SO v Secretary of State for Work & Pensions

For Universal Credit, a student’s income is based on the maximum student loan the student would notionally be able to acquire by taking reasonable steps. Where a grant has reduced the available loan, that reduction must be ignored when identifying the maximum loan, unless the grant is of an excepted type. The inquiry is not whether the individual student could realistically have obtained a larger loan by taking different steps. A Welsh Government Learning Grant which is legally part of a maintenance grant remains a grant for this purpose, even if it is given a different administrative label.

The appellant, a full-time student in Wales, received an actual maintenance loan, a Special Support Grant, a Welsh Government Learning Grant and a Parent’s Learning Allowance. The Secretary of State treated her Universal Credit unearned income as including an amount exceeding the loan actually received because the available loan had been reduced by the Welsh Government Learning Grant.

The First-tier Tribunal dismissed her appeal on 22 March 2022 under case reference SC/188/22/00193. She appealed to the Upper Tribunal, arguing that the First-tier Tribunal had misunderstood the interaction between Welsh student-finance legislation and the Universal Credit Regulations 2013. The central issue was whether the grant-related reduction in the available Welsh maintenance loan had to be ignored when calculating student income.

The appeal was dismissed. The First-tier Tribunal had made errors in its reasoning, including treating regulation 68(4) and regulation 70 as relevant. Those provisions apply where student income is grant-based, whereas this appellant had a student loan and regulation 68(2) governed the basis of her student income. The errors were immaterial because the Tribunal reached the correct result.

1. Legal character of the Welsh payments. The term Welsh Government Learning Grant was an administrative label, not a separate statutory category. It represented the part of the appellant’s maintenance grant which was not treated as a special support payment under the Education (Student Support) (Wales) Regulations 2018. The maintenance grant reduced the loan available under regulation 56 by £2,939. The Parent’s Learning Allowance was not a re-labelled maintenance grant and did not reduce the available student loan.
2. Universal Credit calculation. Under regulation 68(2) of the Universal Credit Regulations 2013, the appellant’s student income was based on her student loan. Regulation 69(1) required the amount considered to be the maximum loan which a notional student in the appellant’s material circumstances would be able to acquire by taking reasonable steps. Regulation 69(2) required the grant-related reduction to be ignored. The relevant amount was therefore £5,350 plus £2,939, namely £8,289.
3. Meaning of reasonable steps. Regulation 68(5) focuses on the reasonableness of the steps actually taken by the particular student. Regulation 69(1), by using different language, requires a notional assessment and does not require an examination of the individual student’s actual conduct.
4. The First-tier Tribunal’s reasoning was opaque but reached the correct income figure. Its decision did not involve an error on a point of law, and the Upper Tribunal dismissed the appeal under section 11 of the Tribunals, Courts and Enforcement Act 2007.

• Upper Tribunal (Administrative Appeals Chamber): appeal dismissed. The First-tier Tribunal’s decision of 22 March 2022 under case reference SC/188/22/00193 did not involve an error on a point of law.
• First-tier Tribunal (Social Entitlement Chamber): appeal dismissed and the Secretary of State’s Universal Credit income calculation confirmed.