ESA Reg 132(2) ESA Regs
HB Reg 59(2) HB Regs
See also para 30326 DMG If you receive a maintenance grant (eg, if you are the partner of a jobseeker’s allowance (JSA) or income support (IS) claimant), this is taken into account in full as it is paid for living costs.

If you are not eligible for a student loan, deduct from your grant the following disregarded amounts:

•£390 for books and equipment;
•£303 for travel.

 

1     IS Reg 62(2) IS Regs
JSA Reg 131(2) JSA Regs
ESA Reg 132(2) ESA Regs
HB Reg 59(2) HB Regs
See also para 30326 DMG »

Higher education grants

The following higher education grants are completely disregarded:

•grant for tuition fees;1IS Reg 62(2)(a) IS Regs
JSA Reg 131(2)(a) JSA Regs
ESA Reg 132(2)(a) ESA Regs
HB Reg 59(2)(a) HB Regs
•special support grant for full-time undergraduate students;2IS Reg 62(2) IS Regs
JSA Reg 131(2) JSA Regs
ESA Reg 132(2)(2) ESA Regs
HB Reg 59(2) HB Regs
See also para 30329 DMG
•special support element of the maintenance grant for 2018 cohort Welsh undergraduates;
•childcare grant;3IS Reg 62(2)(j) IS Regs
JSA Reg 131(2)(i) JSA Regs
ESA Reg 132(2)(i) ESA Regs
HB Reg 59(2)(h) HB Regs
•child dependants allowance;4IS Reg 62(2)(j) IS RegsJSA Reg 131(2)(i) JSA RegsESA Reg 132(2)(i) ESA RegsHB Reg 59(2)(h) HB Regs
•disabled students’ allowance;5IS Reg 62(2)(c) IS Regs
JSA Reg 131(2)(b) JSA Regs
ESA Reg 132(2)(b) ESA Regs
HB Reg 59(2)(b) HB Regs
•parents’ learning allowance;
•travel expenses;6IS Reg 62(2)(h) IS Regs
JSA Reg 131(2)(g) JSA Regs
ESA Reg 132(2)(g) ESA Regs
HB Reg 59(2)(g) HB Regs
•course costs grant for part-time undergraduate students;7IS Reg 62(2)(g) and (h) IS Regs
JSA Reg 131(2)(f) and (g) JSA Regs
ESA Reg 132(2)(f) and (g) ESA Regs
HB Reg 59(2)(f) and (g) HB Regs
•institutional bursaries paid for anything other than living costs.8IS Reg 62(2) IS Regs
JSA Reg 131(2) JSA Regs
ESA Reg 132(2)(b) ESA Regs
HB Reg 59(2) HB Regs
See also para 30330 DMG

The following grants are taken into account:

•maintenance grant for full-time undergraduate students assessed in England and Northern Ireland;
•Welsh government learning grant for students in Wales (pre-2018 students);
•adult dependants’ grant;
•institutional bursaries paid for living costs.

Note: at the time of writing, the treatment of the maintenance grants available to undergraduate students in Wales starting on or after 1 September 2018 (‘2018 cohort students’) was not set out in regulations. However, in practice the ‘special support element’ of the first £5,161 of any maintenance grant paid (see here) is diregarded, while any maintenance grant above this level is taken into account, subject to the normal disregards. See CPAG’s Welfare Rights Bulletin for updates.

 

1     IS Reg 62(2)(a) IS Regs
JSA Reg 131(2)(a) JSA Regs
ESA Reg 132(2)(a) ESA Regs
HB Reg 59(2)(a) HB Regs »

2     IS Reg 62(2) IS Regs
JSA Reg 131(2) JSA Regs
ESA Reg 132(2)(2) ESA Regs
HB Reg 59(2) HB Regs
See also para 30329 DMG »

3     IS Reg 62(2)(j) IS Regs
JSA Reg 131(2)(i) JSA Regs
ESA Reg 132(2)(i) ESA Regs
HB Reg 59(2)(h) HB Regs »

4     IS Reg 62(2)(j) IS RegsJSA Reg 131(2)(i) JSA RegsESA Reg 132(2)(i) ESA RegsHB Reg 59(2)(h) HB Regs »

5     IS Reg 62(2)(c) IS Regs
JSA Reg 131(2)(b) JSA Regs
ESA Reg 132(2)(b) ESA Regs
HB Reg 59(2)(b) HB Regs »

6     IS Reg 62(2)(h) IS Regs
JSA Reg 131(2)(g) JSA Regs
ESA Reg 132(2)(g) ESA Regs
HB Reg 59(2)(g) HB Regs »

7     IS Reg 62(2)(g) and (h) IS Regs
JSA Reg 131(2)(f) and (g) JSA Regs
ESA Reg 132(2)(f) and (g) ESA Regs
HB Reg 59(2)(f) and (g) HB Regs »

8     IS Reg 62(2) IS Regs
JSA Reg 131(2) JSA Regs
ESA Reg 132(2)(b) ESA Regs
HB Reg 59(2) HB Regs
See also para 30330 DMG »

Healthcare student allowances

The following grants are taken into account:

•means-tested NHS bursary for degree-level healthcare courses in England and Wales;
•the non-means-tested NHS training grants for healthcare students who started their course on or after 1 August 2017 in England;
•means-tested Department of Health (DoH) bursary for degree-level healthcare courses in Northern Ireland;
•non-means-tested DoH bursary for nursing and midwifery students in Northern Ireland;
•dependants’ allowances for healthcare students (for housing benefit and some existing IS, JSA and employment and support allowance (ESA) claimants with no child tax credit award);1Reg 59(6) HB Regs
•single parent addition.

The following grants are disregarded:

•parental support grants;
•childcare allowances;
•disabled students’ allowance;2IS Reg 62(2)(c) IS Regs
JSA Reg 131(2)(b) JSA Regs
ESA Reg 132(2)(b) ESA Regs
HB Reg 59(2)(b) HB Regs
•parents’ learning allowance;
•allowances for travel and accommodation expenses.3IS Reg 62(2)(h) IS Regs
JSA Reg 131(2) JSA Regs
ESA Reg 132(2) ESA Regs
HB Reg 59(2)(g) HB Regs

 

1     Reg 59(6) HB Regs »

2     IS Reg 62(2)(c) IS Regs
JSA Reg 131(2)(b) JSA Regs
ESA Reg 132(2)(b) ESA Regs
HB Reg 59(2)(b) HB Regs »

3     IS Reg 62(2)(h) IS Regs
JSA Reg 131(2) JSA Regs
ESA Reg 132(2) ESA Regs
HB Reg 59(2)(g) HB Regs »

Other grants for vocational courses

The following are taken into account:

•NHS social work student bursary in England;1paras 30121-25 DMG
•Social Care Wales social work student grant in Wales;
•DoH social work incentive bursary in Northern Ireland;
•initial teacher training incentive bursaries.2para 30131 DMG

The following are disregarded:

•travel expenses.

 

1     paras 30121-25 DMG »

2     para 30131 DMG »

Postgraduate grants

Postgraduate maintenance grants and dependants’ grants awarded by Student Finance Wales, a research council, or for postgraduate social work students, are taken into account in the same way as for undergraduates (see here). The following are disregarded:

•disabled students’ allowance;
•grants for tuition fees;
•grants for residential study away from your normal home;
•grants intended to meet the costs of books and equipment.

The new postgraduate bursaries in Wales (see here) are intended for course costs. Make sure your university makes it clear what the bursary is paid for in any documentation, otherwise it may be taken into account as income.

Further education grants

The following further education grants are disregarded:

•education maintenance allowance;1IS Sch 9 para 11(a) IS Regs
JSA Sch 7 para 12 JSA Regs
ESA Sch 8 para 13 ESA Regs
HB Sch 5 para 11 HB Regs
•16–19 bursary fund payments;2IS Schs 9 para 11 and 10 para 63 IS Regs
JSA Schs 7 para 12 and 8 para 52 JSA Regs
ESA Schs 8 para 13 and 9 para 52 ESA Regs
HB Sch 5 para 11 HB Regs
•Care to Learn grants paid for childcare costs;
•childcare bursaries paid through the discretionary support funds;
•residential bursaries paid through the discretionary support funds (IS/JSA/ESA only);
•Welsh government learning grant for further education;
•the Northern Irish further education grant;
•additional grant allowances for disabled students.

The maintenance element of further education and advanced further education awards in Northern Ireland, subject to the standard disregard for travel, books and equipment, is taken into account in full.

 

1     IS Sch 9 para 11(a) IS Regs
JSA Sch 7 para 12 JSA Regs
ESA Sch 8 para 13 ESA Regs
HB Sch 5 para 11 HB Regs »

2     IS Schs 9 para 11 and 10 para 63 IS Regs
JSA Schs 7 para 12 and 8 para 52 JSA Regs
ESA Schs 8 para 13 and 9 para 52 ESA Regs
HB Sch 5 para 11 HB Regs »

Student loans

Student loan for fees

Loans for fees are disregarded.1IS Reg 66C IS Regs
JSA Reg 136B JSA Regs
ESA Reg 139 ESA Regs
HB Reg 64A HB Regs

 

1     IS Reg 66C IS Regs
JSA Reg 136B JSA Regs
ESA Reg 139 ESA Regs
HB Reg 64A HB Regs »

Student loan for living costs

You should include in the student loan:

•the maximum loan for which you are eligible (excluding any special support element - see below). This is taken into account as your income whether or not you apply for it;1IS Reg 66A(3) and (4) IS Regs
JSA Reg 136(5) JSA Regs
ESA Reg 137(5) ESA Regs
HB Reg 64(3) and (4) HB Regs
•the assessed contribution from a parent or partner, whether or not you receive it. For IS and income-related ESA, however, if you are a lone parent or a disabled student, only include contributions that are actually paid;2IS Reg 66(A)(4)(a) IS Regs
ESA Reg 137(5)(a) ESA Regs
HB Reg 64(4) HB Regs
•any payments for extra weeks of attendance.

Deduct from the annual student loan £390 for books and equipment and £303 for travel.3IS Reg 64(5) IS Regs
JSA Reg 136(5) JSA Regs
ESA Reg 139(6) ESA Regs
HB Reg 64(5) HB Regs There is a further disregard of £10 a week that applies once the student loan has been divided into the relevant weekly amount (see here).

If you are a full-time undergraduate or PGCE student assessed for support in England and receive a special support element, this is disregarded as it is paid for course-related costs.4IS Reg 66D IS RegsJSA Reg 136C JSA RegsESA Reg 139A ESA RegsHB Reg 64B HB Regs The standard student loan for living costs for which you are eligible is taken into account under the normal rules. If your loan entitlement is reduced because of a previous overpayment, only the amount of loan paid in the academic year being assessed should be taken into account, not the notional maximum entitlement.5IS Reg 66A(3) and (4) IS Regs
JSA Reg 136(5) JSA Regs
ESA Reg 137(5) ESA Regs
HB Reg 64(3) and (4) HB Regs

Note: at the time of writing, the treatment of part-time undergraduate loans for living costs in England and the new arrangements for undergraduates in Wales had not been made explicit in regulations. However, in practice, loans for part-time students are treated in the same way as loans for full-time students, with any special support element disregarded. Welsh loans are treated in the same way as loans in England. See CPAG’s Welfare Rights Bulletin for updates.

 

1     IS Reg 66A(3) and (4) IS Regs
JSA Reg 136(5) JSA Regs
ESA Reg 137(5) ESA Regs
HB Reg 64(3) and (4) HB Regs »

2     IS Reg 66(A)(4)(a) IS Regs
ESA Reg 137(5)(a) ESA Regs
HB Reg 64(4) HB Regs »

3     IS Reg 64(5) IS Regs
JSA Reg 136(5) JSA Regs
ESA Reg 139(6) ESA Regs
HB Reg 64(5) HB Regs »

4     IS Reg 66D IS RegsJSA Reg 136C JSA RegsESA Reg 139A ESA RegsHB Reg 64B HB Regs  »

5     IS Reg 66A(3) and (4) IS Regs
JSA Reg 136(5) JSA Regs
ESA Reg 137(5) ESA Regs
HB Reg 64(3) and (4) HB Regs »

Postgraduate loans

Postgraduate loans for master’s or doctoral degrees in England or Wales (see here) are paid for both tuition and living costs support, and you can decide how to allocate it. A figure equal to 30 per cent of the maximum loan to which you are entitled is therefore used when working out your income. This amount is then taken into account in the same way as undergraduate student loans for living costs (see above).1IS Reg 66A(4A) IS RegsJSA Reg 136(4A) JSA RegsESA Reg 13 ESA RegsHB Reg 64(4A) HB Regs

Your income is assessed using the maximum loan for which you are eligible, whether or not you apply for it. Make sure the DWP does not take into account any amount of loan if you are not eligible for one (eg, if you already hold a master’s level qualification) and are self-funding.

 

1     IS Reg 66A(4A) IS RegsJSA Reg 136(4A) JSA RegsESA Reg 13 ESA RegsHB Reg 64(4A) HB Regs »

Grants and loans checklist

 

 

Student support	Treatment
Further education income
16–19 bursary fund	Disregarded
Advanced learner loan	Disregarded
Care to Learn grant	Disregarded
Dance and Drama Awards	Any element for tuition ignored; maintenance grant taken into account except: – £309 a year for books and equipment; – £303 a year for travel
Discretionary or learner support funds/Financial Contingency Fund/hardship funds payment	Taken into account if paid for basic living costs regularly; disregarded if paid for other items
Education maintenance allowance	Disregarded
Further education grant (Northern Ireland)	Taken into account except:   – £390 a year for books and equipment;   – £303 a year for travel
Travel expenses allowance	Disregarded
Vulnerable student bursary (England)	Disregarded
Welsh government learning grant	Disregarded
Undergraduate income
Adult dependant’s grant	Taken into account in full
Base grant (Wales)	Taken into account in full
Childcare grant	Disregarded
Disabled students’ allowance	Disregarded
Hardship funds	Taken into account if paid for basic living costs regularly (as capital if not regular payments); disregarded if paid for other items
Institutional bursaries or scholarships	Tuition and course cost payments disregarded; payments for living costs taken into account
Maintenance grants	Taken into account in full
NHS childcare allowance	Disregarded
NHS dependants’ allowance	Taken into account
NHS healthcare/nursing and midwifery bursary	Taken into account except: – £390 a year for books and equipment; – £303 a year for travel
NHS parental support grant	Disregarded
NHS training grant	Taken into account
Parents’ learning allowance	Disregarded
Part-time students’ grant for course costs	Usually disregarded (as it is less than the general books/equipment and travel disregards)
Part-time students’ grant for tuition fees	Disregarded
Part-time students’ loan for living costs	Taken into account except: –£390 a year for books and equipment; – £303 a year for travel; – £10 a week
Social work bursary (England and Wales)	Any element for non-living costs, such as travel or tuition fee costs, disregarded; remainder taken into account in full
Social work bursary (Northern Ireland)	Taken into account in full except any element for travel costs
Special support grant	Disregarded
Special support loan element	Disregarded
Special support payment (Wales)	Disregarded
Student loan for living costs (including any means-tested element where appropriate)	Taken into account except:   – £390 a year for books and equipment;   – £303 a year for travel
Teaching training bursary	Taken into account in full
Travelling or accommodation expenses	Disregarded
Tuition fee grant (Wales)	Disregarded
Tuition fee loan	Disregarded
Welsh government learning grant (pre-2018 students)	Taken into account in full
Welsh maintenance grant (2018 cohort students)	Any amount after first £5,161 taken into account
Postgraduate income
Books and equipment expenses	Disregarded
Postgraduate bursary (Wales)	Disregarded if paid for course costs, otherwise taken into account except: - £390 a year for books and equipment; - £303 a year for travel (unless these amounts have been disregarded from any postgraduate loan)
Postgraduate loan for doctoral degrees	30 per cent of loan taken into account except: - £390 a year for books and equipment; - £303 a year for travel; - £10 a week
Postgraduate loan for master’s degrees in England or Wales	30 per cent of loan taken into account except:   – £390 a year for books and equipment;   – £303 a year for travel;   – £10 a week
Postgraduate tuition fee loan (Northern Ireland)	Disregarded
Research council studentship or scholarship (including British Academy)	Taken into account except:   – £390 a year for books and equipment;   – £303 a year for travel
Social work bursary	Taken into account in full
Supplementary grants	As for undergraduate income
Teacher training bursary/grant/scholarship/salary	Taken into account in full

3. Dividing student income throughout the year

The annual amount of your loan and grant is divided over the number of weeks in, usually, a standard academic year to arrive at the weekly amount that is used to calculate your income support (IS), income-based jobseeker’s allowance (JSA), income-related employment and support allowance (ESA) and housing benefit (HB). Rules specify the weeks over which the loan and grant are taken into account.

If your loan covers extra weeks of study beyond the usual academic year (a long courses loan), the extra weeks loan is added to the rest of the loan. However, it does not extend the number of weeks over which your loan is taken into account for benefit purposes.

Grants

Higher education maintenance grant

The higher education maintenance grant for full-time undergraduate students who do not have a benefits claim in their own right, and the adult dependants’ grant paid by the Department for Education, the Welsh government or the Department for the Economy in Northern Ireland, are taken into account over the duration of the course, whether it comprises 52 weeks or fewer. They are treated as income over the same period as the student loan, if you have one or are eligible for one.1IS Reg 62(3B) IS Regs
JSA Reg 131(5A) JSA Regs
ESA Reg 132(6) ESA Regs
HB Reg 59(7) HB Regs This is the case even though government guidance says that such grants cover 52 weeks.

Example

Rob lives in Wales and receives a student loan of £4,675 and a maintenance grant of £8,100 to do his full-time undergraduate degree in Cardiff. This is his second year and his first term begins on Monday 27 September 2021. Rob lives with his partner, Dylan, and their two children. Dylan is getting JSA and his benefit week starts on a Thursday. The special support element (£5,161) of Rob’s grant is ignored, while Rob’s student loan and the remainder of Rob’s maintenance grant (£2,939) are taken into account when working out Dylan’s JSA. His student loan and maintenance grant are divided over the 43 weeks from Thursday 2 September 2021 to Wednesday 29 June 2022. From Thursday 2 September 2021 to Wednesday 29 June 2022, his student loan and grant income are included in the calculation to determine the amount of JSA Dylan receives. From Thursday 30 June until Wednesday 31 August 2022, his student loan and grant income is nil again for benefit purposes.

 

1     IS Reg 62(3B) IS Regs
JSA Reg 131(5A) JSA Regs
ESA Reg 132(6) ESA Regs
HB Reg 59(7) HB Regs »

Healthcare student bursaries and the NHS training grant

There are two types of bursary available to students on healthcare courses. A non-means-tested bursary is available in Northern Ireland for nursing and midwifery students on both degree and diploma courses. If you are studying for a degree in England, Wales or another healthcare course in Northern Ireland, a means-tested bursary and a non-means-tested grant are available (although most new healthcare students in England must now apply for support from Student Finance England - see here). In addition, you can receive a non-means-tested reduced-rate loan.

Dependants’ grants and other allowances may be means tested (see Chapter 6).

The income from both types of bursary, dependants’ allowance and single parent addition are taken into account. As these are paid in monthly instalments, they are taken into account over 52 weeks. The reduced-rate loan should be treated over the same period as other student loans. The NHS childcare grant is disregarded in full.

The NHS training grant for healthcare students in England (see here) is paid in three termly instalments, so should be taken into account over the duration of the course (in the same way as for other higher education maintenance grants – see above), whether it comprises 52 weeks or fewer. The parental support grant should be disregarded in full.

Social work bursaries

Social work bursaries in England and Wales are taken into account for the period they are paid. In England, this is 52 weeks.

In England, the element paid for travelling expenses should be disregarded.1IS Reg 62(2)(h) IS Regs
JSA Reg 131(2)(g) JSA Regs
ESA Reg 132(3)(g) ESA Regs
HB Reg 59(2)(g) HB Regs However, this is not usually specifically identified, so the full bursary may be taken into account. If this affects you, speak to an adviser for assistance.

Any amount paid for tuition fees is also disregarded.

In Northern Ireland, the social work incentive bursary is taken into account in full, but any element paid for travel costs is disregarded.

 

1     IS Reg 62(2)(h) IS Regs
JSA Reg 131(2)(g) JSA Regs
ESA Reg 132(3)(g) ESA Regs
HB Reg 59(2)(g) HB Regs »

Postgraduate grants

A postgraduate award that is assessed for study throughout the calendar year is taken into account for the number of benefit weeks within the full calendar year.1IS Regs 61 and 62(3)(a) IS Regs
JSA Regs 130 and 131(4)(a) JSA Regs
ESA Regs 131 and 132(4)(a) ESA Regs
HB Regs 53 and 59(5)(a) HB Regs

Students on a PGCE (or PGDE) course may get the same student loan and grants as undergraduates, and these are treated in the same way as undergraduate loans and grants. Teacher training bursaries/salaries are treated as grants.

 

1     IS Regs 61 and 62(3)(a) IS Regs
JSA Regs 130 and 131(4)(a) JSA Regs
ESA Regs 131 and 132(4)(a) ESA Regs
HB Regs 53 and 59(5)(a) HB Regs »

If you leave your course early

For IS, income-based JSA and income-related ESA, if you abandon your course or are dismissed from it, your grant continues to be taken into account until the end of the 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 taken into account until the grant provider asks you to repay it.2Leeves v Chief Adjudication Officer, reported as R(IS) 5/99

 

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 »

Loan for living costs

For autumn term starters, 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 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 decreases in these months (unless you have other income – eg, earnings), you may be able to get benefit during the summer.

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
JSA Reg 136(2)(c) JSA Regs
ESA Reg 137(3)(e) ESA Regs
HB Reg 64(2)(d) HB Regs In 2021/22 this is 42 weeks for benefit weeks that begin on a Monday, Tuesday, Saturday or Sunday, and 43 weeks for benefit weeks that begin on a Wednesday, Thursday or Friday. 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 – ie, 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.

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 last day of the final term if it starts in August) until the end of the benefit week on or before the last day of the final academic term.2CIS/3734/2004

For HB, the start of the benefit week is a Monday. For IS, JSA and ESA, it depends on your national insurance number.

Example: first year higher education student in England

Jean is in her first year at university. She has one child aged four and is claiming HB and IS as a lone parent. She gets a loan of £9,250 for her fees, which is disregarded, and a student loan for living costs of £9,490 for studying in London, which is not. She also gets a special support element of £4,014, a parents’ learning allowance of £1,821 and a childcare grant of £100 a week, all of which are disregarded for IS and HB.

Her first term begins on Monday 27 September 2021. Her IS benefit week starts on a Monday. Her student loan is divided over the weeks from Monday 6 September 2021 until Sunday 26 June 2022 (42 weeks). However, as she is a first-year student, her loan is not taken into account until she starts her course on Monday 27 September. So, from Monday 6 September 2021 until Sunday 26 September 2021, her student loan income is not taken into account for benefit purposes. From Monday 27 September 2021 to Sunday 26 June 2022, her weekly student income is £199.45 for benefit purposes.

 

The weekly loan income taken into account is:

 

Loan

£9,490

 

 

Less disregards for books and equipment (£390) and travel (£303) = 8,797

Divided by 42 weeks = £209.42

Less £10 weekly loan disregard = £199.45

£199.45 is taken into account as weekly income from her loan between 27 September 2021 and 26 June 2022. She also receives £54.60 a week child tax credit, which brings her weekly income for HB purposes to £254.05.

Her IS applicable amount is £74.70 and her HB applicable amount is £143.30 a week. From Monday 27 September 2021 to Sunday 26 June 2022, she is not entitled to IS because her income is higher than the IS applicable amount; her HB is reduced by £71.99 a week – 65 per cent of the excess (see here). Jean cannot make a new claim for IS in June, but would be eligible for universal credit (UC). She should speak to an adviser who can help her determine if she should claim UC or remain on HB/CTC, as claiming UC would bring HB and CTC to an end.

 

Example: final year higher education student in Northern Ireland

Graham is in his final year. He is claiming ESA as a disabled student studying at Queen’s University, Belfast. He gets a student loan of £4,480.

His first term started on Monday 6 September 2021 and his final term ends on Friday 10 June 2022. His student loan is divided over the weeks from Monday 6 September 2021 until Sunday 5 June 2022 (39 weeks).

 

The weekly loan income taken into account is:

Loan £4,480

Less disregards for books and equipment (£390) and travel (£303) = 3,787

Divided by 39 weeks = £97.10

Less £10 weekly loan disregard = £87.10

£87.10 is taken into account as weekly income from his loan between 6 September 2021 and 5 June 2022.

Example: master’s student in England

Holly is a lone parent with a child aged two, and claiming HB. She is starting an MA course in Huddersfield. She gets a postgraduate student loan of £11,570, the maximum available. Only 30 per cent is taken into account (£3,471).

As the course only lasts one year, her loan is only taken into account from when she starts the course until the end of her final term. Her first term starts on Monday 4 October 2021 and her final term ends on Friday 10 June 2022. Her student loan is divided over the weeks from Monday 6 September 2021 until Sunday 5 June 2022 (39 weeks) but is only taken into account from Monday 4 October.

 

The weekly loan income taken into account is:

Loan £3,471

Less disregards for books and equipment (£390) and travel (£303) = 2,778

Divided by 39 weeks = £71.23

Less £10 weekly loan disregard = £61.23

£61.23 is taken into account as weekly income from her loan between 4 October 2021 and 5 June 2022.

 

1     IS Reg 66A(2)(c) IS Regs
JSA Reg 136(2)(c) JSA Regs
ESA Reg 137(3)(e) ESA Regs
HB Reg 64(2)(d) HB Regs »

2     CIS/3734/2004 »

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 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)(b) IS Regs
JSA Reg 136(2)(b) JSA Regs
ESA Reg 137(3)(d) ESA Regs
HB Reg 64(2)(d) HB Regs

Academic years

’Academic years’ are the 12 months beginning on 1 January, 1 April or 1 July for courses that begin in winter, spring or summer respectively.2IS Reg 66A(2)(aa) IS Regs
JSA Reg 136(2)(c) JSA Regs
ESA Reg 137(3)(e) ESA Regs
HB Reg 64(2)(b) HB Regs

’Quarters’ are 1 January to 31 March, 1 April to 30 June, 1 July to 31 August, 1 September to 31 December.3IS Reg 61(1) IS Regs
JSA Reg 136(2)(aa) JSA Regs
ESA Reg 137(3)(b) ESA Regs
HB Reg 53(1) HB Regs

 

Example

Madeleine’s course begins on 3 January 2022. The main vacation is 6 June to 26 August 2022. She is claiming HB and the benefit week starts on a Monday. Her loan is divided over the weeks from Monday 3 January 2022 to Sunday 3 July 2022, and from Monday 29 August 2022 until Sunday 25 December 2022. From 4 July to 28 August 2022, her student loan income is nil for benefit purposes.

 

1     IS Reg 66A(2)(b) IS Regs
JSA Reg 136(2)(b) JSA Regs
ESA Reg 137(3)(d) ESA Regs
HB Reg 64(2)(d) HB Regs »

2     IS Reg 66A(2)(aa) IS Regs
JSA Reg 136(2)(c) JSA Regs
ESA Reg 137(3)(e) ESA Regs
HB Reg 64(2)(b) HB Regs »

3     IS Reg 61(1) IS Regs
JSA Reg 136(2)(aa) JSA Regs
ESA Reg 137(3)(b) ESA Regs
HB Reg 53(1) 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 until the last day of the last benefit week on or before the last day of the final term. The academic year is taken to begin on 1 September, 1 January, 1 April or 1 July, depending on whether your course begins in the autumn, winter, spring or summer. The resulting weekly amount is then taken into account from the point you actually start attending or undertaking the course.

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 end of the term in which you leave. The end of term is taken to be the end of December if you leave in the autumn term, the end of March if you leave in the winter term, the end of June if you leave in the spring term and the end of August if you leave in the summer.

The amount of loan taken into account is that which remains from the loan that was paid from the start of the standard academic year (eg, 1 September for students whose courses begin in the autumn – see here) to the end of the term in which you left, having subtracted that part of the loan (including disregards for books, equipment and travel) that would have been treated as your weekly income in a normal benefits calculation up until the day you left.1IS Reg 66A(2)(aa) IS Regs
JSA Reg 136(2)(c) JSA Regs
ESA Reg 137(3)(e) ESA Regs
HB Reg 64(2)(b) HB Regs The example below illustrates how this amount is calculated.2IS Reg 40(3A) IS Regs
JSA Reg 103(5) JSA Regs
ESA Reg 104(4) ESA Regs
HB Reg 40(7) HB Regs

Example

Nick studies in Birmingham. He abandons his course on 1 November 2021. He is in the second year of a three-year course and is claiming HB. His benefit week starts on a Monday.

Work out weekly amount of annual loan

Loan £6,801

Less disregards (£693) = £6,108

Divided by 42 weeks = £145.43

Work out amount of loan prior to leaving the course

Multiply the weekly amount of annual loan by the number of benefit weeks from the week after the one that includes the start of the academic year until the end of the benefit week that includes the day Nick left the course.

Multiply weekly loan (£145.43) by nine weeks

(6 September to 7 November 2021) = £1,308.87

Work out amount of loan since leaving the course

To do this, add the loan instalments paid for the terms up to the one in which Nick left, deduct disregards and deduct the loan worked out for the period prior to leaving.

Loan up to end of term (33% x 6,801) = £2,244.33

Less disregards (£693) = £1,551.33

Deduct amount of loan prior to leaving (£1,308.87) = £242.46

Work out weekly amount of loan from leaving course to end of term

Divide the total amount of loan for the period since leaving the course by the number of weeks left in the term. Count from the benefit week that includes the day Nick left the course until the benefit week that includes the end of term – ie, end of December, March, June or August.

Divide £242.46 by eight weeks (1 November 2021 to 26 December 2021) = £30.31

£30.31 a week is taken into account from 1 November 2021 until 26 December 2021.

If you leave your course nearer to the end of term, this formula could result in there being no loan income taken into account for the remainder of the term. Note: if you repay the loan, it is nevertheless taken into account as income until the end of term.3See also HB/CTB Circular A31/2001 Part 6 and Annex D for guidance and a sample calculation, together with HB/CTB Circular A39/2001, para 19 So you could be refused benefit despite having no other money to live on. However, if your funder asks you to repay the loan rather than your repaying it voluntarily, guidance tells DWP decision makers to disregard the loan as income from the date of the request.4CJSA/549/2003

 

1     IS Reg 66A(2)(aa) IS Regs
JSA Reg 136(2)(c) JSA Regs
ESA Reg 137(3)(e) ESA Regs
HB Reg 64(2)(b) HB Regs »

2     IS Reg 40(3A) IS Regs
JSA Reg 103(5) JSA Regs
ESA Reg 104(4) ESA Regs
HB Reg 40(7) HB Regs »

3     See also HB/CTB Circular A31/2001 Part 6 and Annex D for guidance and a sample calculation, together with HB/CTB Circular A39/2001, para 19 »

4     CJSA/549/2003 »

4. Discretionary funds and other payments

Hardship funds

Discretionary funds paid by colleges and universities for course or living costs may be called hardship funds, the Access to Learning Fund (although this no longer exists, institutions may still refer to it), the Financial Contingency Fund or other discretionary support funds.1para 30305 DMG

Hardship funds are treated differently from student grants and loans. In general, if these funds are paid for course costs, they should be disregarded. If they are paid for living costs, they should be treated as capital if paid in a lump sum,2IS Reg 61 IS Regs
JSA Reg 130 JSA Regs
ESA Reg 131 ESA Regs
HB Reg 53 HB Regs or as income if paid regularly.3IS Reg 61(1) IS Regs
JSA Reg 130(1) JSA Regs
ESA Reg 131(1) ESA Regs
HB Reg 53(1) HB Regs Your learning provider should be able to give you a letter for the relevant benefit office explaining the purpose of the payment.

Payments from the 16–19 bursary fund in England are not taken into account when calculating entitlement to income-related benefits.4IS Reg 68 IS Regs
JSA Reg 138 JSA Regs
ESA Reg 142 ESA Regs
HB Reg 68 HB Regs Learning providers have also been sent guidance that any payments made on a regular basis from the fund should be clearly marked as being for course costs. You should receive a letter from your provider stating what payments are for to take to the benefits office.

Grants from further education funds specifically for childcare are disregarded altogether.5IS Reg 66B IS Regs
JSA Reg 136A JSA Regs
ESA Reg 138 ESA Regs
HB Reg 65 HB Regs

 

1     para 30305 DMG »

2     IS Reg 61 IS Regs
JSA Reg 130 JSA Regs
ESA Reg 131 ESA Regs
HB Reg 53 HB Regs »

3     IS Reg 61(1) IS Regs
JSA Reg 130(1) JSA Regs
ESA Reg 131(1) ESA Regs
HB Reg 53(1) HB Regs »

4     IS Reg 68 IS Regs
JSA Reg 138 JSA Regs
ESA Reg 142 ESA Regs
HB Reg 68 HB Regs »

5     IS Reg 66B IS Regs
JSA Reg 136A JSA Regs
ESA Reg 138 ESA Regs
HB Reg 65 HB Regs »

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), jobseeker’s allowance (JSA) or employment and support allowance (ESA), council tax or water charges.1IS Reg 41(6) IS RegsJSA Reg 104(5) JSA RegsESA Reg 105(4) ESA RegsHB Reg 41(4) HB Regs Although taken into account as capital, they only affect your benefit if they bring your capital above the £6,000 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’.

 

1     IS Reg 41(6) IS RegsJSA Reg 104(5) JSA RegsESA Reg 105(4) ESA RegsHB Reg 41(4) HB 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 ESA, council tax or water charges.1IS Reg 66B IS Regs
JSA Reg 136A JSA Regs
ESA Regs 2(1) and 138 ESA Regs
HB Regs 2(1) and 68(3) and (4) HB Regs Up to £20 a week is disregarded. You cannot get the £20 disregard in full as well as the full disregards available on a student loan, widowed parent’s allowance or war pensions (see here). If you get one of these other payments in addition to a hardship payment, your maximum weekly disregard is £20. For example, if you have a student loan and receive a war pension, £10 a week is disregarded from each. If you also receive regular payments from a hardship fund, these count in full as you have already used up your £20 disregard.

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

Regular payments from the 16–19 bursary fund should be disregarded regardless of their purpose, but colleges and other providers have also been given guidance to ensure that any regular payments from the fund are clearly identified as being for course costs, and so disregarded.

 

1     IS Reg 66B IS Regs
JSA Reg 136A JSA Regs
ESA Regs 2(1) and 138 ESA Regs
HB Regs 2(1) and 68(3) and (4) HB Regs »

Payments before a course starts or before a loan is paid

A payment from a hardship 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 is ignored as income, provided it is intended to tide you over until your loan is paid.

Institutional bursaries

Bursaries paid by institutions for living costs are treated as income over the period for which they are paid.

Voluntary or charitable payments

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

Professional studies loans

Any study-specific loans offered by banks or other lenders are always treated as income rather than capital, no matter how they are paid.1IS Reg 41(6) IS Regs
JSA Reg 104(5) JSA 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, JSA or ESA, council tax or water charges. Once the period of education supported by the loan is completed, the loan is disregarded altogether, whatever it was originally intended for.

 

1     IS Reg 41(6) IS Regs
JSA Reg 104(5) JSA Regs
ESA Reg 105(4) ESA Regs
HB Reg 41(4) HB Regs »

5. Earnings

Your earnings and the earnings of your partner are taken into account in the benefit assessment. It is your net weekly earnings that are taken into account – ie, after deducting:

•income tax;
•class 1 national insurance contributions;
•half of any contribution you make towards a personal or occupational pension.

Some of your earnings are disregarded. The highest disregard that applies in your circumstances is deducted:

•£25 for lone parents claiming housing benefit (HB) who are not claiming income support (IS), income-based jobseeker’s allowance (JSA) or income-related employment and support allowance (ESA);
•£20 for lone parents claiming IS, JSA or ESA;
•£20 for someone who gets a disability premium;
•£20 for someone who gets a carer premium;
•£20 for part-time firefighters and some other emergency auxiliaries;
•£10 for couples, whether one or both of you are working;
•£5 for single people.

For HB only, there is an additional disregard (£17.10) for some people working 16/30 hours a week.

For HB, childcare costs for registered childminders, nurseries and playschemes can be disregarded from earnings in some circumstances. Childcare costs of up to £175 a week for one child or £300 for two or more children are deducted from weekly earnings for:

•lone parents who are working;
•couples who are both working;
•couples, where one is working and one is incapacitated or in hospital or prison.

In each case, the work must be for 16 hours or more a week.

For full details of the way earnings are treated, see CPAG’s Welfare Benefits and Tax Credits Handbook.

6. Benefits and tax credits

Some benefits are taken into account in the assessment of income support (IS), income-based jobseeker’s allowance (JSA), income-related employment and support allowance (ESA) and housing benefit (HB), and others are ignored or partially ignored.

Benefits and tax credits taken into account in full include:

•child tax credit (CTC) for HB;
•carer’s allowance;
•contributory ESA;
•contribution-based JSA;
•incapacity benefit;
•most industrial injuries benefits;
•retirement pension;
•working tax credit.

Benefits and tax credits completely disregarded include:

•attendance allowance;
•child benefit;
•CTC for IS, JSA and income-related ESA;
•disability living allowance;
•personal independence payment;
•social fund payments.

Benefits and tax credits partly disregarded include:

•widowed parent’s allowance, which has £10 a week disregarded for IS, JSA and ESA, and £15 a week for HB (but you do not get this disregard if you already have £10 disregarded from a student loan or £20 disregarded from hardship fund payments).

7. Maintenance

For housing benefit, income support, jobseeker’s allowance and income-related employment and support allowance, child maintenance paid to you by a former partner or your child’s other parent is disregarded completely.

8. Savings and capital

There are limits on the amount of savings or capital you can have and still claim benefit. Some kinds of capital are not counted in the assessment. For details, see CPAG’s Welfare Benefits and Tax Credits Handbook.

•You cannot get income support, income-based jobseeker’s allowance, income-related employment and support allowance or housing benefit (HB) if your savings or other capital are above £16,000.
•If your capital is £6,000 or less, it does not affect your benefit at all.
•If your capital is between £6,000.01 and £16,000, you are treated as though you have income from this capital of £1 a week for every £250, or part of £250, between these limits. This is referred to as ’tariff income’. For example, if you have savings of £6,525, your tariff income is £3 a week.
•These limits are different if you or your partner have reached pension age (pension age reached 66 in October 2020). All your capital is ignored if you or your partner get pension credit guarantee credit. Otherwise, tariff income of £1 for each £500 or part of £500 between £10,000.01 and £16,000 is taken into account in the assessment of HB.