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New postgraduate loans for part-time study and housing benefit Watch

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    Concerning the new postgraduate student loan for a part-time student. Assuming a £10,000 loan was taken out over two years. £5,000 in each year of the part-time masters degree. Study is for less than 16 hours per week part-time. The amount of the loan exactly covered the tuition fees so no part of the new Student Finance England postgraduate loan could be claimed to be for maintenance costs despite being paid directly to the student. Assuming that existing earnings are at a level making the part-time student eligible for housing benefit (£70 per week) and that the rent was below the LHA.


    Is this loan considered capital or income for the purpose of housing benefit? How is this loan assessed when it comes to housing benefit? Can the student take the loan without losing his rent payments? Using the above figures what would the deduction in housing benefit be, if any?


    Please see below.


    Kind regards
    Sam


    P2.897-P2.919

    Loans and overdrafts

    P2.920

    Before deciding whether any loan or overdraft should be treated as income, it will be necessary to have regard to the particular circumstances of the individual case.

    P2.921 Money which has been obtained by way of a one-off lump sum for example, would normally fall to be treated as capital, see BW1 or BP1 Assessment of capital earlier in this part. This would particularly apply if a payment is for the purchase of a specific item or items such as a car or a holiday.

    P2.922 There may, however be occasions when money obtained by way of a loan or overdraft may amount to other income. An example would be money received in the form of a series of loans which are made periodically to help defray a person’s living costs, although we would suggest that an unused overdraft facility would not fall to be treated as either income or capital.

    P2.923 As the way in which to treat a loan or overdraft depends so much on the individual circumstances, authorities may wish, in some instances, to seek advice from its legal advisers. P2.924-P2.999
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    It's income i'm afraid. They made me repay my H.B. for this very reason. Also you most likely won't be able to get ESA in the same way, if you are on the working element, i'm afraid to say!
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    I would have said income too. But money used for tuition fees isn't counted as income. Money used for living costs / you can use for rent, is counted as income for benefits.
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    If you don't know don't mislead people. That said you might me an undergraduate so different rules apply.

    It is only only 30% income.
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    (Original post by john2054)
    It's income i'm afraid. They made me repay my H.B. for this very reason. Also you most likely won't be able to get ESA in the same way, if you are on the working element, i'm afraid to say!
    If you don't know don't mislead people. That said you might me an undergraduate so different rules apply.

    It is only 30% income.
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    Dear SamWe have only received notification of the amendments to the regulations from the DWP yesterday morning, so here are my revised responses to the questions. As requested I have placed the answers following each question. 1. If the loan were to be £5,000 in year one of the masters programme and the cost of themasters is £5,000 in year 1 and £5,000 in year 2 of the masters, how much isconsidered earnings in each year? What percentage of which figure is used asearnings? The loan is treated as income, not earnings, therefore nothing would be disregarded from ”earnings”. 1. If the loan were to be £5,000 in one year of the masters programme, with a further £5,000 for the year 2, the income from the loans would be 30% of the loan,£1,500. This would be apportioned in the same way previously explained, for the period relating to the period of study. So a course commencing inSeptember 2016, and with a holiday term in the summer term, a weekly incomefrom the £1,500 would be calculated using the number of weeks from the firstfull benefit week in September to the last Sunday in July 2017. In this case that would be September 2016 to 25th June 2017 which is 42 weeks. Fromthe £1,500 we would deduct £303.00 for travel costs and £390.00 for books and equipment. This would leave £807.00 to apportion over the 42 week period at £19.21 per week. This amount would be further reduced by the £10.00 weekly disregard, to £9.21 per week. 2. Is the part of the loan considered earnings (30%) apportioned from start to end of thepostgraduate course throughout the academic year but income calculated April2016 to 31 March 2017 for housing benefit purposes. 2. The loan would not be treated as earnings, but as income. This would be applied for the period of study, so if the course commenced on 14th September 2016, we would apply this income from the following Monday, 19th September 2016 up until Monday 26th June2017. The income for the second year would be applied from the first Monday in September 2017, and would then be removed from the Monday following the completion of the course. 3. Are the disregards of £10 per week plus £632 per annum for each year of thecourse? So is a total of £22pw disregarded from earnings each year? [Regulation 64(5)and regulation 64(2). 3. The £10 disregard will be applied for the period of study, not for the whole year. Therefore if the period of study was calculated as a 42 week period the £10 disregard would be applied for those 42 weeks only. The disregard for Books and Travel, totalling £693 would be applied for each year of study. 4. For example using weekly earnings at the maximum permitted threshold (£73.10) before deductions from housing benefit are made and a simple case for a single person above 30years old with no assets or other income other than the £73.10 per week andpaying rent at or below the permitted LHA rate and in receipt of housingbenefit, what are the weekly earnings in such an example? (basic uncomplicatedcase to illustrate) 4. As in your example, if someone had earnings of £73.10 per week, equal to their Personal Allowance, the additional income from the loan would come to £9.21 per week (asdetailed above). The Housing Benefit award would be reduced by 65% of any income above the Personal Allowance (termed Excess Income). So an ExcessIncome of £9.21 per week would reduce the Housing Benefit award by £5.99. 5. Is the correct figure for total earnings using the below and above examples equal to £73.10pw plus £29pw (30% of £5,000 = £1,500pa or £29pw) less the disregards of £22pw? 5. This is not correct. The income from the loan wouldbe £9.21 per week (30% of £5,000 - £693 ÷ 42 weeks =£19.21. Minus £10 disregard). Is the income calculated 1 April 2016 to 31 March 2017 eventhough it is apportioned, using the size of the loan less the £10pw disregardedless the £632pa disregarded, weekly from 1 October 16 to 31 July 2017? The income is not calculated from 1 April 2016 to 31 March2017 or 52 weeks. It is calculated basedon the period of study. Regards Revenues and Benefits City Treasurers
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    1. If the loan were to be £5,000 in one year, with a further £5,000 for the year 2, the income from the loans would be 30% of the loan, £1,500. This would be apportioned in the same way previously explained, for the period relating to the period of study. So a course commencing in September 2016, and with a holiday term in the summer term, a weekly income from the £1,500 would be calculated using the number of weeks from the first full benefit week in September to the last Sunday in July 2017. In this case that would be September 2016 to 25th June 2017 which is 42 weeks. From the £1,500 we would deduct £303.00 for travel costs and £390.00 for books and equipment. This would leave £807.00 to apportion over the 42 week period at £19.21 per week. This amount would be further reduced by the £10.00 weekly disregard, to £9.21 per week.

    2. The loan would not be treated as earnings, but as income. This would be applied for the period of study, so if the course commenced on 14th September 2016, we would apply this income from the following Monday, 19th September 2016 up until Monday 26th June 2017. The income for the second year would be applied from the first Monday in September 2017, and would then be removed from the Monday following the completion of the course.

    3. Are the disregards of £10 per week plus £632 per annum for each year of the course? So is a total of £22pw disregarded from earnings each year? [Regulation 64(5)and regulation 64(2)]


    3. The £10 disregard will be applied for the period of study, not for the whole year. Therefore if the period of study was calculated as a 42 week period the £10 disregard would be applied for those 42 weeks only. The disregard for Books and Travel, totalling £693 would be applied for each year of study.
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    4. As in your example, if someone had earnings of £73.10 per week, equal to their Personal Allowance, the additional income from the loan would come to £9.21 per week (as detailed above). The Housing Benefit award would be reduced by 65% of any income above the Personal Allowance (termed Excess Income). So an Excess Income of £9.21 per week would reduce the Housing Benefit award by £5.99.

    5. This is not correct. The income from the loan would be £9.21 per week (30% of £5,000 - £693 ÷ 42 weeks =£19.21. Minus £10 disregard).

    The income is not calculated from 1 April 2016 to 31 March 2017 or 52 weeks. It is calculated based on the period of study.


    Regards


    Revenues and Benefits
    City Treasurers
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    The rules for the new Postgraduate Loan are quite specific and specify a set amount of the loan (30%) to be treated as income as per the Statutory Instrument 2016 No. 743 (page 3) that came into force on 4 August 2016.

    http://www.legislation.gov.uk/uksi/2...0160743_en.pdf (see page 3)

    http://www.legislation.gov.uk/uksi/2.../contents/made
    http://www.legislation.gov.uk/uksi/2...lation/59/made
    http://www.legislation.gov.uk/uksi/2...lation/63/made
    http://www.legislation.gov.uk/uksi/2...lation/64/made

    [(2) In regulation 53(1) (students: interpretation), after the definition of “periods of experience” insert— ““postgraduate master’s degree loan” means a loan which a student is eligible to receive under the Education (Postgraduate Master’s Degree Loans) Regulations 2016;”.

    (3) In regulation 59(3) (calculation of grant income)— (a) after “a student loan” insert “or a postgraduate master’s degree loan”; (b) for “such a loan” substitute “a student loan or a postgraduate master’s degree loan. [applied to the below]


    (3) Where a student does not have a student loan and is not treated as possessing such a loan, there shall be excluded from the student’s grant income— (a) the sum of £280 in respect of travel costs; and (b) the sum of £352 towards the costs of books and equipment, whether or not any such costs are incurred.

    (4) In regulation 64 (treatment of student loans)—

    (a) at the end of the heading add “and postgraduate master’s degree loans”;
    (b) in paragraph (1), after “A student loan” insert “and a postgraduate master’s degree loan”;
    (c) in paragraph (3)— (i) after “a student loan” in both places, insert “or a postgraduate master’s degree loan”; (ii) in sub-paragraph (b), for “such a loan” substitute “a student loan or a postgraduate master’s degree loan”.
    (d) after paragraph (4) insert—

    “(4A) Where a student is treated as possessing a postgraduate master’s degree loan under paragraph (3) in respect of an academic year, the amount of that loan to be taken into account as income shall be, subject to paragraph (5), a sum equal to 30 per cent. of the maximum postgraduate master’s degree loan the student is able to acquire in respect of that academic year by taking reasonable steps to do so.”.

    (5) After regulation 64A(a) insert—

    ...end
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    I was making enquiries and getting nowhere even with senior staff within the housing department as new rules had not trickled down to them. So I sent an email and copied a few MP's. Not only did I receive a quick reply after it was referred to a senior employee within the council but at first the answer came back incorrect as the laws were so new even senior council employees didn't know about them. When the new laws relating to the new postgraduate student loan were sent to them a reply was provided using a case, which I have copied above, as an example. It was also explained to me that they had only received the new laws in mid August.If anybody needs the full correspondence please get in touch. I have posted some of it already.
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    Hi sambruce
    I live in Greenwich council but the housing benefit team count £10000 pound as income and reduce my housing benefit £100 every week! I got the decision today!Can I have a copy of the correspondence between you and the revunue and benefit team please?
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    Please send me the correspondence between you and the council. Which council you are in?
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    (Original post by SamBruce1985)
    If you don't know don't mislead people. That said you might me an undergraduate so different rules apply.

    It is only 30% income.
    I do know. They have made me pay back my benefits to the tune of £14 grand, because they said i was not entitled to them. I am now in debt by that amount. This is debt to the benefits office, separate from my uni debt, which i also owe a lot of money to.
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    sambruce, you are hero. Please send me copy of correspondence between you and council. I will send it to my council.
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    (Original post by Tanzim07)
    Hi sambruce
    I live in Greenwich council but the housing benefit team count £10000 pound as income and reduce my housing benefit £100 every week! I got the decision today!Can I have a copy of the correspondence between you and the revunue and benefit team please?
    Hi, Are you a postgraduate student with a postgraduate loan and studying part-time? These new rules do no apply to undergraduate students. The rules are new as of August 2016 so council staff still don't know about them.

    Give them the regulation links listed above. The council correspondence is already listed above. It is only missing the name of the sender. It is an exact copy of the main replies.

    I think there is another post somewhere with a post from the housing policy unit that advises housing benefit departments within the councils and they confirmed it was 30% income only. I sent the enquiry to the minister for work and pensions and that is why I got a response from that unit which doesn't normally give answers to the public.
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    (Original post by john2054)
    I do know. They have made me pay back my benefits to the tune of £14 grand, because they said i was not entitled to them. I am now in debt by that amount. This is debt to the benefits office, separate from my uni debt, which i also owe a lot of money to.

    John come on! Your original post was one day before the new regulations became effective. So what you are talking about cannot be anything to do with the new postgraduate loans introduced in August 2016!

    They made me pay back ..... posted before the new regulations cannot be about the same topic. The first repayments under the new postgraduate loans are in 2 or 3 years time.
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    (Original post by Tanzim07)
    sambruce, you are hero. Please send me copy of correspondence between you and council. I will send it to my council.
    Please copy it from the above those messages starting with Dear Sam ..... . or please send me a message with your email address.
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    (Original post by SamBruce1985)
    John come on! Your original post was one day before the new regulations become effective. So what you are taking about cannot be anything to do with the new postgraduate loans introduced in August 2016!

    They made me pay back ..... posted before the new regulations cannot be about the same topic. The first repayments under the new postgraduate loans are in 2 or 3 years time.
    Why are you having a go at John? I believe he was trying to be helpful. Hs was talking about undergraduate as he experienced the system.

    Isnt postgraduate still overseen by SFE and wouldnt they apply rules on the same basis?
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    (Original post by 999tigger)
    Why are you having a go at John? I believe he was trying to be helpful. Hs was talking about undergraduate as he experienced the system.

    Isnt postgraduate still overseen by SFE and wouldnt they apply rules on the same basis?
    Hi, wasn't having a go. Just correcting him. Sorry if it was harsh. If you see the messages information on this topic is difficult to find and a lot of students facing difficulties with councils that haven't updated their information.

    So it should be made clear that John is mistaken as the regulation is only 6 weeks old.
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    (Original post by SamBruce1985)
    Hi, wasn't having a go. Just correcting him. Sorry if it was harsh. If you see the messages information on this topic is difficult to find and a lot of students facing difficulties with councils that haven't updated their information.

    So it should be made clear that John is mistaken as the regulation is only 6 weeks old.
    Are you saying i have grounds to call up the benefits agency, and dispute the amount they say i owe them, because of some new legistlation??
 
 
 
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