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Discretionary funds
Discretionary support provided when you are in financial difficulty is treated differently from other student grants and loans. This support includes:
    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/university 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.
The FE and HE childcare funds are disregarded.
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) or universal credit (UC), housing costs met by income support (IS), income-based jobseeker’s allowance (JSA) or income-related employment and support allowance (ESA), 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 lower 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 met by HB or UC, housing costs met by IS, income-based JSA or income-related ESA, 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 fund payment, your maximum weekly disregard is £20.
For example, if you have a student loan (and are eligible for the £10 disregard) and regular payments from the HE discretionary fund, £10 a week is disregarded from each. If you also receive regular payments from a charity, these count in full because you have already used up your £20 disregard on the loan and the discretionary fund payment.
Regular payments intended and used for anything else, such as childcare expenses, are completely disregarded.
Voluntary or charitable payments
Regular voluntary or charitable payments are treated as income, with a disregard of up to £20 a week.1The National Health Service (Travelling Expenses and Remission of Charges) (Scotland) Amendment (No.3) Regulations 2007 No.391 One-off or lump-sum voluntary or charitable payments are treated as capital.
 
1     The National Health Service (Travelling Expenses and Remission of Charges) (Scotland) Amendment (No.3) Regulations 2007 No.391 »