Benefits for Students in Scotland Handbook
Part 3: Treatment of income
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Part 3: Treatment of income
Chapter 16: How income affects means-tested benefits

This chapter covers:

1. Working out your income (Cross reference)

2. Grants and loans (Cross reference)

3. Dividing student income throughout the year (Cross reference)

4. Discretionary funds and other payments (Cross reference)

5. Earnings (Cross reference)

6. Benefits and tax credits (Cross reference)

7. Maintenance (Cross reference)

8. Savings and capital (Cross reference)

 

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 17. Although tax credits are also means tested, the way student and other income is assessed is different (see Chapter 18). 

 

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, income-based jobseeker's allowance or income-related employment and support allowance, 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 the qualifying age for pension credit, 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 benefit (or more benefit) during these months even if your income was too high during the academic year.

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

 

1. Working out your income

The way that student income is taken into account for income support (IS), income-based jobseeker's allowance, income-related employment and support allowance (ESA) and housing benefit (HB) is essentially the same (see Chapter 17 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 Cross reference), to the annual amount of any student loan. Do not include the care leavers' grant, which is paid for the long vacation only.

 Step two

Apply annual disregards.

From the total annual grants and loan, deduct any disregarded amounts for books and equipment, and for travel (see Cross reference).

 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 Cross reference).

 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 or a professional and career development loan (Cross reference), earnings (Cross reference), tariff income from capital (Cross reference), and benefits and tax credits (Cross reference). 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, Cross reference 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 (including a care leavers' grant if you have one).


2. Grants and loans
Grants

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.Footnote 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 Cross reference.

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

£390 for books and equipment;

£303 for travel.

An assessed contribution from a partner or parent counts as income, whether or not you receive it. However for income support (IS) and income-related employment and support allowance (ESA), if you are a disabled student, only include contributions that are actually paid.Footnote 

Ignore any grants for:Footnote

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 jobseeker's allowance (JSA) and income-related ESA only, maintenance of a child dependant. However, if you have been getting IS or JSA since before 6 April 2004 and still have amounts for children included, any grant for the maintenance of a child is taken into account; childcare costs.


Undergraduate grants

The following higher education (HE) grants are disregarded: lone parents' childcare grant;Footnote disabled students' allowance;Footnote lone parents' grant for income-related ESA, and for IS and income-based JSA except for some existing claimants who do not get child tax credit (CTC) (see below); travel expenses;Footnote tuition fees.Footnote

The following HE grants are taken into account:

young students' bursary; independent students' bursary; vacation grant for care leavers; dependants' grant; lone parents' grant. This is always taken into account for housing benefit (HB), but normally disregarded for IS, income-based JSA and income-related ESA.Footnote  It is only taken into account for IS and JSA if you have been getting IS or JSA since before 6 April 2004 with amounts for children included and do not get CTC.
Nursing and midwifery students' grants

The following grants are disregarded:

childcare allowance;

disabled students' allowance; dependants' allowance for a child, and single parents' allowance – for IS, income-based JSA and income-related ESA. However, if you have been getting IS or JSA since before 6 April 2004 and still have amounts for children included, the dependants' allowance for a child and single parents' allowance are taken into account. These allowances are taken into account for HB in all cases.

The following are taken into account:

nursing and midwifery bursary; single parents' allowance – for HB, and some existing IS and JSA claimants with no CTC award (see above); dependants' allowance for an adult; dependants' allowance for a child – for HB, and some existing IS and JSA claimants with no CTC award (see above).
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;Footnote additional support needs for learning allowance for disability costs;Footnote study expenses allowance if paid for books and equipment;Footnote lone parents' childcare grant;Footnote travel expenses allowance.Footnote

The following FE grants are taken into account:

bursary maintenance allowance;

dependants' allowance. FE students who are lone parents and other students eligible for IS (see Cross reference) 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'.Footnote 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.
   
Vacation grant for care leavers Taken into account in full.
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.

Nursing and midwifery student income
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 parents' 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.
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.

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.

 

Student loan

You should include in the student loan:

the maximum loan for which you are eligible, including the young students' bursary.Footnote This is taken into account as your income whether or not you apply for it.Footnote 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 accordingly;

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.Footnote

You should deduct from the annual student loan:

£390 for books and equipment; £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.Footnote


3. Dividing student income throughout the year

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.Footnote Courses that start in August are taken to have an academic year starting on 1 September.Footnote Rules specify exactly the weeks over which the loan and grant are taken into account.


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