Student Finance Deduction on Universal Credit

Your student loan and grants may count as unearned income on Universal Credit.  People often talk about how they are deducted £ for £ but there are certain disregards and it can help to understand how the calculations are carried out. 

At Universal Credit Essentials, we see that the majority of the time, the wrong deduction is applied by Universal Credit until the claimant queries or corrects their case manager on it.

A student may be able to qualify for Universal Credit whilst on a full-time course if they are:
  • a student with a child or children in their benefit unit. This includes lone parents, couples, adopters and foster carers, and where either both of them or just one of them is a student
  • a student over the State Pension qualifying age (SPQA) if a member of a couple and the other person in under SPQA
  • a student who is living with a partner and they’re eligible for Universal Credit
  • a disabled student who has already been determined as having Limited Capability for Work (LCW) or Limited Capability for Work and Work Related Activity (LCWRA) and in receipt of one of the following qualifying benefits:
    • Disability Living Allowance
    • Personal Independence Payment
    • Attendance Allowance
    • Armed Forces Independence Payment

If you are disabled and a student at the time of claiming or become a student during the Universal Credit claim and are not receiving one of the qualifying benefits or the Work Capability Assessment (WCA) process has not been completed; the type of course you are doing will determine if you have entitlement to Universal Credit.

If you are not in one of the exception groups and are in full time advanced education or any other full time course of study / training for which a maintenance loan is available, you will not be entitled to Universal Credit from the date they start the course. This also includes any other course (full time or part time) that is not compatible with your work-related requirements. 
​
So what counts as student finance for UC purposes?
Whether you choose to take student finance or not, you will be treated as having the income.  The full amount you would be entitled to is considered in their calculations, whether you choose to accept it.

Step 1 - Total regarded finance

The first step is to work out what is taken into account and what is ignored - ​
Taken into Account
Maintenance Loan (except special support*)
SAAS Bursary
Dependants' Grant
Lone Parent Grant
NHS Bursary
Social Work Bursary
​Extra Weeks' Allowance
Young Students' Bursary

Post Graduate Doctoral Loan (only 30%)
Not Taken into Account
Tuition Fees
Childcare Grant
Childcare Fund Payment
Travel Expenses Bursary or Grant
Parent Learners Allowance
Advanced Learners Loan 
Welsh Learners Grant
Independents' Student Bursary
*Special Support

This is sometimes listed as part of the summary by it's name and will often state - 
Example - Maintenance Loan £11,346, of which the Special Support Element equals £3783.
We would therefore regard £11,346 - £3,783 = £7,563
Other times it will say - 

Maintenance Loan £11.346
Claiming State Benefit - If you're claiming benefits from the Department of Work and Pensions, you should print this summary and show it to them.
The Department of Work and Pensions will only consider any amount over £3,783 of your Maintenance Loan as student income when they....
We would therefore regard - £11,346 - £3,783 = £7,563

Not everyone has Special Support as part of their Maintenance Loan.  It is generally for single or disabled students.  It does not exist for Scottish Finance.
The only amount that should be deducted off
Maintenance Loan​ is an amount for Special Support!
Not everyone is entitled to Special Support-
speak to Student Finance if you have any queries!

Any grants are paid in addition to Maintenance Loan or Bursary (if entitled). 
​If you do not have the name of your grant specified on your student finance breakdown, then UC will take it into account.  Speak to Student Finance if you require evidence of the grant for it to be disregarded.
  • Add up annual amount of finance taken into account all regarded finance, ignoring any disregards and special support.
If you do not have any regarded finance, then Universal Credit will not consider you as a student and there will no deduction.

Step 2 - Number of assessment periods

You need to look at your official course dates and consider how many Universal Credit assessment periods that you will be a student. 

Universal Credit will make a deduction for student finance in the payments relating to - 
  • the assessment period that the course starts in
  • any assessment period that you are enrolled on the course
They will not include - 
  • any assessment period that summer break starts in or
  • any assessment period that falls completely within summer break. 
The payments relating to those assessment periods will have no deductions for student finance.

People with Post Graduate Doctoral Loan will either be treated as having finance for 12 or 24 months.
Example - 

Assessment period dates - 17th to 16th of each month
Course dates - 6th September to 3rd June

This person will be considered a student for assessment periods as follow - 
  1. 17/8 to 16/9
  2. 17/9 to 16/10
  3. 17/10 to 16/11
  4. 17/11 to 16/12
  5. 17/12 to 16/1
  6. 17/1 to 16/2
  7. 17/2 to 16/3
  8. 17/3 to 16/4
  9. 17/4 to 16/5

They will not be considered a student 17/5 to 16/6 because summer break starts on 4th June. Therefore no deduction will be made in June onwards.

In this example, the person is considered a student for 9 assessment periods.
If you do not know your UC assessment period or your course dates then it is impossible to accurately calculate your student finance.  

Your UC assessment period is always one month and starts the day you make your claim and repeats each time.

If you cannot find any course dates on documents, then speak to student services.  You will need to evidence these to Universal Credit (and possibly council tax, if applicable)

The majority of claimants have student finance considered over 8, 9 or 10 assessment periods.
  • Add up the number of assessment periods that deduction will be made

Step 3 - Work out deduction for student finance

To work out the deduction for student finance per assesssment period you need to do the following sum on your calculator - 
Total regarded finance divided by number of assessment periods and then minus £110
= deduction for student finance
Everyone benefits from the £110 disregard per assessment period.  It is classed as allocated for expenses.
  • Write down deduction for student finance

Step 4 - Calculate your UC payment

If you are already an existing Universal Credit claimant then you should already be aware of what your full entitlement is before any deductions.  
Student income deduction falls under 'other income' in step 3.

If you have not yet worked out your maximum Universal Credit award you can do this with How Much Will My Payment Be?

When things go wrong with deduction for student income

Often the deduction that Universal Credit staff work out will differ to what it should be.

The first things to check are 
  • Did you evidence the breakdown of your student finance properly so all disregards can be considered?
  • Did you evidence the official course dates?
  • Has Universal Credit disregarded the special support (if applicable)?

Ask you case manager at the service centre how they reached their calculation and if they need to see a breakdown of the finance again.  Suggest to them how you believe it should be calculated and how many assessment periods will be counted.

If there is still disagreement regarding the amount being deducted then ask for it all to be sent to a decision maker.  This may take a few weeks to come back but a decision maker is far more likely to get it correct.