Back to previous
Chapter 24: How income affects health benefits
This chapter explains how your weekly income affects your entitlement to health benefits. For information on how income affects universal credit, see Chapter 21. See also Chapter 22 for how your income is assessed for means-tested benefits and Chapter 23 for tax credits.
Basic facts
– The NHS low income scheme helps with health costs if your income is low enough.
– Student loans and most grants count as income.
– The exact amount of help you receive depends on the amount of excess weekly income (if any) you are assessed as having, once it is offset against a personal allowance and your housing costs.
1. Working out your income
The way that student income is taken into account for health benefits is broadly the same as for means-tested benefits (see Chapter 22).
Step one
Apply annual disregard.
From the student maintenance loan, deduct the disregarded amount of £693 for books, equipment and travel.
Step two
Divide income throughout the year.
Divide the annual amount of loan by 52 weeks, unless you are in the final or only year of your course, in which case you should divide by the number of weeks between the start and finish of your course.
Step three
Weekly disregard.
Unlike the means-tested benefits assessment, there is no weekly disregard of £10 on the student loan, unless you receive a premium in your applicable amount, an allowance because of deafness (separate to any disabled students’ allowance), or you are not a student but your partner is. If you come into any of these categories, disregard £10.
Step four
Add other income to weekly loan amount.
Add together any other weekly income (except for ’mandatory’ awards such as research council awards or non-means-tested NHS bursaries) – eg, from hardship funds (see here), earnings (see here), tariff income from capital (see here), and benefits and tax credits (see here) – ignoring any amount that is disregarded.
Step five
Divide mandatory grant income over 52 weeks.
Divide any mandatory grant or bursary over 52 weeks and add this to the weekly loan amount where appropriate. Amounts in excess of a maintenance grant are disregarded. This total, added to the weekly loan total calculated at Step four, is the amount of income used in the health benefits assessment.
 
 
Grants
In general, grants intended for living costs (such as the NHS bursary and the social work bursary) are taken into account, and grants for other costs are disregarded. For how hardship funds and grants are treated, see here.
A maximum amount of any maintenance grant or Welsh government learning grant paid to 2012 cohort students is taken into account, but amounts above this are ignored.1The National Health Service (Travel Expenses and Remission of Charges) Amendment (No.2) Regulations 2006, No.2171 (as amended) The maximum amounts taken into account are as follows.
Student cohort
Amount taken into account
England
2012 cohort
£2004.50
Wales
2012 cohort
£2,580
Northern Ireland
£1,318
Note: at the time of writing, the treatment of the new funding arrangements introduced in 2018/19 for undergraduates in Wales had not been clarified in regulations. See CPAG’s Welfare Rights Bulletin for updates.
Institutional bursaries and scholarships are taken into account if they are paid for living costs.
If you are not eligible for a student loan for living costs, £693 for books, travel and equipment is deducted from your grant.
Social work bursaries are usually divided over the number of weeks of study, except if your classroom weeks exceed 45, in which case they are divided by 52.
Teacher training bursaries are divided over the number of days they are paid, then multiplied by seven to give a weekly amount. The £693 disregard is not applied.
 
1     The National Health Service (Travel Expenses and Remission of Charges) Amendment (No.2) Regulations 2006, No.2171 (as amended) »
Further education grants
The following further education grants are disregarded:
    16–19 bursary fund;
    education maintenance allowance;
    adult learning grant;
    Care to Learn grant;
    travel expenses allowance.
Higher education grants
The following higher education grants are completely disregarded:
    part-time course costs grant;
    childcare grant;
    NHS parental support grant (expected to be disregarded);
    parents’ learning allowance;
    disabled students’ allowance;
    travel expenses;
    tuition fees grants and loans.
The following grants are taken into account:
    adult dependants’ grant;
    teacher training bursary;
    NHS training grant
    nursing and midwifery bursary;
    social work bursary.
Postgraduate grants
Any research council or other maintenance grant and dependants’ allowances are taken into account. Supplementary grants are treated in the same way as those for undergraduates (see here). Ignore:
    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.
Student loan
A student loan includes:
    the maximum loan for living costs for which you are eligible, including any means-tested element (where applicable). This is taken into account as your income whether or not you apply for it. The government believes that it is the primary source of public support to students and, therefore, should be fully exhausted before further support is given;
    any payments for extra weeks’ attendance.
The NHS Business Services Authority disregards £693 for books, travel and equipment from the annual student loan.
Any special support element should be disregarded in the same way as for income support (IS). Thirty per cent of the maximum postgraduate loan for master’s or doctoral courses to which you are entitled is taken into account, but the remainder is disregarded.
Note: at the time of writing, regulations had not been laid to clarify the treatment of the new undergraduate loans for living costs for part-time students in England, and whether there would be any changes arising from the newest funding arrangements for undergraduates in Wales. However, in practice, part-time living costs loans for part-time students are treated in the same way as loans for full-time students, with the special support element disregarded and the loan then taken into account according to the usual rules. See CPAG’s Welfare Rights Bulletin for updates.
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:
– £390 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; disregarded if paid for other items such as childcare
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 dependants’ 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 (as capital if not regular payments); disregarded if paid for other items
Institutional bursaries or scholarships
Taken into account if paid for living costs
Maintenance grants
Any sum in excess of a certain amount taken into account
NHS childcare allowance
Disregarded
NHS dependants’ allowance
Taken into account in full
NHS healthcare bursary
Taken into account except:
– £390 a year for books and equipment;
– £303 a year for travel
NHS nursing and midwifery bursary
Means tested: taken into account in full
Non-means tested: taken into account, except:
– £390 a year for books and equipment
– £303 a year for travel
NHS parental support grant
Disregarded (expected)
NHS training grant
Taken into account in full (expected)
Parents’ learning allowance
Disregarded
Part-time students’ grant for course costs
Disregarded
Part-time students’ grant for tuition fees
Disregarded
Part-time students’ loan for living costs
Expected to be taken into account except:
– £390 a year for books and equipment;
– £303 a year for travel;
– £10 a week in certain circumstances
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, 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 in full except:
– £390 a year for books and equipment;
– £303 a year for travel;
– £10 a week in certain circumstances
Teacher training bursary
Taken into account
Travelling or accommodation expenses
Disregarded
Tuition fee grant (Wales)
Disregarded
Tuition fee loan
Disregarded
Welsh government learning grant
Any sum in excess of a certain amount 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 maximum entitlement taken into account, except:
– £390 a year for books and equipment;
– £303 a year for travel;
– £10 a week in certain circumstances
Postgraduate loan for master’s degrees in England and 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
Example
Oliver is a second-year full-time undergraduate in England. He receives the maximum away-from-home student loan (£9,706), and £50 a week from his parents for food and bills.
When calculating his income for health benefits purposes, subtract £693 from his student loan, to give £9,013. Divide this by 52 weeks (£173.33). The £50 a week he gets from his parents is added to this figure and his income is, therefore, assessed to be £223.33 a week.
This income is then set against the appropriate IS personal allowances, housing and other costs to determine whether or not it exceeds or falls short of Oliver’s requirements. If it falls short, he receives full support. If his income exceeds this amount, he may receive partial support, depending on the level of excess.
Hardship funds
Discretionary support provided by your university or college when you are in financial difficulty is treated differently from other student grants and loans. This support can include:
    higher education hardship funds, including what was previously the Access to Learning Fund in England and the Financial Contingency Fund in Wales (individual institutions may still refer to them by these names);
    further education discretionary support funds or support from the Financial Contingency Fund in Wales.
In general, if the payment is for living costs, it is taken into account in full if it counts as capital, or with up to a £20 a week disregarded if it counts as income. If the payment is for other costs, it is disregarded. For example, a further education discretionary support funds grant solely for childcare costs is disregarded. Ask your provider for a letter saying what the payment is for and how it is paid.
Lump-sum payments count as capital. Regular payments count as income.
Lump-sum payments
Lump-sum payments are taken into account as capital if they are intended, and used, for living costs such as food, ordinary clothing or footwear, household fuel, rent, council tax or water charges. Payments for anything else are disregarded. Although taken into account as capital, this only affects your entitlement if it brings your capital above the £16,000 higher limit. See here for details.
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, council tax or water charges. 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 or voluntary and charitable payments (or on widowed parent’s allowance or war pensions). If you get one of these other payments as well as a discretionary hardship payment, your maximum weekly disregard is £20.
For example, if you have a student loan for living costs and regular payments from the university’s hardship fund, £10 a week is disregarded from each. If you also receive regular payments from a charity, these count in full as you have already used up your £20 disregard on the loan and the hardship fund payment.
Regular payments intended, and used, for anything else, such as childcare expenses, are completely disregarded.
Voluntary or charitable payments
These are treated in the same way as hardship fund payments.
Professional studies loans
Professional studies loans, or any other bank loans, to support study are always treated as income, not capital, no matter how they are paid. The loan is taken into account if it is intended, and used, for living costs – eg, food, ordinary clothing or footwear, household fuel, rent, 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.
4. Earnings
Your earnings and the earnings of your partner are taken into account in the health benefits assessment. Your net weekly earnings are taken into account – ie, deducting:
    income tax;
    class 1 national insurance contributions;
    half of any contribution you make towards a personal or occupational pension.
5. Benefits and tax credits
If you receive income support, income-based jobseeker’s allowance (JSA), income-related employment and support allowance (ESA) or child tax credit, you automatically get free health benefits (see Chapter 11). You may also qualify if you get universal credit (see here).
Housing benefit is effectively disregarded, as the NHS Business Services Authority only takes into account the rent paid directly by you when determining need.
Benefits and tax credits taken into account in full include:
    carer’s allowance;
    contribution-based JSA;
    contributory ESA;
    incapacity benefit;
    most industrial injuries benefits;
    retirement pension;
    working tax credit.
Benefits and tax credits completely disregarded include:
    attendance allowance;
    child benefit;
    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. Note: you do not receive this disregard if you already have £10 disregarded from a student loan or £20 disregarded from hardship fund payments.
6. Maintenance
Regular child maintenance payments are disregarded and lump sums are treated as capital.
7. Savings and capital
There are limits on the amount of savings or capital you can have and still claim health benefits.
You cannot get health benefits if your savings or other capital is above £16,000.
If your capital is £6,000 or less, it does not affect your entitlement to health benefits at all. If your capital is between £6,000.01 and £16,000, you are treated as though you have an income from this capital of £1 a week for every £250 (or part of £250) between these amounts. This is referred to as ’tariff income’. For example, if you have savings of £6,525, your tariff income is £3 a week.