The Education (Student Support) (Amendment) (No. 3) Regulations 2018

Regulation 26

SCHEDULE 2

Regulation 157I

“SCHEDULE 6Assessment of eligible part-time student’s household income

Definitions

1.—(1) In this Schedule—

(a)“financial year” means the period of twelve months in respect of which the income of a person whose residual income is calculated under the provisions of this Schedule is computed for the purposes of the income tax legislation which applies to it;

(b)“independent eligible part-time student” has the meaning given in paragraph 2;

(c)“Member State” means a Member State of the EU;

(d)“parent” means a natural or adoptive parent and “child”, “mother” and “father” are to be construed accordingly;

(e)“parent student” means an eligible part-time student who is the parent of an eligible student or an eligible part-time student;

(f)“partner” in relation to an eligible part-time student means any of the following—

(i)the spouse of an eligible part-time student;

(ii)the civil partner of an eligible part-time student;

(iii)a person ordinarily living with an eligible part-time student as if the person were the student’s spouse or civil partner where the student falls within paragraph 2(1)(a);

(g)“partner” in relation to the parent of an eligible part-time student means any of the following other than another parent of the eligible part-time student—

(i)the spouse of an eligible part-time student’s parent;

(ii)the civil partner of an eligible part-time student’s parent;

(iii)a person ordinarily living with the parent of an eligible part-time student as if the person were the parent’s spouse or civil partner;

(h)“preceding financial year” means the financial year immediately preceding the relevant year;

(i)“prior financial year” means the financial year immediately preceding the preceding financial year;

(j)“relevant year” means the academic year of the course in respect of which the household income falls to be assessed;

(k)“residual income” means taxable income after the application of paragraph 4 (in the case of an eligible part-time student), paragraph 5 (in the case of an eligible part-time student’s parent), paragraph 6 (in the case of an eligible part-time student’s partner) or paragraph 7 (in the case of the partner of a an eligible part-time student’s parent) and income referred to in sub-paragraph (2) received net of income tax;

(l)“taxable income” means, in relation to paragraph 4, in respect of the academic year for which an application has been made under regulation 157C and, in relation to paragraph 5, in respect (subject to sub-paragraphs (2), (3) and (4) of paragraph 5) of the prior financial year—

(i)the total income on which a person (“A”) is charged to income tax as determined at Step 1 of the calculation in section 23 of the Income Tax Act 2007(1), together with any payments and other benefits mentioned in section 401(1) of the Income Tax (Earnings and Pensions) Act 2003 (ignoring section 401(2) of that Act)(2), received or treated as received by A, to the extent that they are not a component of the total income on which A is charged to income tax,

(ii)A’s total income from all sources as determined for the purposes of the income tax legislation of another Member State which applies to A’s income, or

(iii)where the legislation of more than one Member State applies to the period, A’s total income from all sources as determined for the purposes of the income tax legislation under which the Secretary of State considers that A’s total income in that period is greatest (except as otherwise provided in paragraph 5),

except than no account is taken of income referred to in sub-paragraph (2) paid to another party.

(2) The income referred to in this sub-paragraph is any benefits under a pension arrangement pursuant to an order made under section 23 of the Matrimonial Causes Act 1973(3) which includes provision made by virtue of sections 25B(4) and 25E(3) of that Act or pension benefits under Part 1 of Schedule 5 to the Civil Partnership Act 2004(4) which includes provision made by virtue of Parts 6 and 7 of that Schedule.

Independent eligible part-time student

2.—(1) An independent eligible part-time student is an eligible part-time student where—

(a)the student is aged 25 or over on the first day of the relevant year;

(b)the student is married or is in a civil partnership before the beginning of the relevant year, whether or not the marriage or civil partnership is still subsisting;

(c)the student has no parent living;

(d)the Secretary of State is satisfied that neither of the student’s parents can be found or that it is not reasonably practicable to get in touch with either of them;

(e)the student has communicated with neither of the student’s parents for the period of one year before the beginning of the relevant year or, in the opinion of the Secretary of State, the student can demonstrate on other grounds that the student is irreconcilably estranged from the student’s parents;

(f)the student was looked after by a local authority (within the meaning of section 22 of the Children Act 1989(5)) or, as the case may be, section 74 of the Social Services and Well-being (Wales) Act 2014(6) throughout any three-month period ending on or after the date on which the student reached the age of 16 and before the first day of the first academic year of the course (“the relevant period”) provided that the student has not in fact at any time during the relevant period been under the charge or control of the student’s parents;

(g)the student’s parents are residing outside the EU and the Secretary of State is satisfied that the assessment of the household income by reference to their residual income would place those parents in jeopardy;

(h)paragraph 5(8) applies and the parent whom the Secretary of State considered the more appropriate for the purposes of that paragraph has died (irrespective of whether the parent in question had a partner);

(i)as at the first day of the relevant year, the student has the care of a person under the age of 18; or

(j)the student (“A”) has supported A out of A’s earnings for any period or periods ending before the first academic year of the course which periods together aggregate not less than three years, and for the purposes of this sub-paragraph A is to be treated as supporting A out of A’s earnings during any period in which—

(i)A was participating in arrangements for training for the unemployed under any scheme operated by, sponsored or funded by any state authority or agency, whether national, regional or local (“a relevant authority”);

(ii)A was in receipt of benefit payable by any relevant authority in respect of a person who is available for employment but who is unemployed;

(iii)A was available for employment and had complied with any requirement of registration imposed by a relevant authority as a condition of entitlement for participation in arrangements for training or receipt of benefit;

(iv)A held a state studentship or comparable award; or

(v)A received any pension, allowance or other benefit paid by any person by reason of a disability to which A is subject, or by reason of confinement, injury or sickness.

(2) An eligible part-time student who qualifies as an independent eligible part-time student under sub-paragraph (1)(i) in respect of an academic year of a designated part-time course retains that status for the duration of the period of eligibility.

Household income

3.—(1) The amount of an eligible part-time student’s household income is—

(a)in the case of an eligible part-time student who is not an independent eligible part-time student, the residual income of the eligible part-time student aggregated with the residual income of the eligible part-time student’s parents (subject to paragraph 5(9)) and the residual income of the partner of the student’s parent (provided that the Secretary of State has selected that parent under paragraph 5(9));

(b)in the case of an independent eligible part-time student who has a partner, the residual income of the eligible part-time student aggregated with the residual income of the eligible part-time student’s partner; or

(c)in the case of an independent eligible part-time student who does not have a partner, the residual income of the eligible part-time student.

(2) In determining the household income under sub-paragraph (1), there is deducted the sum of £1,130—

(a)for each child wholly or mainly financially dependent on the eligible part-time student or the eligible part-time student’s partner; or

(b)for each child other than the eligible part-time student wholly or mainly financially dependent on the eligible part-time student’s parent or the eligible part-time student’s parent’s partner whose residual income is being taken into account.

Calculation of eligible part-time student’s residual income

4.—(1) For the purpose of determining the residual income of an eligible part-time student, there is deducted from the student’s taxable income (unless already deducted in determining taxable income) the aggregate of any amounts falling within any of the following sub-paragraphs—

(a)any remuneration for work done during any academic year of the eligible part-time student’s course, provided that such remuneration does not include any sums paid in respect of any period for which the student has leave of absence or is relieved of the student’s normal duties for the purpose of attending that course;

(b)the gross amount of any premium or other sum paid by the eligible part-time student in relation to a pension (not being a pension payable under a policy of life insurance) in respect of which relief is given under section 188 of the Finance Act 2004(7), or where the eligible part-time student’s income is computed for the purposes of the income tax legislation of another Member State, the gross amount of any such premium or sum in respect of which relief would be given if that legislation made provision equivalent to the Income Tax Acts;

(2) Where the eligible part-time student receives income in a currency other than sterling, the value of that income for the purpose of this paragraph is—

(a)if the student purchases sterling with the income, the amount of sterling the student so receives;

(b)otherwise the value of the sterling which the income would purchase using the average rate published by Her Majesty’s Revenue and Customs for the calendar year which ends before the start of the relevant year.

Calculation of parent’s residual income

5.—(1) For the purposes of determining the residual income of an eligible part-time student’s parent (“A” in this paragraph) there is deducted from the taxable income of A the aggregate of any amounts falling within any of the following sub-paragraphs (unless already deducted in determining a person’s taxable income)—

(a)the gross amount of any premium or sum relating to a pension (not being a premium payable under a policy of life assurance) in respect of which relief is given under section 188 of the Finance Act 2004, or where the income is computed for the purposes of the income tax legislation of another Member State, the gross amount of any such premium in respect of which relief would be given if that legislation made provision equivalent to the Income Tax Acts;

(b)in any case where income is computed for the purposes of the Income Tax Acts by virtue of sub-paragraph (6) any sums equivalent to the deduction mentioned in paragraph (a) of this sub-paragraph, provided that any sums so deducted do not exceed the deductions which would be made if the whole of A’s income were in fact income for the purposes of the Income Tax Acts;

(c)where A is a parent student or A holds a statutory award, £1,130.

(2) Where the Secretary of State is satisfied that the residual income of A in the financial year beginning immediately before the relevant year (“the current financial year”) is likely to be not more than 85 per cent of the sterling value of A’s residual income in the prior financial year the Secretary of State may, for the purpose of enabling the eligible part-time student to attend the course without hardship, ascertain A’s residual income for the current financial year.

(3) In the event that sub-paragraph (2) or this paragraph was applied in the previous academic year of the current course and the Secretary of State is satisfied that the residual income of A in the financial year beginning immediately before the relevant year (“the current financial year”) is likely to be not more than 85 per cent of the sterling value of A’s residual income in the previous financial year the Secretary of State may, for the purpose of enabling the eligible part-time student to attend the course without hardship, ascertain A’s residual income for the current financial year.

(4) In an academic year immediately following one in which the Secretary of State has ascertained A’s residual income for the current financial year under sub-paragraph (2) and, where applicable under sub-paragraph (3) the Secretary of State must ascertain A’s residual income in the preceding financial year.

(5) Where A satisfies the Secretary of State that A’s income is wholly or mainly derived from the profits of a business or profession carried on by A, then any reference in this Schedule to a prior financial year means the earliest period of twelve months which ends after the start of the prior financial year and in respect of which accounts are kept relating to that business or profession.

(6) Where A is in receipt of any income which does not form part of A’s income for the purposes of the Income Tax Acts or the income tax legislation of another Member State by reason only that—

(a)A is not resident or domiciled in the United Kingdom, or where A’s income is computed as for the purposes of the income tax legislation of another Member State, not so resident or domiciled in that Member State,

(b)the income does not arise in the United Kingdom, or where A’s income is computed as for the purposes of the income tax legislation of another Member State, does not arise in that Member State, or

(c)the income arises from an office, service or employment, income from which is exempt from tax in pursuance of any legislation,

A’s taxable income for the purposes of this Schedule is computed as though the income under this sub-paragraph were part of A’s income for the purposes of the Income Tax Acts or the income tax legislation of another Member State, as the case may be.

(7) Where A’s income is computed as for the purposes of the income tax legislation of another Member State, it is computed under the provisions of this Schedule in the currency of that Member State and A’s income for the purposes of this Schedule is the sterling value of that income determined in accordance with the average rate published by Her Majesty’s Revenue and Customs for the calendar year which ends before the end of the prior financial year.

(8) Where one of the eligible part-time student’s parents dies either before or during the relevant year and that parent’s income has been or would be taken into account for the purpose of determining the household income, the household income is—

(a)where the parent dies before the relevant year, determined by reference to the income of the surviving parent; or

(b)where the parent dies during the relevant year, the aggregate of—

(i)the appropriate proportion of the household income determined by reference to the income of both parents, being the proportion in respect of that part of the relevant year during which both parents were alive; and

(ii)the appropriate proportion of the household income determined by reference to the income of the surviving parent, being the proportion in respect of that part of the relevant year remaining after the death of the other parent.

(9) Where the Secretary of State determines that the parents are separated for the duration of the relevant year, the household income is determined by reference to the income of whichever parent the Secretary of State considers the more appropriate under the circumstances.

(10) Where the Secretary of State determines that the parents have separated in the course of the relevant year, the household income is determined by reference to the aggregate of—

(a)the appropriate proportion of the household income determined in accordance with sub-paragraph (9), being the proportion in respect of that part of the relevant year during which the parents are separated; and

(b)the appropriate proportion of the household income determined otherwise in respect of the remainder of the relevant year.

Calculation of eligible part-time student’s partner’s residual income

6.—(1) Subject to sub-paragraphs (2), (3) and (4) of this paragraph, an eligible part-time student’s partner’s income is determined in accordance with paragraph 5 (other than sub-paragraphs (7), (8) and (9) of paragraph 5), references to the parent being construed as references to the eligible part-time student’s partner.

(2) Where the Secretary of State determines that the eligible part-time student and the student’s partner are separated for the duration of the relevant year, the partner’s income is not taken into account in determining the household income.

(3) Where the Secretary of State determines that the eligible part-time student and the eligible part-time student’s partner have separated in the course of the relevant year, the partner’s income is determined by reference to the partner’s income under sub-paragraph (1) divided by fifty-two and multiplied by the number of complete weeks in the relevant year for which the Secretary of State determines that the eligible part-time student and the eligible part-time student’s partner are not separated.

(4) Where an eligible part-time student has more than one partner in any one academic year, the provisions of this paragraph apply in relation to each.

Calculation of parent’s partner’s residual income

7.  The income of an eligible part-time student’s parent’s partner whose income is part of the household income by virtue of paragraph 3(1)(a) is determined in accordance with paragraph 6 and—

(a)references to the eligible part-time student’s partner are to be construed as references to the eligible part-time student’s parent’s partner; and

(b)references to the eligible part-time student are to be construed as references to the eligible part-time student’s parent.”