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 is 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 last week of the course or the start of the long vacation falls;
•in any assessment periods that fall 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. In each assessment period, £110 of student income is disregarded.4Reg 71 UC Regs Examples
Laura has a five-year-old daughter and is single. She starts a full-time degree course at her local university in Liverpool. Year one of her course runs from 26 September 2022 to 12 May 2023. Her assessment periods run from the 3rd of the month to the 2nd of the following month. Laura gets a tuition fee loan of £9,250, a loan for living costs of £6,958, a special support element of £4,106, a parents’ learning allowance of £1,863 and a childcare grant of £3,900. She also receives child benefit of £21.80 a week.
Step one Laura’s tuition fee loan, special support element, parents’ learning allowance and childcare grants are disregarded, as well as her child benefit.
Step two Her loan for living costs counts as income over eight assessment periods in the first year of her course (from 3 September 2022 to 2 May 2023).
Step three £6,958 ÷ 8 = £869.75
Step four £110 per assessment period is ignored. £869.75 - £110 = £759.75
Step five She has no other income. Laura’s UC is calculated on student income of £759.75 a month from 3 September 2022 to 2 May 2023. From 3 May 2023, the monthly income from her student funding is nil. Laura’s next UC payment in June will be based on £0 student funding.
Paula is 27, has a seven year old son and is single. She is undertaking a full-time access to higher education course in Plymouth. Her course runs from 5 September 2022 to 19 May 2023. Her assessment periods run from the 14th of the month to the 13th of the following month. She has taken out an advanced learner loan of £1,700 to pay for her course. She also receives £700 over the year from the loan bursary fund for childcare.
Both her loan and her bursary payment are disregarded, although she must provide evidence that the bursary payment has been made for childcare, not general costs. Her student income over the year is £0.
Nadiya is a lone parent with one child. She is undertaking a master’s course in Hull. Her course runs for one year between 26 September 2022 to 9 June 2023. Her assessment periods run from the 8th of the month to the 7th of the following month. Nadiya receives a postgraduate loan for a master’s degree of £11,836. She also receives child benefit of £21.80 a week.
Step one 70 per cent of Nadiya’s loan is disregarded, as well as her child benefit.
Step two The remaining loan counts as income over nine assessment periods in the first year of her course (from 7 September 2022 to 6 June 2023).
Step three £3,550.80 ÷ 9 = £394.53
Step four £110 per assessment period is disregarded. £394.53 - £110 = £284.53
Step five She has no other income. Nadiya’s UC is calculated on student income of £284.53 a month from 7 September 2022 to 6 June 2023. From 7 June 2023, the income from her student funding is nil. Nadiya’s next UC payment in June will be based on £0 student funding.