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7. Savings and other capital

There are limits on the amount of savings and other capital you can have and still claim universal credit (UC). Some kinds of capital are not counted in the assessment. For details, see CPAG’s Welfare Benefits Handbook.

One-off lump-sum payments of student income count as capital rather than income. This may include the summer accommodation grant and discretionary fund payments that are not paid regularly or by reference to a period.1

You cannot get UC if your savings or other capital are above £16,000.

If your capital is £6,000 or less, it does not affect your UC at all.

If your capital is between £6,000.01 and £16,000, you are treated as though you have income from this capital of £4.35 a month for every £250 or part of £250 between these limits. For example, if you have savings of £6,525, your assumed income is £13.05 a month.

Reference
References
  • 1

    Reg 46(1)(a) and (3) UC Regs

Basic facts

  • Student loans for maintenance count as income and 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 housing benefit during that period. If your income is too high, your HB is reduced (or may end).
  • The amount of student loan for maintenance you could get is taken into account as income, whether or not you apply for it.
  • If you or your partner are over pension age, your student grant and loan are ignored as income for HB.
  • Student loans are normally not taken into account as income for housing benefit from around the end of June until the beginning of September. You may be able to get more benefit during these months even if your benefit was reduced during the academic year.
  • Some grants are also taken into account as income, but others do not affect housing benefit.

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.1 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 here.

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

  • £390 for books and equipment; and
  • £303 for travel.

An assessed contribution from a partner or parent counts as income, whether or not you receive it.

Ignore any grants for:2

  • tuition fees or exam fees;
  • course-related disability costs;
  • residential study away from your normal home;
  • books and equipment, or travel;
  • childcare costs.

Reference
References
  • 1

    ESA Reg 131(1), definition of ‘grant’, ESA Regs HB Reg 53(1), definition of ‘grant’, HB Regs

  • 2

    ESA Reg 132(2) ESA Regs HB Reg 59(2) HB Regs

1. Working out your income

The way that student income is taken into account for housing benefit (HB) is explained below (see Chapter 12 for universal credit). Chapter 6 outlines the HB calculation step by step. This chapter explains how much weekly income counts in the calculation. Note: if you also get UC, you are passported to HB and don’t need to do a calculation. This may apply if you’re in temporary/specified accommodation and you get UC for your living costs (and you are a student who is eligible for these benefits). If you get no UC due to income, you could still be entitled to HB, and would need to do a calculation.

StepCalculation
Step 1Add together the annual income from grants and loans. Add the annual amount of any student grants, ignoring any that are wholly disregarded (see here), to the annual amount of any student loan for maintenance.
Step 2Apply annual disregards. From the total annual grants and loans, deduct any disregarded amounts for books and equipment, and for travel (see here).
Step 3Divide income into a weekly amount. Divide the annual amount of grants and loans by the number of benefit weeks in the period over which your grants and loan are counted as income for benefit purposes (see here).
Step 4Deduct any weekly disregard. If you have a student loan for maintenance, deduct £10 – this is the weekly disregard.
Step 5Add other income to the weekly amount. Add together any other weekly income – eg, from discretionary funds (here), earnings (here), tariff income from capital (here), and benefits (here). Ignore any amount that is disregarded. This total, added to the weekly grants and loans total at Step 4, is the amount of income used in the housing benefit calculation.

If you want to work out your housing benefit entitlement during the long vacation, here 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 (note that the summer accommodation grant is paid as a lump sum and therefore counts as capital rather than income).

2. Grants and loans

Grants

Undergraduate grants

The following higher education (HE) grants are disregarded:

  • lone parents’ childcare grant;1
  • disabled students’ allowance;2
  • travel expenses;3
  • tuition fees.4

The following HE grants are taken into account:

  • young students’ bursary;
  • independent students’ bursary;
  • estranged students’ bursary;
  • care-experienced students’ bursary;
  • lone parents’ grant.

Reference

Paramedic, nursing and midwifery students’ grants

The following grants are disregarded:

  • childcare allowance;
  • disabled students’ allowance;
  • travel and placement expenses;
  • arguably £5 a day of the paramedic, nursing and midwifery bursary should be ignored as it is paid for travel expenses (see here).

The following are taken into account:

  • paramedic, nursing and midwifery bursary;
  • single parents’ allowance;
  • dependants’ allowance.

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;5
  • additional support needs for learning allowance for disability costs;6
  • study expenses allowance if paid for books and equipment;7
  • lone parents’ childcare grant;8
  • travel expenses allowance.9

The following FE grants are taken into account:

  • bursary maintenance allowance;
  • care-experienced bursary maintenance allowance;
  • dependants’ allowance.

Grants and loans checklist

Student supportTreatment
Undergraduate income
Student loan for maintenance (including young students’ bursary)Disregard: – £390 a year for books and equipment; – £303 a year for travel; – £10 a week (further disregard from loan); – amount of student’s contribution to loan; – partner’s contribution.
Special support loanDisregarded.
Independent students’ bursaryTaken into account in full.
Estranged students’ bursaryTaken into account in full.
Care-experienced students’ bursaryDisregard: – £390 a year for books and equipment; – £303 a year for travel.
Summer accommodation grantTaken into account as capital.
Disabled students’ allowanceDisregarded.
Lone parents’ grantTaken into account in full.
Lone parents’ childcare grantDisregarded.
Travel expensesDisregarded.
Discretionary fundsTaken 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 fundDisregarded.
Part-time fee grantDisregarded.
Paramedic, nursing and midwifery student income
Paramedic, nursing and midwifery bursary*Disregard: – £390 a year for books and equipment; – £303 a year for travel.
Dependants’ allowanceTaken into account in full.
Single parents’ allowanceTaken into account in full.
Childcare allowanceDisregarded.
Disabled students’ allowanceDisregarded.
Travel and placement expensesDisregarded.
Postgraduate income
Tuition fees (including tuition fee loan) and exam feesDisregarded.
Postgraduate living cost loanDisregard: – £390 a year for books and equipment; – £303 a year for travel; – £10 a week (further disregard from loan).
Special support loanDisregarded.
Residential studyDisregarded.
Books, equipment and travelDisregarded.
Maintenance grantDisregard: – £390 a year for books and equipment; – £303 a year for travel.
Further education income
Bursary maintenance allowanceDisregard: – £390 a year for books and equipment; – £303 a year for travel.
Care-experienced bursary maintenance allowanceDisregard: – £390 a year for books and equipment; – £303 a year for travel.
Dependants’ allowanceTaken into account in full.
Education maintenance allowanceDisregarded.
Additional support needs for learning allowanceDisregarded for disability costs.
Study expenses allowanceDisregarded for books and equipment.
Lone parents’ childcare grantDisregarded.
Travel expenses allowanceDisregarded.
Childcare fundDisregarded.
FE discretionary fundTaken into account less weekly disregard if paid for basic living costs. Disregarded if paid for other items.

*Arguably £5 a day of the paramedic, nursing and midwifery bursary should be ignored as it is paid for travel expenses (see here).

Reference
References
  • 1

    Reg 59(2)(h) HB Regs

  • 2

    Reg 59(2)(b) HB Regs

  • 3

    Reg 59(2)(g) HB Regs

  • 4

    Reg 59(2)(a) HB Regs

  • 5

    Sch 5 para 11 HB Regs

  • 7

    Reg 59(2)(f) HB Regs

Student loans for maintenance

You should include in the student loan amount:

  • the maximum loan for maintenance for which you are eligible, including the young students’ bursary.1 This is taken into account as your income whether or not you apply for it, if you could get one by taking ‘reasonable steps’.2 If you have a principled and conscientious objection to taking out a loan (eg, because of religious beliefs), this may mean there are no reasonable steps you can take to get a loan. If this applies, there should be no loan income taken into account3; and
  • the assessed contribution from a parent or partner, whether or not you receive it.

The special support loan is ignored, because it is for course costs such as study and travel costs.4

You should deduct from the annual student loan for maintenance:

  • £390 for books and equipment; and
  • £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.5

Postgraduate living cost loans are taken into account in the same way.

Reference
References
  • 1

    Reg 53(1), definition of ‘student loan’, HB Regs

  • 2

    Reg 64(3) and (4) HB Regs

  • 3

    IB v Gravesham BC and SSWP (HB) [2023] UKUT 193 (AAC)

  • 4

    Reg 64B HB Regs

  • 5

    Reg 64(2) HB Regs

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