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 universal credit

This chapter covers:

1. Working out your income (Cross reference)

2. Grants and loans (Cross reference)

3. Dividing income throughout the year (Cross reference)

4. Other payments (Cross reference)

5. Earnings (Cross reference)

6. Benefits (Cross reference)

7. Savings and capital (Cross reference)

This chapter explains how much weekly income is taken into account when working out your entitlement to universal credit (UC). If you are claiming income support, income-based jobseeker’s allowance, income-related employment and support allowance or housing benefit, see Chapter 17. If you are claiming child tax credit or working tax credit, see Chapter 18. 


Basic facts

– Student loans and some grants count as income when working out how much universal credit you can get.

– Loans and grants are taken into account as income during the academic year, but ignored in the summer vacation.

– The maximum amount of student loan to which you are entitled is taken into account as income, whether or not you apply for it.


1. Working out your income

If you have student income (a student loan and grants paid to you for your course), it usually counts as income for universal credit (UC).Footnote This chapter explains how much monthly income counts in the assessment.

 

 

Step one A dd together the annual income from grants and loan.

Add the annual amount of any grants, ignoring those that are disregarded, to the annual amount of any loan (see below).

Step two W ork out the period over which your student income counts.

Calculate this from the month in which you start your course until the month before the summer vacation, or end of your course, as applicable (see Cross reference).

Step three D ivide income throughout the year.

Divide the amount in Step one by the number of months over which your student income counts for that year (see Cross reference).

Step four Deduct d isregard.

Deduct a set amount of £110 from the monthly amount of income from grants and loan.

Step five A dd other income to the monthly amount.

Add any other income taken into account (eg, earnings) to the monthly amount of your grant and loan (see Cross reference). This, added to the total at Step four, is the amount of income used in the UC assessment.


2. Grants and loans
If you get a student loan

If you are eligible for a loan for maintenance, it counts as income when working out universal credit (UC). The maximum loan you could be entitled to is taken into account, as though there were no reduction for household income or another grant.Footnote

Any other grants you receive are disregarded, except for any amount for the maintenance of your partner and/or child(ren), and any specific amount for rent if your UC includes an amount for rent.Footnote A dependants’ grant or lone parents’ grant paid as well as your loan counts as income. A discretionary fund payment is ignored, provided it is not for the maintenance of your partner or child(ren), and not a specified amount for rent that is met by UC.

 

Taken into account Ignored
Loan Independent students’ bursary
Young students’ bursary Tuition fees
Dependants’ grant Disabled students’ allowance
Lone parents’ grant Travel expenses
Childcare grant and childcare fund payments

 


If you do not get a student loan

If you do not get a loan, but you receive a grant, the grant income is taken into account for UC (subject to the disregards below).Footnote A grant is an educational grant or award, and does not include education maintenance allowance payments or other payments for people under 21 to enable them to complete a course of non-advanced education.Footnote

Grant income is completely disregarded if you do not get a loan and the grant is paid for:Footnote

tuition fees or exams;

your disability;

extra costs of residential study away from your usual place of study during term time;

the costs of your normal home (if you live elsewhere during your course), unless these are included in your UC;

the maintenance of someone not included in your UC claim;

books, equipment, course travel costs or childcare costs.

If you get a grant but no loan, and receive a discretionary fund payment, this is disregarded if it is paid for any of the above, and otherwise counts as income.

 

Taken into account Ignored
All students Help with tuition fees
Undergraduate students  
Care experienced students' bursary  
Care experienced accommodation grant  
Nursing and midwifery students
Nursing and midwifery bursary Childcare allowance
Dependants’ allowance for adult and child Disabled students’ allowance
Single parents’ allowance
Further education students
Bursary maintenance allowance Education maintenance allowance
Dependants’ allowance Additional support needs for learning allowance
Study and travel expenses allowance
Childcare grant and childcare fund payments

3. Dividing income throughout the year

Universal credit (UC) is paid monthly, for an ’assessment period’. Each assessment period runs from the day of the month you claimed UC, for one month – eg, if you claim on the second of the month, each assessment period runs from the second of the month to the first of the following month. The annual amount of your student income must be divided over the number of assessment periods in the course year to arrive at the monthly amount that is used to work out UC.

Student income counts for each assessment period during your course, excluding the one at the end of each academic year and those in the long vacation.Footnote

Student income counts as income:

from the start of the assessment period in which the course/course year begins; and

for every subsequent assessment period during the course/course year.

Student income is ignored:Footnote

in the assessment period in which the last week of the course or the start of the long vacation falls;

in any assessment period that falls completely within the long vacation; and

if you abandon or leave your course completely, in the assessment period in which you leave.

Long vacation

The 'long vacation' is the longest holiday in a course which lasts at least two years, and must last for at least one month.Footnote

Once you have calculated the number of assessment periods in the course year, divide the total annual amount of loans and/or grants by this number, and apply the monthly disregard. One hundred and ten pounds of student income is disregarded in each assessment period.Footnote

  

Examples

Laura has a five-year-old daughter and is single. She starts a degree course. Year one of her course runs from 1 October 2018 to 17 May 2019. Her assessment periods run from the third of the month to the second of the following month.

Step one Laura gets a loan of £6,750, independent students' bursary of £875 and lone parents' grant of £1,305.

Step two Her independent students' bursary is disregarded. Her loan and lone parents’ grant (total £8,055) count as income over eight assessment periods in the first year of her course (from 3 September 2018 to 2 May 2019).

Step three £8,055 ÷ 8 = £1,006.88

Step four £1,006.88 – £110 = £896.88

Step five She has no other income. Laura’s UC is calculated on student income of £896.88 a month from 3 September 2018 to 2 May 2019. From 3 May 2019, weekly income from her student funding is nil. Laura’s next UC payment in June 2019 will be based on £0 student funding.


Paula has a seven-year-old son and is single. Her course runs from 3 September 2018 to 24 May 2019. Her assessment periods run from the 14th of the month to the 13th of the following month.

Step one Paula gets a further education bursary maintenance allowance of £1,120 (40 weeks at £28).

Step two Her bursary counts as income over nine assessment periods (from 14 August 2018 to 13 May 2019).

Step three £1,120 ÷ 9 = £124.44

Step four £124.44 – £110 = £14.44

Step five She has no other income. Paula’s UC is calculated on student income of £14.44 a month from 14 August 2018 to 13 May 2019.


4. Other payments
Professional and career development loans

Professional and career development loans count as capital if paid as a lump sum. If paid in instalments, they normally also count as capital.Footnote


SDS Individual Training Account payments

The £200 payment is disregarded.Footnote


5. Earnings

Your earnings and your partner's earnings are taken into account in the universal credit (UC) assessment. Your net monthly earnings are taken into account – ie, after deducting:

income tax;

class 1 national insurance contributions; and

any contribution you make towards a personal or occupational pension.

Some of your earnings are disregarded if you have children or if you are ill or disabled. This is known as a ’work allowance’. The lower work allowance if you get help with housing costs (rent or service charges) in your UC is £198 a month. You get a higher work allowance of £409 if you have no help with housing costs in your UC. Earnings above your work allowance are deducted at 63 pence for every pound above the allowance. If you do not get a work allowance, 63 pence for every pound of your earnings is deducted from your UC amount.

For full details of the way earnings are treated, see CPAG’s Welfare Benefits and Tax Credits Handbook.


6. Benefits
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