Benefits for Students in Scotland Handbook | 2022/23 | 20th ednPart 1: Benefits and tax credits Chapter 10: Universal credit
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Chapter 10: Universal credit
Basic facts
    •Universal credit (UC) is gradually replacing working-age means-tested benefits and tax credits.
    •Full-time students can qualify if they are a parent, have a non-student partner and in some other circumstances.
    •Part-time students who are able to meet their work-related requirements can qualify.
    •It can include amounts for adults, children, illness, caring responsibilities, rent and childcare costs.
    •You claim with your partner, and you are usually paid monthly in arrears in a single household payment.
    •The amount you get is usually affected by any student grant, loan or other income you have.
1. What is universal credit
Universal credit (UC) is a means-tested benefit for people of working age.
UC replaces the following benefits and tax credits:
    •income support;
    •income-based jobseeker’s allowance;
    •income-related employment and support allowance;
    •housing benefit (HB);
    •child tax credit;
    •working tax credit.
You cannot make a new claim for these and must claim UC instead (for an exception for HB, see here). Once you claim UC, you remain on UC (provided you are still eligible), even if your circumstances change.
If you are a full-time student, you are only eligible for UC in some circumstances – broadly, if you are a parent, have a disability, if you are a young student in non-advanced education and without parental support, or if you have a partner who is not a student.
The amount you get is based on your circumstances (eg, whether you have a partner or child, or care for someone with a disability) and is usually affected by any grant, loan or other income you have.
2. Who is eligible
Students
To qualify for universal credit (UC), you must satisfy all the basic rules described on here. Most students cannot claim UC, although there are some exceptions (see here). For UC, a student is referred to as someone ‘receiving education’.
Receiving education
You are ‘receiving education’ if you are:1Reg 12 UC Regs
– a qualifying young person. This applies if you are in, enrolled on or accepted for non-advanced education of at least 12 hours a week, or approved training, and have not yet reached 31 August after your 19th birthday. If you are 19 you must have started, been enrolled on or accepted the course before you turned 19. You are also a qualifying young person until 31 August following your 16th birthday, even if you have left education;
– undertaking a full-time course of advanced education (see below);2paras H6031 and H6047 ADM
– on another full-time course for which a loan, grant or bursary is provided for your maintenance;
– (if none of the above three bullets apply) on a course that is not compatible with your ’work-related requirements’ (ie, what you are expected to do in terms of looking for work).
A course of advanced education is one above the level of National Qualifications at Higher or Advanced Higher level, including HND, degree and postgraduate courses. It is full time if it is classed as full-time by the institution, unless this is not clear, or the person has exemptions from parts of the course.3BK v SSWP [2022] UKUT 73 (AAC)
Open University courses are not classed as full time, but they are courses of study, so regard must be had as to whether they are compatible with work-related requirements.4para H6087 ADM
You are ‘undertaking a course’ from the day you start the course until the last day of the course (or an earlier date when you abandon or are dismissed from the course).5Reg 13(1) UC Regs
 
1     Reg 12 UC Regs »
2     paras H6031 and H6047 ADM »
3     BK v SSWP [2022] UKUT 73 (AAC) »
4     para H6087 ADM  »
5     Reg 13(1) UC Regs »
Modular courses
A modular course is one that has two or more modules, and you are required to successfully complete a specified number of modules to have completed the course. If you are undertaking a part of a modular course, you count as undertaking the course from the day on which that part of the course starts until the last day on which you are registered as undertaking that part (or an earlier date if you abandon or are dismissed from the course).
You are also undertaking a modular course during any period in which you undertake the course to retake failed exams or complete a module that you have failed to successfully complete as well as any holidays, unless the holiday follows the last day of the final module.1Reg 13(1)(b), (2) and (3) UC Regs
 
1     Reg 13(1)(b), (2) and (3) UC Regs »
Who can claim universal credit
If you do not count as receiving education, you can claim UC in the same way as anyone else.
If you count as receiving education, you are only eligible for UC if you:1Regs 3(2)(b), 13(4) and 14 UC Regs
    •are responsible for a child or young person; or
    •are under 22 on a non-advanced course, you were under 21 when you started the course, and you are ’without parental support’ (see below); or
    •have limited capability for work and also get disability living allowance (DLA), personal independence payment (PIP) or adult disability payment (ADP). You must have had ‘limited capability for work’ (LCW) or ‘limited capability for work-related activity’ (LCWRA) before you started ‘receiving education’. This means a determination that you have LCW/LCWRA for UC or (new-style) contributory employment and support allowance (ESA), or that you are treated as having LCW/LCWRA for UC. You can claim (new-style) contributory ESA in order to establish that you have LCW/LCWRA (although you do not have to get any ESA to qualify in this way). Once you are found to have LCW/LCWRA for ESA (and you also get PIP/ADP or DLA), you are then eligible for UC as long as you had, or were treated as having, LCW/LCWRA before you started receiving education – ie, you cannot claim UC if you’ve already started your course by the time LCW/LCWRA is assessed. Note: you count as receiving education while you are a qualifying young person, so even if you have LCW/LCWRA through a (new-style) contributory ESA assessment, you would have to have a period where you are no longer a qualifying young person in order to be eligible for UC; or
    •are a single foster parent (this includes kinship carers with whom a child is placed under the Looked After Children (Scotland) Regulations 2009); or
    •are a member of a student couple and one of you is a foster parent (this includes kinship carers with whom a child is placed under the Looked After Children (Scotland) Regulations 2009); or
    •are over pension age and your partner has not yet reached that age; or
    •are making a joint claim with your partner who is not a student, or who is a student but would be eligible for UC her/himself while studying; or
    •have taken time out because of illness or caring responsibilities, you have now recovered or your caring responsibilities have ended, and you are not eligible for a grant or loan.
If you are in one of the above groups and have a partner who is also a student, you can make a joint claim for UC with her/him, even if s/he is not in one of these groups.2Reg 3(2)(b) UC Regs
Without parental support
‘Without parental support’ means you:3Reg 8(3) UC Regs
– are an orphan; or
– cannot live with your parents because you are estranged from them, or because there is a serious risk to your physical or mental health, or you would face significant harm if you lived with them; or
– are living away from your parents, and they cannot support you financially because they are ill or disabled, in prison or not allowed to enter Great Britain.
‘Parent’ includes any person acting in place of a parent. The person must be broadly acting in the way a parent would.4NP v SSWP [2009] UKUT 243 (AAC)
You are estranged if you are ‘alienated in feeling or affection’ from your parents. The young person’s statement about the estrangement should be believed unless it is ‘self-contradictory or improbable’, and third party evidence is not required.5paras E1051 and E1052 ADM
Note: if you are aged 16 or 17 and receiving education, you can only claim UC if you are covered by one of the first three bullet points above – ie, you have a child, you are without parental support and in non-advanced education, or you are ill or disabled. If you are a 16/17-year-old care leaver and are receiving education, you can only claim if you have a child or are ill or disabled, and you cannot get help with housing costs.6Reg 8 and Sch 4 para 4 UC Regs
Examples
Jodie is 18 and on UC. She starts a full-time course of non-advanced education. She is estranged from her parents. She is still eligible for UC.
Lewis is on UC. He moves in with his partner Liz, who is on a full-time advanced course and has a three-year-old child. They are eligible for UC.
Pauline is 23 and is on UC. She starts a part-time non-advanced course in January 2022. The Department for Work and Pensions decides that her course is not compatible with her work-related requirements, so she counts as ‘receiving education’. She is single and not disabled. She is not eligible for UC while she is on her course.
Karen is on UC. She moves in with her partner, Jake, who is unemployed. Karen starts a full-time advanced course. They are still eligible for UC.
Donna, a lone parent with a nine-year-old son, is on a degree course. She is on housing benefit (HB) and child tax credit (CTC). In the summer vacation she claims UC and her HB and CTC stop.
 
1     Regs 3(2)(b), 13(4) and 14 UC Regs »
2     Reg 3(2)(b) UC Regs »
3     Reg 8(3) UC Regs »
4     NP v SSWP [2009] UKUT 243 (AAC) »
5     paras E1051 and E1052 ADM »
6     Reg 8 and Sch 4 para 4 UC Regs »
Work-related requirements
Even if you are a student who can claim UC, you may have to meet certain ’work-related requirements’ in order to get UC. These are set out in a ‘claimant commitment’, drawn up by your work coach at the job centre. If it is not possible to do so while on your course, you may be given a sanction and your UC may be reduced. See CPAG’s Welfare Benefits and Tax Credits Handbook for more information about work-related requirements and sanctions.
There are no work-related requirements if you are receiving education and you are:1Reg 89 UC Regs
    •under 22 (and were under 21 when you started your course), in non-advanced education and have no parental support; or
    •eligible for UC as a student (unless you are eligible after having taken time out because of illness or caring responsibilities) and you get a student loan for maintenance, or a maintenance grant that is taken into account for UC. This only applies during the period of the year in which your student income is taken into account. Normally, this is over the academic year (see Chapter 15). Over the summer vacation you may be subject to work-related requirements.
If you are not exempt from work-related requirements under the rules above and not exempt for any other reason (eg, because you have a child under one or you are severely disabled), you must meet your work-related requirements, otherwise you can be sanctioned. This means that your UC is reduced by the level of your standard allowance (see here). You may be able to challenge a sanction. If you are given a sanction, get advice as soon as possible.
Examples
Sukhi is a full-time further education student. She gets a bursary maintenance allowance. She has a 12-year-old daughter. She claims UC. Because she gets a student grant for maintenance, no work-related requirements apply.
Sean, a lone parent with one child aged eight, is studying a full-time HND course. He claims UC and does not have any work-related requirements applied because he gets a student loan. His long vacation starts on 9 June 2023. For the assessment period that includes 9 June and the next two assessment periods, which are wholly within his summer vacation, he is subject to work-related requirements. If Sean cannot meet these requirements, he may be sanctioned and his UC reduced.
 
1     Reg 89 UC Regs »
3. Basic rules
Universal credit (UC) is for people on a low income who are in or out of work. You can claim regardless of your circumstances, provided you meet the basic rules about age, education, residence, income and capital. So, for example, lone parents, people with a disability, carers and unemployed people can all claim UC. If you are a student, you can only get UC if you meet the basic rules and are in one of the groups of students who are eligible for UC.
As well as being a student who is eligible to claim UC, you must satisfy all the following conditions.
    •You are aged 18 or over. There are exceptions for some 16/17 year olds – eg, if you are estranged from your parents, are a parent yourself, are sick or disabled or if you are caring for someone with a disability.
    •You are under pension age (see here). You are also eligible if you have a partner who is over pension age, provided you are under pension age.
    •You are in Great Britain, satisfy the ’habitual residence’ and the ’right to reside’ tests, and are not a ’person subject to immigration control’. These terms are explained in CPAG’s Welfare Benefits and Tax Credits Handbook.
    •You have no more than £16,000 capital.
    •Your income is less than your ’maximum amount’ of UC (see here).
    •You have agreed a ’claimant commitment’, setting out what you must do to receive your UC. If you have a partner, you must each agree a claimant commitment to get benefit. You do not have to agree a claimant commitment if you are terminally ill (see CPAG’s Welfare Benefits and Tax Credits Handbook).
4. Amount of benefit
The amount of universal credit (UC) you get depends on your circumstances and the circumstances of your partner. The amount also depends on your and your partner’s income and capital. Go through the following steps to work out the amount of UC to which you are entitled.
Step one: capital
If your capital is over £16,000, you cannot get UC. Some kinds of capital are ignored. For details, see CPAG’s Welfare Benefits and Tax Credits Handbook.
Step two: work out your maximum amount
Your maximum amount is worked out by adding together the monthly amounts of the standard allowance and any other elements for which you are eligible.
Step three: work out your monthly income
Chapter 15 explains how your loan, grant or other income is taken into account.
Step four: deduct monthly income from maximum amount
If your income is less than your maximum amount, UC is the difference between the two. If your income is the same as or more than your maximum amount, you cannot get UC.
Your maximum amount
Work out your maximum amount by adding together your standard allowance and any additional elements that apply. For the amounts, see here. The rates are monthly and are from April 2023.
Standard allowance
You get one standard allowance for yourself and any partner that you live with. There are different rates depending on whether you and your partner are under 25, or 25 or over.
Child element
You get one child element for each eligible dependent child who ’normally lives’ with you.1Reg 4(2) UC Regs Each child must be under 16, or aged 16 to 19 and in full-time non-advanced education or approved training.2Reg 5 UC Regs You can claim for a 16-year-old child until 31 August after their 16th birthday, whether they are in education or not. You can only claim for a child up to 31 August following her/his 19th birthday, and s/he must have been under 19 when s/he started her/his education or training. You cannot claim for a child who claims UC, income support, jobseeker’s allowance, employment and support allowance (ESA) or tax credits in her/his own right.
The higher child element is paid if one of your children was born before 6 April 2017.
You can usually only get a child element for a maximum of two children. However, you can get a child element for any child born before 6 April 2017. If you have a third child on or after 6 April 2017 and you get UC, you cannot get a child element for her/him unless an exception applies (see CPAG’s Welfare Benefits and Tax Credits Handbook for what these are).
You get an additional amount for any child or young person who gets disability living allowance, personal independence payment, child disability payment or adult disability payment, whether you get a child element for her/him or not. If the child is severely disabled, you get a higher amount.
 
1     Reg 4(2) UC Regs »
2     Reg 5 UC Regs »
Elements for illness
You get an extra amount of UC if you meet the test for ’limited capability for work’ (the work capability assessment) and your claim (or your request to be assessed for limited capability for work) was made before 3 April 2017 or if you meet the test for ’limited capability for work-related activity’.
The work capability assessment is the same as that used for ESA to assess how much your health or disability limits your ability to work or undertake work-related activity.
Carer element
You qualify for a carer element if you are entitled to carer’s allowance (CA) (or meet the conditions for it) or you would be entitled to CA except for the fact that your earnings are too high. You must be caring for someone for at least 35 hours a week who is in receipt of certain disability benefits. You cannot get an element for being a carer and for your own illness at the same time. Full-time students are not usually entitled to carer’s allowance, so cannot usually get a carer element (see here).
Housing costs element
You get an amount for rent included in your UC if you are liable for the rent on your home (see here). If you own your home, you may be able to get help with certain service charges, but not if you have any earnings in an assessment period.
UC does not include amounts to cover your mortgage interest payments, but you may be able to get a loan from the Department for Work and Pensions to help with these. You must normally get UC for three months before you can apply for this help.
The housing element of UC for rent is paid directly to you, for you to then pay your landlord, although you can request for it to be paid directly to your landlord instead. See CPAG’s Welfare Benefits and Tax Credits Handbook for more information.
An amount is deducted from your housing costs element if you are in rented accommodation and have a non-dependant living with you. This is called a ‘housing costs contribution’, and is a flat rate of £85.73 per month.
A non-dependant is someone, usually a friend or adult relative, who lives with you, but not on a commercial basis.
There is no deduction for a non-dependant who is under 21, and in certain other circumstances.
See CPAG’s Welfare Benefits and Tax Credits Handbook for further details about the housing costs element, and about loans for mortgage interest.
Help with your rent
You must be liable for rent. There are some circumstances in which you can be treated as liable for the rent, even when you are not legally liable – eg, if you have taken over paying the rent from someone else.
Your UC housing costs element may not include the full amount of rent that you pay.
If you rent from a private landlord (including a hall of residence), your housing element is based on a standard ‘local housing allowance’ for the size of property that applies to you, even if your rent is higher than this amount. If your rent is lower, your housing element is based on the amount of your actual rent. Each local authority has its own rates for properties of different sizes. Check your local authority’s rates at lha-direct.voa.gov.uk/search.aspx.
Generally, you are allowed one bedroom for:
    •an adult couple;
    •another single adult aged 16 or over;
    •two children under 16 of the same sex;
    •two children under 10;
    •any other child.
You are allowed a maximum of four bedrooms. If you are a single person aged under 35 with no children, the local housing allowance is usually a lower, shared-accommodation rate. This lower rate does not apply if you are a care leaver under 25, or you get certain disability benefits, and in some other cases. If you are disabled and need overnight care, you may qualify for an additional bedroom for a carer. See CPAG’s Welfare Benefits and Tax Credits Handbook for details.
If you rent from a local authority or housing association, your housing element is usually the same as the weekly rent due. However, it is reduced if you are considered to have a spare bedroom (known as the ‘bedroom tax’). The rules about how many bedrooms you can have are similar to the local housing allowance rules, but see CPAG’s Welfare Benefits and Tax Credits Handbook for more information. If you are considered to have one spare bedroom, the reduction is 14 per cent, and 25 per cent if you have two or more spare bedrooms. If your housing element is reduced in this way, you should apply for a discretionary housing payment from the local authority.
A discretionary housing payment can be paid if you get UC that includes a housing costs element and you need additional help with your housing costs - eg, to make up the shortfall in rent due to your housing element being reduced because you have a spare bedroom. Payments are usually awarded for a temporary period, beyond which you have to reapply. Apply to your local authority.
Childcare element
If you are working, you can get help with up to 85 per cent of your childcare costs, up to a maximum monthly amount. You must be in paid work, but there is no minimum number of hours that you must work. If you have a partner, you must both be in paid work, unless your partner is ill or disabled, or a carer.
Example
Chloe is 22 and her partner Jo, who is not a student, is 23. They are unemployed and get UC. Chloe starts a full-time, two-year Higher National Diploma course. She gets a student loan of £7,100, plus an independent students’ bursary of £1,000. Their eligible rent is £398 per month.
During the academic year September 2022 to May 2023:
Step one Chloe and Jo have no savings or capital.
Step two Their maximum amount of UC is:
Standard allowance for a couple under 25 £416.45
Housing costs £398.00
Total £814.45
Step three Their monthly income is:
Chloe’s student loan £777.50
The independent students’ bursary is disregarded. The loan is divided over eight months of the academic year, and £110 of the remaining amount is disregarded (see Chapter 15).
Step four Their income is below their maximum amount, so they get UC of £36.95 per month.
From May 2023 to September 2023:
Step two Chloe and Jo’s maximum amount of UC is still £814.45 (at 2022/23 rates).
Step three Their weekly income for UC purposes is nil. This is because Chloe’s student income only counts until the assessment period before the summer vacation.
Step four From May 2023 to September 2023, their monthly UC (at 2022/23 rates) is £814.45, so they get maximum UC from May to September.
5. Claiming universal credit
You usually make a claim online at gov.uk/universal-credit/how-to-claim. Help with online claims over the telephone, telephone claims and face-to-face claims should also be possible if required. You claim for yourself if you are single or a lone parent. If you are in a couple, you make a joint claim with your partner. You can get help to make your claim from the free Help to Claim phone service run by Citizens Advice (details at citizensadvice.org.uk/helptoclaim).
The Department for Work and Pensions (DWP) administers universal credit (UC), and payments are made monthly in arrears. In Scotland, payments can be made twice-monthly and rent amounts can be paid directly to your landlord.1The Universal Credit (Claims and Payments) (Scotland) Regulations 2017 No.227 In exceptional circumstances, you can request alternative payment arrangements – eg, to get paid more regularly, or to get the payment split between you and your partner. This is a discretionary decision. See CPAG’s Welfare Benefits and Tax Credits Handbook for more information.
If you are an employee, you do not usually need to report any changes in your earnings, as HM Revenue and Customs provides this information directly to the DWP.
If you do not have enough money to live on while you are waiting for your first payment of UC, you can ask for an advance payment. This can be for up to 100 per cent of your award, and you repay it over the subsequent 24 months.
UC advances can also be made when your needs have increased and you are waiting for an extra element of UC to be paid with your next monthly regular payment – eg, when you first have a new baby or become responsible for a child. Awards are at the DWP’s discretion. You must repay an advance, usually from the next three months’ UC payments.
You can also ask for a loan, called a budgeting advance of UC, to meet certain needs once you have been getting UC for six months. Budgeting advances of UC must normally be repaid from your next 24 months’ UC payments. See CPAG’s Welfare Benefits and Tax Credits Handbook for more information.
 
1     The Universal Credit (Claims and Payments) (Scotland) Regulations 2017 No.227 »
6. Challenging a decision
If you think a decision about your universal credit is wrong, you can ask the Department for Work and Pensions (DWP) to look at it again. This process is known as a ‘mandatory reconsideration’. Provided you ask within the time limit (usually one month), the DWP notifies you of the decision in a ‘mandatory reconsideration notice’. If you are still not happy when you get this notice, you can appeal to the independent First-tier Tribunal. If it was not possible to ask the DWP to reconsider the decision within a month, you can ask for a late revision (within 13 months), explaining why it is late. You can also ask the DWP to look at a decision again at any time if certain grounds are met – eg, if there has been an official error.
7. Other benefits and tax credits
You cannot make a new claim for income support, income-based jobseeker’s allowance (JSA), income-related employment and support allowance (ESA), housing benefit (there are some exceptions - see here), child tax credit or working tax credit.
You can still get other benefits, such as carer’s allowance (CA), contributory ESA or contribution-based JSA, but they may count as income.
The benefit cap
Your universal credit (UC) is reduced if your total income from benefits is over the maximum level that you or your partner can receive. The amount is £1,666.67 a month if you are a lone parent or member of a couple, and £1,116.67 if you are a single person.
The benefits that count towards the cap include child benefit and maternity allowance.
You are exempt from the cap if:
    •you or your partner are working and earning at least £658 a month; or
    •you or your partner are disabled. You or your partner must get certain disability benefits, including disability living allowance (DLA), personal independence payment (PIP), adult disability payment (ADP), ESA with a support component, or UC with a limited capability for work-related activity element; or
    •you are responsible for a child or young person who gets DLA, PIP, ADP or child disability payment; or
    •you or your partner are a carer and get CA or the carer element in UC; or
    •you are a war widow(er).
There is protection for nine months before the cap applies if you are no longer working, or are earning less than £658 a month, but were working and earning at least £658 a month for each of the 12 months before this.
Passported benefits
Provided you meet any other conditions, getting UC entitles you to:
    •a Best Start grant;
    •Scottish child payment;
    •funeral support payments;
    •free school lunches from your local authority, provided your earnings (or the earnings of you and your partner) are not more than £660 in the assessment period before your application.
If you get UC and have income below a certain level, you are eligible for:
    •free dental treatment (see here);
    •vouchers for glasses (see here);
    •Best Start foods (see here).
You may also be eligible for a school clothing grant - see mygov.scot/clothing-grants.