Students, income and benefit – an update
New regulations (The Social Security Amendment (Students and Income-related Benefits) Regulations 2001, SI No.2319) came into force in August. Peter Turville describes the new rules as well as some additional information on different forms of funding. This information updates pp589-599 of the 2001/2002 Welfare Benefits Handbook, and should be read in conjunction with the information there.

Learner support funds and NHS bursaries
Grants – an update
Loans – an update
Academic year
Calculating loan income
Abandoning or dismissal from the course
Some additional points about student financial support

Learner support funds and NHS bursaries
Those studying at a college of further education may be able to apply for discretionary grants (known as ‘learner support funds’) depending on their circumstances. These grants are treated as grant income when calculating benefit.

If the student is attending a health related course they may be entitled to an NHS bursary. There are two types of NHS bursary:

• non-means tested bursary available for nursing and midwifery diploma courses. Diploma students are not eligible to apply for a student loan, therefore, no notional loan income should be taken into account;
• means tested bursaries are available for some other health related courses. Students attending such courses are eligible to apply for a student loan, but at a lower rate. Only this lower rate should be taken into account as notional loan income.[footnote 1]
  

Grants – an update
NHS bursaries paid to students in England and Wales are paid in monthly instalments. For income-based jobseeker’s allowance (JSA), income support (IS), housing benefit (HB) and/or council tax benefit (CTB) the bursary (including any supplementary allowances for dependants) should be taken into account over 52 or 53 weeks (benefit weeks sometimes run to 53 weeks including part weeks).[footnote 2] For HB/CTB guidance to decision makers says that, for health related courses in Scotland, NHS bursaries (including any dependants allowance) should be taken into account over the period for which they are paid.[footnote 3] For working families’ tax credit (WFTC) and disabled person’s tax credit (DPTC) NHS bursaries are taken into account over 52 weeks.

For income-based JSA/IS/HB/CTB, if the student receives a supplementary allowance, as part of an NHS bursary or under the Education (Mandatory Awards) Regulations, for dependants or because they are an older student, these allowances are apportioned over 52 or 53 weeks.[footnote 4] This includes the final year of the course [footnote 5] – ie, they are treated as having this income for a period after the last day of the course.

If the student receives a supplementary allowance for dependants under the Education (Student Support) Regulations or any other source (except an NHS bursary or the Education (Mandatory Awards) Regulations) the allowance is apportioned over the same period as a student loan regardless of whether they are entitled to, or receive, a student loan.[footnote 6] Note that students on health related courses, except nursing and midwifery diploma courses, may be eligible for supplementary allowances for dependants under both an NHS bursary and (reduced rate) student loan. These separate dependants allowances will be taken into account over different periods.

Grant income which is ignored includes:[footnote 7]

• if the grant includes a specific amount to cover the costs of books and equipment, the specific amount will be disregarded. If it does not include a specified amount a fixed sum of £319 is ignored (2001/02 academic year);
• a fixed amount of £260 for travelling expenses (2001/2002 academic year, but see also Welfare Benefits Handbook p594);
• a grant paid for childcare costs. But for WFTC/DPTC it is only disregarded if no child care tax credit is included in the calculation;
• for income-based JSA/IS/HB/CTB a grant for an only or eldest dependant child paid under the Education (Student Support) Regulations (£250 for 2001/02);
• for income-based JSA/IS/HB/CTB a grant for expenditure on travel, books or equipment paid under the Education (Student Support) Regulations (£500 for 2001/02) which is payable to a student who also receives a grant in respect of a dependent child under those regulations. This disregard is in addition to the general disregard above for travel, books and equipment;
• a care leaver’s grant paid under the Education (Student Support) regulations (up to £100 a week towards accommodation paid during the long vacation for a student who was aged 21 or under at the start of the course and had been in the care or custody of a local authority) is taken fully into account for each week for which it is paid.

Loans – an update
Academic year
The rules give a definition of an ‘academic year’ for the purposes of calculating loan income. This definition may be different to the actual academic year of the education institution attended.

‘Academic year’ means a period of twelve months beginning on 1 January, 1 April, 1 July or 1 September according to whether your course begins in the winter, the spring, the summer or the autumn respectively. But if the student is required to begin attending the course during August or September (as is the case for most students) and to continue attending through the autumn the ‘academic year’ of the course is treated as beginning in the autumn rather than summer term’ ie, – from 1 September.[footnote 8]

For income-based JSA/IS/HB/CTB, if the ‘academic year’ starts other than on 1 September, the loan which is payable for that ‘academic year’ will be apportioned equally between the weeks in the period beginning with the benefit week immediately following that which includes the first day of that ‘academic year’, and ending with the benefit week which includes the last day of that ‘academic year’. But excluded from that are any benefit weeks falling entirely within the ‘quarter’ during which, in the opinion of the decision maker, the longest vacation falls.

‘Quarter’ means one of the periods from 1 January to 31 March, 1 April to 30 June, 1July to 31 August, or 1 September to 31 December.[footnote 9]

Calculating loan income
If the student receives an NHS bursary for a nursing or midwifery diploma course no loan income should be taken into account. If they are on another health related course only the lower maximum loan rate should be taken into account.

Included among loan income that is ignored are the following:[footnote 10]

• if your loan includes a specific amount to cover the costs of books and equipment, the specific amount will be disregarded. If it does not include a specified amount, a fixed sum of £319 is ignored (2001/02 academic year);
• a fixed amount of £260 for travelling expenses (2001/02 academic year);
• loans to part-time students – some students taking part-time higher education courses may be able to apply for a student loan of up to £500. This payment is ignored because it is less than the standard disregards for travel, books and equipment (see above).[footnote 11]

Abandoning or dismissal from the course
If the student abandons or is dismissed from the course before it finishes there are special rules about how their student loan will be treated.

For income-based JSA/IS/HB/CTB if the course is abandoned before they have received the final instalment of their student loan, it is taken into account using the formula:[footnote 12]

A - (BxC)
_________
D

• A = the maximum amount of student loan available - including any amount, paid as a grant, intended for the maintenance of dependants - that would have been received had the claimant remained a student until the last day of the academic term in which they abandoned or were dismissed from the course, less any disregards that apply. This amount is known as the ‘relevant payment’.
• B = the number of benefit weeks immediately following that which includes the first day of the ‘academic year’ to the benefit week immediately before that which includes the day on which the student abandoned or was dismissed from their course.
• C = the weekly amount of student loan for the ‘academic year’ which would have been taken into account to calculate the claimant’s benefit under the normal rules but without applying the £10 a week disregard. This applies regardless of whether they were actually receiving benefit before they abandoned, or were dismissed, from their course.
• D = the number of benefit weeks beginning with the benefit week which includes the day on which the student abandoned, or were dismissed, from the course and ending with the benefit week which includes the last day of the last ‘quarter’ for which their ‘relevant payment’ (see A above) would have been payable to the student had they remained on their course.

Note that this formula can result in a nil loan income figure depending on the exact date in the term that the student abandons, or is dismissed from, their course.

If the student repays their student loan (either type), for income-based JSA/IS they are treated as still having that loan income [footnote 13] calculated under the above rules. For income-based JSA/IS/HB/CTB guidance to decision makers says they should not be treated as having any loan income, but only if the SLC demand that they repay the loan instalment immediately, not if they repay it voluntarily.[footnote 14] For WFTC/DPTC guidance from the Inland Revenue to decision makers [footnote 15] says that if the claimant stops being a student and makes their claim for benefit after the period covered by their last loan instalment, they are treated as having no loan income. But, if they claim before the end of the period covered by their last loan instalment, the loan will be apportioned as if they were still a student for the whole of their academic year. However, in that case the £10 disregard no longer applies.

Some additional points about student financial support

• For HB/CTB guidance to decision makers [footnote 16] says that incentive payments to teachers (known as ‘training salaries’ or ‘golden hellos’) are treated as income over the period for which they are paid or as capital depending on how they are paid, ie, in instalments or as a lump sum. No disregard should be applied. No information is available on how they should be treated for income-based JSA/IS/WFTC/DPTC.
• For HB/CTB guidance to decision [footnote 17] makers says that lump sum payments to NHS diploma students (nursing and midwifery courses) made when they sign a contract with the NHS are to be treated as capital. No information is available on how they should be treated for income-based JSA/IS/WFTC/DPTC.

Peter Turville is a welfare rights worker at Oxfordshire Welfare Rights

Footnotes
1. HB/CTB circular A31/2001 paras 3.1-3.2 [back to text]
2. IS Reg 62(3A) INcome Support (General)
Regulations 1987 (as amended)
JSA Reg 13 (5) Jobseeekers Allowance Regulations 1995 (as amended)
HB Reg 53 (3A) Housing N+Benefit (Geneeral Regulations 1987 (as amended )
CTB Reg 42(4A) Council Tax BenefitRegulations 1992 (as amended) [back to text]
3. HB/CTC circular A32/2001 para 3.5 [back to text]
4. IS Reg 62(3A) IS Regs
JSA Reg 131(5) JSA Regs
HB Regs 53(3)(b) HB Regs
CTB Reg 42(4)(b) CTB Regs [back to text]
5. R(IS) 15/95 [back to text]
6. IS Reg 62(2B) IS Reg
JSA Reg 131(5A) JSA Regs
HB Regs 53(3B) HB Regs
CTB Reg 42(4B) CTB Regs [back to text]
7. IS Reg 62(2) and (2B) IS Reg
JSA Reg 131(2) and (3A) JSA Regs
WFTC Reg 38(2) FC Regs
DPTC Reg 42(2) DWA Regs
HB Reg 53(2) and (2B) HB Regs
CTB Reg 42(2) and (3A) CTB Regs [back to text]
8. IS Reg 61(1) IS Reg
JSA Reg 130 JSA Regs
HB Reg 46(1) HB Regs
CTB Reg 38(1) CTB Regs
All definition of 'academic year'
DPTC Reg 41 DWA Regs
Both definition of 'year' [back to text]
9. IS Reg 66A(2)(aa) IS Reg
JSA Reg 136(2)(aa) JSA Regs
HB Regs 57A(2)(aa) HB Regs
CTB Reg 47(2)(aa) CTB Regs [back to text]
10.IS Reg 66A(5) IS Reg
JSA Reg 136(5) JSA Regs
WFTC Reg 42A(5) FC Regs
DPTC Reg 47(5) DWA Regs
HB Reg 57A(5) HB Regs
CTB Reg 47(5) CTB Regs [back to text]
11. Circular HB/CTB A32/2000 para 18 [back to text]
12. IS Reg 40(3A)(3AA and (3AB) IS Reg
JSA Reg 103(5)(5ZA) and (5ZB) JSA Regs
HB Regs 33(3A),(3B) and (3C) HB Regs
CTB Reg 24(4),(4A) and (4B) CTB Regs [back to text]]
13. Reg 6(6)(a) SS&CS(DA) Regs [back to text]]
14. IS/JSA memo DMG Vol.6 02/01 paras 17-18
HB/CTB circular A31/2001 para 6.2 [back to text]]
15. para 39320 DMG [draft copy] [back to text]]
16. HB/CTB circular A31/2001 para 5.2 [back to text]]
17. HB/CTB circular A31/2001 para 5.3 [back to text]]

Welfare Rights Bulletin 164 October 2001