Chapter 16: How income affects means-tested benefits

This chapter explains how much weekly income is taken into account when working out 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 15. Although tax credits are also means tested, the way student and other income is assessed is different (see Chapter 17).

Basic facts

•Student loans 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 (JSA) or income-related employment and support allowance (ESA), and your housing benefit (HB) is reduced.

•The amount of student loan you are eligible for is taken into account as income, whether or not you apply for it.

•If you or your partner are over pension age, your student grant and loan are ignored as income for HB.

•Student loans 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 more benefit during these months even if your benefit was reduced during the academic year.

•Some grants are also taken into account as income, but others do not affect your benefit.

A grant is defined as an educational grant or award, bursary, scholarship or allowance, and does not include education maintenance allowance or discretionary fund payments.1IS Reg 61(1) IS RegsJSA Reg 130 JSA RegsESA Reg 131(1) ESA RegsHB Reg 53(1) HB RegsAll Definition of ‘grant’ In general, grants intended for living costs are taken into account and grants for other costs are disregarded. For the way that discretionary funds are treated, see here.

If you are not eligible for a student loan, deduct from your grant:

•£390 for books and equipment; and

•£303 for travel.

An assessed contribution from a partner or parent counts as income, whether or not you receive it. However, for IS and income-related ESA, if you are a disabled student, only include contributions that are actually paid.2IS Reg 61(1) IS RegsESA Reg 131(1) ESA RegsHB Reg 53(1) HB Regs

Ignore any grants for:3IS Reg 62(2) IS RegsJSA Reg 131(2) JSA RegsESA Reg 132(2) ESA RegsHB Reg 59(2) HB Regs

•tuition fees or exam fees;

•course-related disability costs;

•residential study away from your normal home;

•books and equipment, or travel;

•for IS, income-based JSA and income-related ESA only, maintenance of a child dependant;

•childcare costs.

1 IS Reg 61(1) IS RegsJSA Reg 130 JSA RegsESA Reg 131(1) ESA RegsHB Reg 53(1) HB RegsAll Definition of ‘grant’ »

2 IS Reg 61(1) IS RegsESA Reg 131(1) ESA RegsHB Reg 53(1) HB Regs »

3 IS Reg 62(2) IS RegsJSA Reg 131(2) JSA RegsESA Reg 132(2) ESA RegsHB Reg 59(2) HB Regs »

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 (see Chapter 15 for universal credit). Chapters 4, 6 and 7 outline the income-related ESA, HB and IS assessments step by step. This chapter explains how much weekly income counts in these assessments.

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

If you want to work out your 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 (note: that the care-experienced accommodation grant is normally paid as a lump sum and therefore counts as capital rather than income).

2. Grants and loans

Grants

Student loans

Grants

Undergraduate grants

The following higher education (HE) grants are disregarded:

•lone parents’ childcare grant;1IS Reg 62(2)(j) IS Regs
ESA Reg 132(2)(i) ESA Regs
HB Reg 59(2)(h) HB Regs

•disabled students’ allowance;2IS Reg 62(2)(c) IS Regs
ESA Reg 132(2)(b) ESA Regs
HB Reg 59(2)(b) HB Regs

•lone parents’ grant for income-related employment and support allowance (ESA), and for income support (IS) and income-based jobseeker’s allowance (JSA) – except for some existing claimants who do not get child tax credit (CTC);

•travel expenses;3IS Reg 62(2)(h) IS Regs
ESA Reg 132(2)(g) ESA Regs
HB Reg 59(2)(g) HB Regs

•tuition fees.4IS Reg 62(2)(a) IS Regs
ESA Reg 132(2)(a) ESA Regs
HB Reg 59(2)(a) HB Regs

The following HE grants are taken into account:

•young students’ bursary;

•independent students’ bursary;

•care-experienced students’ bursary;

•care-experienced accommodation grant (but note that if it is a one-off payment, it should count as capital rather than income);

•dependants’ grant;

•lone parents’ grant. This is always taken into account for housing benefit (HB), but disregarded for IS, income-based JSA and income-related ESA.5IS Reg 62(2)(i) IS Regs
JSA Reg 131(2)(h) JSA Regs
ESA Reg 132(2)(h) ESA Regs
Note: the rules do not specifically disregard the lone parents’ grant but rather disregard ‘any payment… intended for the maintenance of a child dependant’. Since the SAAS pays this grant only to students with children for their maintenance, it should be disregarded under this rule for IS, income-based JSA and income-related ESA.

1 IS Reg 62(2)(j) IS Regs
ESA Reg 132(2)(i) ESA Regs
HB Reg 59(2)(h) HB Regs
»

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

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

4 IS Reg 62(2)(a) IS Regs
ESA Reg 132(2)(a) ESA Regs
HB Reg 59(2)(a) HB Regs
»

5 IS Reg 62(2)(i) IS Regs
JSA Reg 131(2)(h) JSA Regs
ESA Reg 132(2)(h) ESA Regs
Note: the rules do not specifically disregard the lone parents’ grant but rather disregard ‘any payment… intended for the maintenance of a child dependant’. Since the SAAS pays this grant only to students with children for their maintenance, it should be disregarded under this rule for IS, income-based JSA and income-related ESA.
»

Paramedic, nursing and midwifery students’ grants

The following grants are disregarded:

•childcare allowance;

•disabled students’ allowance;

•dependants’ allowance for a child, and single parent’s allowance – for IS, income-based JSA and income-related ESA.

The following are taken into account:

•paramedic, nursing and midwifery bursary;

•single parent’s allowance – for HB;

•dependants’ allowance for an adult;

•dependants’ allowance for a child – for HB.

Postgraduate grants

The following are taken into account:

•maintenance grant;

•dependants’ grant.

Grants in further education

The following further education (FE) grants are disregarded:

•education maintenance allowance;1IS Sch 9 para 11 IS Regs
JSA Sch 7 para 12 JSA Regs
ESA Sch 8 para 13 ESA Regs
HB Sch 5 para 11 HB Regs

•additional support needs for learning allowance for disability costs;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

•study expenses allowance if paid for books and equipment;3IS Reg 62(2)(g) IS Regs
ESA Reg 132(2)(f) ESA Regs
HB Reg 59(2)(f) HB Regs

•lone parents’ childcare grant;4IS Reg 62(2)(j) IS Regs
ESA Reg 132(2)(i) ESA Regs
HB Reg 59(2)(h) HB Regs

•travel expenses allowance.5IS 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

The following FE grants are taken into account:

•bursary maintenance allowance;

•care-experienced bursary maintenance allowance;

•dependants’ allowance.

FE students who are lone parents and other students eligible for IS (see here) or income-related ESA can stay on IS or income-related ESA instead of applying for a discretionary bursary maintenance allowance. This is because the rules can only treat you as having access to such income if it ‘would become available to [you] upon application’.6IS Reg 42(2) IS Regs
ESA Reg 106(2) ESA Regs
You should not be treated as having access to a discretionary bursary if you do not have one because, by its nature, there is no guarantee you would get it if you applied.

Grants and loans checklist
Student support	Treatment
Undergraduate income
Student loan (including young students’ bursary)	Disregard: – £390 a year for books and equipment; – £303 a year for travel; – £10 a week; – amount of student’s contribution to loan; – partner’s contribution.

Independent students’ bursary	Taken into account in full.

Care-experienced students’ bursary	Disregard: – £390 a year for books and equipment; – £303 a year for travel.

Care-experienced accommodation grant	Taken into account in full (as capital if paid in a lump sum).

Dependants’ grant	Taken into account in full.

Disabled students’ allowance	Disregarded.

Lone parents’ grant	Taken into account in full for HB. Disregarded for IS and income-based JSA if you get CTC. Disregarded for income-related ESA.

Lone parents’ childcare grant	Disregarded.

Travel expenses	Disregarded.

Discretionary funds	Taken into account if paid for basic living costs (as capital if not regular payments) less a weekly disregard.Disregarded if paid for other items.

Childcare fund	Disregarded.

Part-time fee grant	Disregarded.

Paramedic, nursing and midwifery student income
Paramedic, nursing and midwifery bursary	Disregard:– £390 a year for books and equipment; – £303 a year for travel.

Dependants’ allowance for adult	Taken into account in full.

Dependants’ allowance for child	Taken into account in full for HB. Disregarded for IS and income-based JSA if you get CTC.Disregarded for income-related ESA.

Single parent’s allowance	Taken into account in full for HB. Disregarded for IS and income-based JSA if you get CTC. Disregarded for income-related ESA.

Childcare allowance	Disregarded.

Disabled students’ allowance	Disregarded.


Postgraduate income
Tuition fees (including tuition fee loan) and exam fees	Disregarded.

Postgraduate living cost loan	Disregard: – £390 a year for books and equipment; – £303 a year for travel.

Residential study	Disregarded.

Books, equipment and travel	Disregarded.

Maintenance grant	Disregard:
	– £390 a year for books and equipment;
	– £303 a year for travel.

Further education income
Bursary maintenance allowance	Disregard: – £390 a year for books and equipment; – £303 a year for travel.

Care-experienced bursary maintenance allowance	Disregard: – £390 a year for books and equipment; – £303 a year for travel.
Dependants’ allowance	Taken into account in full.

Education maintenance allowance	Disregarded.

Additional support needs for learning allowance	Disregarded for disability costs.

Study expenses allowance	Disregarded for books and equipment.

Lone parents’ childcare grant	Disregarded.

Travel expenses allowance	Disregarded.

Childcare fund	Disregarded.

FE discretionary fund	Taken into account less weekly disregard if paid for basic living costs. Disregarded if paid for other items.

1 IS Sch 9 para 11 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 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)(g) IS Regs
ESA Reg 132(2)(f) ESA Regs
HB Reg 59(2)(f) HB Regs
»

4 IS Reg 62(2)(j) IS Regs
ESA Reg 132(2)(i) ESA Regs
HB Reg 59(2)(h) HB Regs
»

5 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
»

6 IS Reg 42(2) IS Regs
ESA Reg 106(2) ESA Regs
»

Student loans

You should include in the student loan:

•the maximum loan for which you are eligible, including the young students’ bursary.1IS Reg 61(1) IS RegsESA Reg 131(1) ESA RegsHB Reg 53(1) HB RegsAll Definition of ‘student loan’ This is taken into account as your income whether or not you apply for it.2IS Reg 66A(3) and (4) IS Regs
ESA Reg 137(4) and (5) ESA Regs
HB Reg 64(3) and (4) HB Regs
This means that students cannot choose to keep maximum IS or income-related ESA instead of applying for a loan; you are treated as though you had taken out the full loan and your benefit reduced or stopped accordingly; and

•the assessed contribution from a parent or partner, whether or not you receive it. However, for IS and income-related ESA, if you are a disabled student, only contributions that are actually paid are included.3IS Reg 66A(4)(a) IS Regs
ESA Reg 137(5)(a) ESA Regs
HB Reg 64(4) HB Regs

You should deduct from the annual student loan:

•£390 for books and equipment; and

•£303 for travel.

There is a further disregard of £10 a week that applies once the student loan has been divided over the number of weeks in the period of study to arrive at a weekly amount.4IS Reg 66A(2) IS Regs
ESA Reg 137(3) ESA Regs
HB Reg 64(2) HB Regs

1 IS Reg 61(1) IS RegsESA Reg 131(1) ESA RegsHB Reg 53(1) HB RegsAll Definition of ‘student loan’ »

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

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

4 IS Reg 66A(2) IS Regs
ESA Reg 137(3) ESA Regs
HB Reg 64(2) HB Regs
»

3. Dividing student income throughout the year

Student loans

Grants

The annual amount of your loan and grant must be divided over the number of weeks in, usually, a standard academic year to arrive at the weekly amount used to calculate income support (IS), income-based jobseeker’s allowance (JSA), income-related employment and support allowance (ESA) and housing benefit (HB). The ‘standard academic year’ begins on 1 September, 1 January, 1 April or 1 July depending on whether your course begins in the autumn, winter, spring or summer.1IS Reg 61(1) IS Regs
ESA Reg 131(1) ESA RegsHB Reg 53(1) HB Regs
Courses that start in August are taken to have an academic year starting on 1 September.2IS Reg 61(1) IS Regs
ESA Reg 131(1) ESA RegsHB Reg 53(1) HB Regs
All Definition of ‘academic year’
Rules specify exactly the weeks over which the loan and grant are taken into account.

1 IS Reg 61(1) IS Regs
ESA Reg 131(1) ESA RegsHB Reg 53(1) HB Regs
»

2 IS Reg 61(1) IS Regs
ESA Reg 131(1) ESA RegsHB Reg 53(1) HB Regs
All Definition of ‘academic year’
»

Student loans

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 your 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 goes down in these months (unless you have other income – eg, from earnings), you may be able to get more benefit during the summer.

The details of the weeks over which your loan is taken into account are as follows.

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
ESA Reg 137(3)(e) ESA Regs
HB Reg 64(2)(d) HB Regs
In 2022/23 this is 42 weeks for benefit weeks that begin on a Monday, Tuesday, Wednesday or Sunday, and 43 weeks for benefit weeks that begin on a Thursday, Friday or Saturday. 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. In other words, 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.2CIS/3734/2004

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 first term if it starts in August) until the end of the benefit week on or before the last day of the final academic term.3IS Reg 66A(2)(b) IS Regs
ESA Reg 137(3)(d) ESA Regs
HB Reg 64(2)(c) HB Regs

For HB, the start of the benefit week is a Monday.4Reg 2 HB Regs
For IS, JSA and ESA, it depends on your national insurance number.5IS Reg 2(1) IS Regs
JSA Reg 1(3) JSA Regs
ESA Reg 2(1) ESA Regs

Example: first-year student claiming income support

Samira is in her first year. She has two children aged three and 10 and gets child tax credit (CTC) for them. She gets a student loan of £7,100, an independent students’ bursary of £1,000 and a lone parents’ grant of £1,305. Her first term begins on Monday 19 September 2022. Her benefit weeks start on Fridays. Her student loan is divided over the weeks from Friday 2 September 2022 until Thursday 29 June 2023 (43 weeks) to get a weekly income figure. However, because she is in her first year, she does not count as a student until she starts university on 19 September and so her student income is ignored until then. Because she gets CTC, the lone parents’ grant is ignored for IS.

From the start of term:

Her weekly loan and grant income is:

Loan plus independent students’ bursary	£8,100
Less disregards for books and equipment (£390) and travel (£303)	£7,407
Divided by 43 weeks =	£172.26
Less £10 weekly loan disregard =	£162.26

£162.26 is taken into account as weekly income from her loan and grants between Friday 23 September 2022 and 29 June 2023.

Her IS applicable amount is £77 a week. She gets her usual IS until she starts her course. From 23 September, her IS stops because her income is higher than her IS applicable amount.

At the end of the academic year:

Her weekly income from her loan between 30 June and 31 August 2023 is nil. Samira cannot reclaim IS, but would be eligible for universal credit (UC) from just under a month before her long vacation starts (see here). She should get a better-off calculation to check whether she should claim UC or remain on CTC, as claiming UC would bring CTC to an end.

Example: second-year student claiming housing benefit

Agnes is in her second year. She has one child aged six and is claiming HB as a lone parent (and CTC). She gets a student loan and an independent students’ bursary which total £8,100. She also gets a lone parents’ grant of £1,305. Her first term begins on 5 September 2022. Her student loan is divided over the weeks from Monday 5 September 2022 until Sunday 25 June 2023 (42 weeks).

The weekly loan income taken into account is:

Loan plus grants	£9,405
Less disregards for books and equipment (£390) and travel (£303)	£8,712
Divided by 42 weeks =	£207.43
Less £10 weekly loan disregard =	£197.43

£197.43 is taken into account as weekly income from her loan between 5 September 2022 and 25 June 2023. Her weekly income from her loan between 26 June and 3 September 2023 is nil.

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

2 CIS/3734/2004 »

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

4 Reg 2 HB Regs
»

5 IS Reg 2(1) IS Regs
JSA Reg 1(3) JSA Regs
ESA Reg 2(1) ESA Regs
»

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 (see here), 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 Department for Work and Pensions (DWP) to be the longest vacation.1IS Reg 66A(2)(aa) IS Regs
ESA Reg 137(3)(b) ESA Regs
HB Reg 64(2)(b) HB Regs

Academic years and quarters

‘Academic years’ in this case are 12 months, beginning on 1 January, 1 April or 1 July for courses that begin in winter, spring or summer respectively.

‘Quarters’ are 1 January to 31 March, 1 April to 30 June, 1 July to 31 August, 1 September to 31 December.2IS Reg 66A(2)(aa) IS Regs
ESA Reg 137(3)(c) ESA Regs
HB Reg 64(2)(b) HB Regs

Example

Anya’s course begins on 9 January 2023. The main vacation is 26 June to 25 August 2023. She is claiming HB and the benefit week starts on a Monday. Her loan is divided over the weeks from Monday 2 January 2023 to Sunday 2 July 2023, and from Monday 28 August 2023 until Sunday 31 December 2023. From 3 July to 27 August 2023, her student loan income is nil for benefit purposes.

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

2 IS Reg 66A(2)(aa) IS Regs
ESA Reg 137(3)(c) ESA Regs
HB Reg 64(2)(b) 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 (see here) (or, if a course begins in August, from the first day of the first benefit week on or after the first day of the course) until the last day of the last benefit week on or before the last day of the course. The weekly amount that results is then taken into account from the point you actually start attending or undertaking the course.1IS Reg 66A(2)(a) IS Regs
ESA Reg 137(3)(a) ESA RegsHB Reg 64(2)(a) HB Regs

1 IS Reg 66A(2)(a) IS Regs
ESA Reg 137(3)(a) ESA RegsHB Reg 64(2)(a) HB Regs
»

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 day before you would have been due your next loan payment, or to the end of the quarter (see above) in which you left, whichever is earlier. This means that if your loan payments stop shortly after you leave the course, they are only taken into account (and affect any benefits) for a short period.

To calculate the amount of loan taken into account, start by working out the weekly amount of annual loan, with disregards for books, equipment and travel but without the £10 weekly disregard. Then, subtract this amount of weekly loan for the period from the start of the standard academic year (see here) to the day you left from the amount of loan (minus the £693 disregards) you have been paid so far. The result is then divided over the weeks from when you left to when your next instalment would have been due, or the end of the quarter, whichever is earlier.

Example: income support, jobseeker’s allowance and employment and support allowance

Nick abandons his course on 7 October 2022. He is in the second year of a three-year course. He gets a small amount of ESA during his course (which includes a severe disability premium). His benefit week starts on a Monday. In Nick’s case, he has already been paid £2,430 of his £8,100 loan/bursary by the date he leaves.

Step one: work out weekly amount of annual loan

Loan/bursary	£8,100
Less disregards (£693) =	£7,407
Divided by 42 weeks =	£176.36

Step two: work out amount of annual loan before leaving the course

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

£176.36 x 4 weeks (5 September to 2 October) = £705.44

Step three: work out amount of loan ‘left over’ since leaving the course

To do this, add the monthly loan instalments paid or due before the date Nick left his course, deduct disregards, and deduct the annual loan worked out for the period before leaving.

Loan up to when left the course	£2,430
Less disregards (£693) =	£1,737
Amount of loan paid taken into account =	£1,737
Deduct annual loan before leaving (£705.44) =	£1031.56

Step four: work out weekly amount of ‘leftover’ loan for the period it is taken into account

Divide the total amount of leftover loan from Step three for the period since leaving the course by the number of weeks from when Nick left to the day before he would have been due his next loan payment, or the end of the quarter in which he left, whichever is earlier. Count from the benefit week that includes the day Nick left the course until the benefit week that includes the day before his next loan instalment would have been due had payments continued, or the benefit week that includes the last day of the last quarter for which an instalment was payable, whichever is earlier. In Nick’s case, his next loan instalment would have been due on 7 November, and this is before the end of the quarter (31 December).

£1031.56 ÷ 5 (3 October to 6 November 2022) = £206.31

£206.31 a week is taken into account from 3 October 2022 until 6 November 2022. This is likely to mean that Nick’s ESA ends.

Example: housing benefit

To work out how much loan to take into account for Nick’s HB claim (assuming he is not passported to HB from another means-tested benefit) after he has left his course, the calculation is slightly different to that for IS, income-based JSA and income-related ESA. In Step two above, instead of working out the number of benefit weeks up until the week before the one that includes the day Nick left the course, count up until the week that includes the one during which he left the course – ie, there is an extra week in this part of the calculation. Bear in mind that benefit weeks for HB always start on a Monday, and this may not be the same for IS, JSA or income-related ESA.

Step one: work out weekly amount of annual loan

Loan/bursary	£8,100
Less disregards (£693) =	£7,407
Divided by 42 weeks =	£176.36

Step two: work out amount of annual loan before leaving the course

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

£176.36 x 5 (5 September to 9 October) = £881.80

Step three: work out amount of loan ‘left over’ since leaving the course

In the same way as in the example for IS/JSA/ESA above.

Loan up to when left the course	£2,430
Less disregards (£693) =	£1,737
Amount of loan to end of term taken into account =	£1,737
Deduct annual loan before leaving, from Step two (£881.80) =	£855.20

Step four: work out weekly amount of ‘leftover’ loan for the period it is taken into account

In the same way as in the example for IS/JSA/ESA above.

£855.20 ÷ 5 (3 October to 6 November 2022) = £171.04

£171.04 a week is taken into account from 3 October until 6 November 2022.

Nick should consider applying for UC, as no student income is counted for UC once he leaves his course.1para H6152 ADM

Note: if you repay the loan, it is still taken into account as income, according to the formula above.2CJSA/549/2003 You could therefore be refused IS, income-based JSA or income-related ESA despite having no other money to live on. However, if the Student Loans Company asks you to repay the loan rather than your repaying it voluntarily, DWP guidance tells decision makers to disregard the loan as income from the date of the request.3Vol 6, para 30470 DMG

1 para H6152 ADM »

2 CJSA/549/2003 »

3 Vol 6, para 30470 DMG »

Grants

To work out the weeks over which your grant is taken into account for means-tested benefits, first check whether there is a specific rule for that type of grant or whether the standard rule applies.

The standard rule for grants

If the standard rule applies, the grant is taken into account from:1IS Regs 61, definition of ‘period of study’, and 62(3) IS Regs
ESA Regs 131(1), definition of ‘period of study’, and 132(4) ESA RegsHB Regs 53, definition of ‘period of study’, and 59(5) HB Regs

•the first day of the first benefit week (see here) on or after the start of the course in the first or only year; or

•the first day of the first benefit week on or after that year’s start of your course if this is not your first year;

until:

•the last day of the last benefit week that ends on or before the day before the summer vacation if the course continues after the summer; or

•the last day of the last benefit week on or before the last day of the final academic term in the final year or on a course lasting a year or less.

The standard rule applies if your grant income is ‘attributable’ to those weeks. Even though you may be paid your grant monthly, if your grant has been awarded for the whole academic year or length of study, it should be taken into account in this way. You may need to ask your college for a statement showing your annual grant entitlement. This statement should break down the grant into the different allowances so that the DWP can apply the correct disregards when working out how much benefit you should get.

If your grant has not been awarded for the whole academic year or length of study, it is taken into account over the period for which it is payable, from the first day of the first benefit week on or after the start of the period for which the grant is payable until the last day of the last benefit week on or before the last day of that period.2IS Reg 62(3)(b) IS Regs
ESA Reg 132(4)(b) ESA RegsHB Reg 59(5)(b) HB Regs

1 IS Regs 61, definition of ‘period of study’, and 62(3) IS Regs
ESA Regs 131(1), definition of ‘period of study’, and 132(4) ESA RegsHB Regs 53, definition of ‘period of study’, and 59(5) HB Regs
»

2 IS Reg 62(3)(b) IS Regs
ESA Reg 132(4)(b) ESA RegsHB Reg 59(5)(b) HB Regs
»

Higher education grants

For higher education students, the dependants’ grant and lone parents’ grant (unless it is disregarded) are taken into account over the same period as the student loan if you have a student loan or you are eligible for one.1IS Reg 62(3B) IS Regs
ESA Reg 132(6) ESA Regs
HB Reg 59(7) HB Regs
This is the case even though the Student Awards Agency Scotland guide says that such grants cover 52 weeks.

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

Paramedic, nursing and midwifery bursaries

Your bursary, dependants’ allowance and single parent’s allowance (unless it is disregarded), if assessed for study throughout the calendar year, are taken into account for the number of benefit weeks within the full calendar year. Otherwise, the award is taken into account under the standard rule for grants (see here).

Further education grants

Your bursary is only taken into account as income during the academic year.

The bursary maintenance allowance and dependants’ allowance are taken into account under the standard rule for grants (see here).

Example: one-year course

Salome is on a one-year course, starting on 15 August 2022 and running until 9 June 2023. She gets a bursary maintenance allowance of £4,859 for the year. She is getting HB, so her benefit week begins on a Monday. Her allowance is taken into account from Monday 15 August 2022 until Sunday 4 June 2023 (42 weeks). The weekly amount taken into account over that period is:

Total grants for the year	£4,859
Less disregards for books and equipment (£390) and travel (£303)	£4,166
Divided by 42 weeks =	£99.19

£99.19 a week is taken into account as income for HB from 15 August 2022 to 4 June 2023.

Postgraduate funding

A postgraduate award that is assessed for study throughout the calendar year is taken into account for the number of benefit weeks in the full calendar year.1IS Regs 61, definition of ‘period of study’, and 62(3)(a) IS Regs
ESA Regs 131(1), definition of ‘period of study’, and 132(4)(a) ESA Regs
HB Regs 53, definition of ‘period of study’, and 59(5)(a) HB Regs
Otherwise, the award is taken into account under the standard rule for grants (see here).

Postgraduate student loans are taken into account under the standard rule for loans (see here). Students on a Professional Graduate Diploma in Education course may get the same student loan and grants as undergraduates, and these are treated in the same way as undergraduate loans and grants.

1 IS Regs 61, definition of ‘period of study’, and 62(3)(a) IS Regs
ESA Regs 131(1), definition of ‘period of study’, and 132(4)(a) ESA Regs
HB Regs 53, definition of ‘period of study’, and 59(5)(a) HB Regs
»

If you leave your course early

For IS, income-related ESA and income-based JSA, if you abandon your course or get dismissed from it, your grant continues to be taken into account, calculated as though you were still a student, until the end of 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 not taken into account as if you were still a student. Instead, it is taken into account until the grant provider asks you to repay it and, until then, should be calculated over an appropriate period.2Leeves v Chief Adjudication Officer, reported as R(IS) 5/99; reg 31(1) HB Regs Arguably, your grant should only be taken into account as income until the end of the period your last instalment was meant to cover.

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; reg 31(1) HB Regs »

4. Discretionary funds and other payments

Discretionary funds

Other payments

Discretionary funds

Discretionary funds are treated differently from student grants and loans. Discretionary funds include:1IS Reg 61 IS Regs
ESA Reg 131 ESA Regs
HB Reg 53 HB Regs
All Definition of ‘access funds’

•higher education (HE) discretionary fund;

•further education (FE) discretionary fund.

In general, if the payment is for certain living costs, it is taken into account in full if it counts as capital, or with up to a £20 a week disregard if it counts as income. If the payment is for other costs, it is disregarded. Ask your college for a letter saying what the payment is for and how it is paid.

A lump-sum payment counts as capital. Regular payments count as income.

The FE and HE childcare funds are disregarded.

1 IS Reg 61 IS Regs
ESA Reg 131 ESA Regs
HB Reg 53 HB Regs
All Definition of ‘access funds’
»

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), income-related employment and support allowance (ESA) or jobseeker’s allowance (JSA), council tax or water charges.1IS Reg 68 IS Regs
ESA Reg 142 ESA Regs
HB Reg 68 HB Regs
Payments for anything else are ignored for up to 52 weeks. Although taken into account as capital, such payments only affect your benefit if they bring your capital above the 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’.2IS Reg 68(4) IS Regs
ESA Reg 2 ESA Regs
Payments for service charges other than fuel charges that HB does not meet are ignored. Payments for rent in excess of the amount that HB will meet are ignored – eg, if your rent is more than the maximum amount covered by HB (see here).

1 IS Reg 68 IS Regs
ESA Reg 142 ESA Regs
HB Reg 68 HB Regs
»

2 IS Reg 68(4) IS Regs
ESA Reg 2 ESA 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 income-related ESA, and council tax or water charges.1IS Reg 66B IS Regs
ESA Reg 138 ESA Regs
HB Reg 65 HB Regs
However, up to £20 a week is disregarded. You cannot get the £20 disregard in full as well as the full weekly disregards available on a student loan (or on widowed parent’s allowance or war pensions). If you get one of these other payments as well as a discretionary payment, your maximum weekly disregard is £20.

For example, if you have a student loan and regular payments from the HE discretionary fund, £10 a week is disregarded from each.

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

1 IS Reg 66B IS Regs
ESA Reg 138 ESA Regs
HB Reg 65 HB Regs
»

Payments before a course starts or before a loan is paid

A payment from the discretionary 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, if it is intended to tide you over until your loan is paid, is ignored as income.

Other payments

Voluntary or charitable payments

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

Professional and career development loans

Professional and career development loans are always treated as income, not capital, irrespective of how they are paid.1IS Reg 41(6) IS 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, income-based JSA or income-related ESA, council tax or water charges.2IS Sch 9 para 13(2) IS Regs
ESA Sch 8 para 15(2) ESA Regs
HB Sch 5 para 13(2) HB Regs
If it is paid for anything else (eg, tuition fees, books or travel), it is ignored. Once the period of education supported by the loan is completed, a loan that was previously taken into account is then disregarded.3IS Sch 9 para 13(1)(c) IS Regs
ESA Sch 8 para 15(1)(c) ESA Regs
HB Sch 5 para 13(1)(c) HB Regs

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

2 IS Sch 9 para 13(2) IS Regs
ESA Sch 8 para 15(2) ESA Regs
HB Sch 5 para 13(2) HB Regs
»

3 IS Sch 9 para 13(1)(c) IS Regs
ESA Sch 8 para 15(1)(c) ESA Regs
HB Sch 5 para 13(1)(c) HB Regs
»

SDS Individual Training Account payments

The £200 payment is disregarded.1IS Reg 51(3)(a)(ii) or 62(2)(a) IS Regs
JSA Reg 113(3)(a)(ii) or 131(2)(a) JSA Regs
ESA Reg 107(3)(c) or 132(2)(a) ESA Regs
HB Reg 49(3)(b) or 59(2)(a) HB Regs

1 IS Reg 51(3)(a)(ii) or 62(2)(a) IS Regs
JSA Reg 113(3)(a)(ii) or 131(2)(a) JSA Regs
ESA Reg 107(3)(c) or 132(2)(a) ESA Regs
HB Reg 49(3)(b) or 59(2)(a) HB Regs
»

5. Earnings

Your earnings and your partner’s earnings are taken into account in the benefit assessment. Your net weekly earnings 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. Of the following, the highest disregard(s) that applies in your circumstances is deducted from your earnings:

•£25 for lone parents claiming housing benefit (HB);

•£20 for lone parents claiming income support (IS) or income-based jobseeker’s allowance;

•£20 for those who get a disability premium;

•£20 for those who get a work-related activity or support component in their HB applicable amount. For those on HB doing permitted work and getting certain other benefits, the disregard can be higher;

•£20 for income-related employment and support (ESA) claimants. This disregard can be higher for those doing permitted work;

•£20 for those who get a carer premium;

•£20 for part-time firefighters and some other emergency auxiliaries;

•£10 for couples, whether one or both are working;

•£5 for single people.

For example, if you are a lone parent who is also disabled, you have £25 disregarded for HB and £20 for IS.

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

•a lone parent who is working; or

•in a couple and both of you are working; or

•in a couple, one of you is working and one of you is disabled (eg, gets a disability premium) or is in hospital or prison.

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

For HB, an extra £17.10 is disregarded if you work 16 hours or more and have a child or a disability, or work 30 hours or more and are aged 25 or over (and in some other cases).

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). Other benefits are ignored or partially ignored.

Benefits and tax credits taken into account in full include:

•carer’s allowance (CA);

•child tax credit (CTC) for HB;

•contribution-based JSA;

•contributory ESA;

•incapacity benefit;

•most industrial injuries benefits;

•retirement pension;

•working tax credit.

Benefits and tax credits completely disregarded include:

•adult disability payment;

•attendance allowance;

•Best Start grant;

•CA supplement and the young carer grant;1The Social Security (Scotland) Act 2018 (Consequential Modifications) Order 2018 No.872

•child benefit (but if you still have amounts for children in your IS or JSA, child benefit is taken into account);

•child disability payment;

•CTC for IS, JSA and income-related ESA;

•disability living allowance;

•personal independence payment;

•funeral support payments;

•Scottish child payment.

Benefits and tax credits partly disregarded include widowed parent’s allowance – £10 a week is disregarded for IS, JSA and income-related ESA, £15 a week for HB. You do not get this disregard in full if you already have £10 disregarded from a student loan or £20 disregarded from discretionary fund payments.

1 The Social Security (Scotland) Act 2018 (Consequential Modifications) Order 2018 No.872 »

7. Maintenance

Child maintenance payments are disregarded in full for income support, jobseeker’s allowance, income-related employment and support allowance and housing benefit.

8. Savings and other capital

There are limits on the amount of savings and other capital you can have and still claim benefit. These limits are described below. 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 are over pension age. 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.

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