Benefits and tax credits while you’re studying
Date last updated: 3 February 2020
How your benefits may be affected
If you’re applying to Student Finance for your studies, your benefit entitlements may be affected. Use this page to see what impact studying as a higher education student may have on your benefits.
How does studying in higher education affect benefits?
You can combine benefits and student finance in order to support yourself financially during your studies. It’s important to note that you cannot choose to claim benefits instead of applying for student finance if you are entitled to it.
If you don’t apply for student finance, you are treated as receiving it when your entitlement to benefits is calculated. You must tell the offices that pay your benefits and tax credits that you are a student and about the changes to your income.
Certain types of student finance are counted as income when calculating your entitlement to income support, income-related employment and support allowance, income-based jobseeker’s allowance and housing benefit.
Which students loans will affect my benefits?
If you are receive one of the following loans, your benefits will be affected:
- The maximum amount of maintenance loan you are entitled to (even if you do not apply for it), minus the amount of the loan that is for books and equipment, a fixed amount for travel costs, £10 a week general disregard.
Postgraduate student loan
- 30 per cent of your postgraduate loan is classed as income.
Professional and career development loan (that is for your living costs)
- If you receive lump sum payments a hardship fund (England) or financial contingency funds (Wales) for day-to-day living costs, this will be treated as savings rather than income. If the amount you receive is for course-related costs, it is ignored completely
Your benefits may also be affected if you receive an NHS bursary or teacher training bursary. To calculate the correct amount specific to your situation, you will need to seek further advice. You can call our helpline on 0808 802 0925 for more help with this.
How are different benefits affected by student finance?
Different benefits will be affected differently by your student finance income. Click on the benefits you receive, below, to see how they might change.
Note: during the summer break, the student loan for living costs is not normally counted as income. If your child is under the age of five or you are a full-time carer for someone with a disability, you may be able to claim income support during these months. If your children are not young enough for you to claim income support you can claim jobseeker’s allowance. This is the same amount as income support, but you must be able to meet the work-seeking conditions.
Single parents with a child below the age of five can claim income support, but your student finance income may mean that you can only receive income support during the summer break (as your loan is spread over term-time, ie September to June).
An important exception to this is if you are receiving support for mortgage interest payments as part of your income support claim. If this is the case you should get advice as you may continue to receive help with your mortgage interest payments during term-time.
You may also qualify for income support if you do not qualify for student finance. If you live in a Universal Credit area different rules will apply. Check here to see if you live in a Universal Credit area and call our helpline if you do.
You cannot claim jobseeker’s allowance if you are a full-time student, other than during the summer holidays (see below). If your course is partly or fully paid for by certain government funds and you have more than 16 hours guided learning hours a week (eg lectures or workshops), you are treated as in full-time education.
This does not include time you spend studying on your own. Check your learning agreement with your provider if you are not sure. If your course is not partly or fully paid for by certain government funds, you will usually be treated as in full-time education if your college or education provider defines the course as full-time.
If you take a part-time course, you may be able to claim jobseeker’s allowance. You must continue to look for work and be available for work. You will only be treated as available for work by jobcentre plus if:
- You are able to show that the course does not affect the hours you have agreed you are available for work, or
- You are willing and able to give up your course if a suitable job becomes available.
- If you live in a Universal Credit area different rules will apply. Check here to see if you live in a Universal Credit area and call our helpline if you do.
You cannot claim carer’s allowance if you are in full-time education of 21 hours or more a week. This includes individual study time as well as attending classes or lectures.
If you are a part-time student you should check with your college to find out how many hours per week your course requires in study and attendance time. If it is less than 21 hours per week you will be able to continue claiming carer’s allowance.
Employment and support allowance
There are two types of employment and support allowance: contribution-based and income-related. Each has different rules for receiving the benefit while studying. If you are entitled to contribution based employment and support allowance, this should not be affected if you become a student.
You can only usually claim income-related employment and support allowance while studying full-time if you also receive disability living allowance or personal independence payment.
You should be able to study part-time while claiming income-related employment and support allowance. You don’t have to be receiving disability living allowance or personal independence payment. Get advice before starting your course.
Your entitlement to income-related employment and support allowance depends on your income and capital. See page six for details of student income that is taken into account.
Apart from the adult dependents’ grant, student support is not taken into account when calculating tax credits. Unless you have other income, you should get the maximum amount of child tax credit. If you study and work, you have to work 16 hours a week or more to get working tax credit. If you receive the childcare element of working tax credit, you cannot get a childcare grant as well.
If you rent your home and have a low income you can claim housing benefit while you study. Your income and capital will be taken into account. See page six for details of student income that is taken into account. You are likely to receive a higher amount outside of term time as your student loan for living costs is not taken into account then.
Full-time students do not usually have to pay council tax. You will need to inform your local council that you are a student and claim the exemption.
You can apply to your local authority’s council tax reduction scheme if you are a part-time student and claiming benefits or on a low income. The scheme allows residents on low incomes to pay a smaller proportion of their council tax bill. The reduction varies from area to area so you will need to contact your council to check whether you’re eligible and get the correct figure.
Universal credit is a new benefit system that will replace many of the current benefits and tax credits. A small number of single parents with 1 or 2 children can claim universal credit in selected jobcentres.
You can check here to see if you live in a universal credit area. Full-time students cannot normally claim universal credit, however you can if you are responsible for 1 or 2 children.
Part-time students can be accepted for Universal Credit if your course is accepted as being compatible with your work-related requirements. If you are subject to all work-related requirements under Universal Credit you must show that you meet these, despite being on a part-time course.
While most student support income is ignored for the purposes of calculating Universal Credit, certain payments may count as income.