ERUDIO student loans help

JeLaw

Forever wrote: »

Ah yes, of course! I hope everyone complains to the FOS and the FCA

Agreed! And our MPs (for what it's worth).

anna2007

ericctheking wrote: »

This is the definition of gross income.
Gross income is taxable income or taxable benefits.

Child benefit is not taxable.

I agree, although I always had to declare Child Benefit and Child Tax Credit to the SLC on their form, there's a section specifically for these benefits, found a blank SLC form online (although I see gardenia101 has posted up the page now), ironically on a DCA website, the benefits bit is at section A, page 2:

https://www.dropbox.com/s/53ctuz0278n4y7r/SLC DAF.pdf?dl=0

But just because these benefits were declared, doesn't mean they count towards gross income! There are plenty of examples on the forums where Erudio including CB/CTC and other benefits has taken some over the threshold when added to salary, and that the SLC definitely didn't include these previously (otherwise these people wouldn't have been deferred by the SLC, as salary + benefits would have taken them over the threshold in previous years).

The SLC are a Government agency (or whatever they're called), it's highly likely that they would define gross income in the same way as HMRC.

According to their HMRC's Tax Credits page - working out income - the following are excluded from gross income:

https://www.gov.uk/tax-credits-working-out-income
Don’t include:
maintenance payments received from a former partner
tax credits payments
student loans
student grants, except the Adult Dependants’ Grant or any dependants’ grant in Scotland
income your children have had, unless it’s taxable in your or your partner’s name

Their guide to CTC and WTC, page 21, also states the following types of income are included when working out how much tax credits to pay:

• The following taxable social security benefits:
– carer's allowance
– bereavement allowance
– contribution-based Jobseeker’s Allowance
– contribution-based Employment and Support Allowance
– income support paid to a couple and the person getting it was on strike
– incapacity Benefit paid after the first 28 weeks of incapacity (at the short-term higher and long-term rates, including any child dependency increases paid with these benefits).

But not benefits which are not taxable, such as:
– Child Benefit
– Attendance Allowance
– Disability Living Allowance or Personal Independence Payment
– Council Tax Benefit or Housing Benefit
– income-based Jobseeker’s Allowance
– income-related Employment and Support Allowance

HMRC categories of taxable and non-taxable income:

http://www.hmrc.gov.uk/incometax/taxable-income.htm

And the definition of gross income in the 1998 Regulations:

"income from all sources before deduction for or relief from tax or other statutory charge, but not including any disability related benefits, and less any disability related costs"

This clearly refers to all sources of income liable for, or qualifying for relief from, tax (or other statutory charge). There's no reference to non-taxable income (not the same thing as relief), so this definition fits with HMRC's information on what's included in gross income.

I think the specific exclusion of disability related benefits (some of which are taxable and would therefore usually be classed as gross income) has confused things, and been taken to mean that ALL other types of benefit are included, which simply isn't true.

Sorry for the long post, the point I'm trying to make is that non-taxable benefits or income should not be included by Erudio as gross income!

Hopefully SLC's response to the FOI request will confirm all of this.

Mitch_Sorenstein

I agree 100% with everything you've said there Anna and your post could be the single most important one on this thread.


SLC absolutely DID NOT take into account Child Benefit, Housing Benefit or Tax Credits. I can prove this as my partner's last 2 deferments went through in spite of being over the threshold with those benefits INCLUDED. I managed to circumvent it with Erudio this year simply because the child benefit is paid to me, in my name as I am the full time carer of our children and so my partner was not obliged to include it on the form. Having spoken at length to both the FOS and National Debt Helpline it's pretty clear that, as far as they are concerned, Erudio's definition of what constitutes gross income is not hard and fast nor enforceable. In fact to tell you the truth, they both struggled to give precise guidance to me regarding what I should and shouldn't include as there are a number of highly contentious and debatable grey areas and I don't think anyone really has the facts to call on. Although they both seemed to agree with me that these benefits should not be included, particularly if they haven't been in the past by SLC. Next year however the drop in threshold means that my partner's income and tax credit award will take her just over. Unless it goes back up of course but I don't think it will (I think these !!!!!! will find some way of reducing the threshold further). I'm not sure at this stage what to do next year. The tax credit claim is a joint one and therefore I could argue that 50% of that money is mine. I suspect Erudio would try and counter that somehow but like I said, all the guidance I'm getting, from the bodies that are there to advise and assist us, is that they should not be including these benefits.


I hope this FOI request bears fruit here because it will be a crushing blow to Erudio. If however SLC do not play ball then it will need someone to go to court over this issue. The problem there is that I highly doubt Erudio will take anyone to court over it because they know they will lose and my fear is that unless everyone with one of these loans is made aware, a great many people will not defer when they should be.


As I said earlier in the thread, it will take just one test case to bring this whole thing down in my opinion. Maybe they haven't covered their bases as well as I thought.

Mr_McGuffin

The initial projections from 1988 and 1989 estimated the future profile of repayments, deferment, default and cancellation. If these were applied as a quota or target, then the deferment threshold may have had to be adjusted to achieve this.

The intention to apply a deferment threshold of 85% was announced in October 1989. Estimates for the anticipated profile of future deferment, default and cancellation were made well before this. The loan scheme was introduced on the basis of these projections.

anna2007

@ Mitch - That's good that you have evidence, there are a few other posters on the forums too who can also show that these benefits were excluded by SLC. I don't think it will come to that though, there's no valid exemption that I can see to allow SLC to refuse disclosure of the info requested under FOI.

I read on one of the forums this week that someone had old guidance from the SLC which specifically stated that these benefits weren't included as gross income, trying to find it and will contact the person to ask for a copy. It's possible they were referring to the SLC form posted above, as the big arrows are a bit vague to say the least (I read it as pointing to all of the benefits listed above, plus the less common ones listed below, otherwise why not have just one big arrow pointing to the less common benefits?). But if there's anyone reading this who happens to have SLC guidance from earlier years, maybe you could check what's said and report back here?

Regardless of the big pointy arrows on the form, it's what's stated in the Regulations that counts, and it doesn't refer to non-taxable income at all. If others can read it as meaning ALL sources of income, whether taxable or non-taxable, then seems to me the provision is ambiguous. I'm not reading it a certain way because that's what suits my own situation, in all honesty I hadn't properly looked at it until now, as my income's way below so it doesn't affect me personally at the moment. But reading it as objectively as I can (and disregarding my loathing of all things Erudio), the natural meaning to me is that it refers to income that is either liable for tax, or qualifies for relief from tax. That's supported by the HMRC's (and others) definition of gross income. I'm guessing the reason the benefits at section A have a special place on the form is because they're far more common than the others listed below and/or if you're in receipt of them, it supports the fact that income will be below the threshold?

This whole issue about benefits will hopefully be sorted in your favour by the time you're due to apply for deferment next year. But if not, and your partner's just over the threshold, I'm sure there are perfectly 'legitimate' ways to bring that income down - HM Government and their pals at Wilmington Trust seem to be quite good at it!

Edit: If your tax credits are joint, then they absolutely should be split down the middle (different rates apply to single people). I mentioned this a few posts back, I've always declared our joint tax credits as my income, but I'll be halving it for next year's application (not because I'm close to the deferment level, but because half of that income is technically and legally my husband's). It might be enough to mean you don't have to take a sabbatical next year

fermi

anna2007 wrote: »

If others can read it as meaning ALL sources of income, whether taxable or non-taxable, then seems to me the provision is ambiguous.

That is the way I read it.

Seems to me that trying to read it as only including taxable income is a bit of wishful thinking, and trying to read and/or twist it into saying something that it does not.

""income from all sources before deduction for or relief from tax or other statutory charge, but not including any disability related benefits, and less any disability related costs"

all sources = literally all sources except those specifically excluded.

The "before deduction for or relief from tax or other statutory charge" seems to mean that the gross income figure is calculated before those are taken off those sources where they apply (e.g. gross = taxable before tax + non taxable), not that the gross income figure only includes sources where they apply.

I could be wrong, and I not a lawyer, but the natural meaning of that definition to me includes all taxable and non taxable income apart from the disability related benefits specifically excluded.

I have had a chat with a lawyer though, who agrees with the above, but again lawyers have also been known to be wrong.

Other people are free to read it other ways.

BIS wrote:

[FONT=Arial, serif]Inclusion of benefits in income calculations:[/FONT]

[FONT=Arial, serif]The definition of gross income (for the purposes of MS loan deferment) is prescribed in the Education (Student Loans) Regulations 1998. Benefits such as housing benefit, working tax credit and child benefit are included in the calculation of gross income for the purposes of applying for deferment. However, disability related benefits are excluded from income calculations.[/FONT]

How HMRC calculate what is to be disregarded in for example tax credits is not really relevant, as they are following their own specific definition of income to be disregarded under for example The Tax Credits (Definition and Calculation of Income) Regulations which by definition of those regulations only apply to the tax credit regime and nothing else.

The SLC forms gave a list every year of what sources they excluded, and that list does not include child benefit or any tax credits.

If SLC misapplied the regulations in many or some cases, that is neither here nor there.

Anyway, that is my take on what that definition means.

BIS seems to think the same.

If the FOI reveals something different, then I will be the first to cheer.

gardenia101

fermi wrote: »

That is the way I read it.

Seems to me that trying to read it as only including taxable income is a bit of wishful thinking, and trying to read and/or twist it into saying something that it does not.

""income from all sources before deduction for or relief from tax or other statutory charge, but not including any disability related benefits, and less any disability related costs"

all sources = literally all sources except those specifically excluded.

The "before deduction for or relief from tax or other statutory charge" seems to mean that the gross income figure is calculated before those are taken off those sources where they apply (e.g. gross = taxable before tax + non taxable), not that the gross income figure only includes sources where they apply.

I could be wrong, and I not a lawyer, but the natural meaning of that definition to me includes all taxable and non taxable income apart from the disability related benefits specifically excluded.

I have had a chat with a lawyer though, who agrees with the above, but again lawyers have also been known to be wrong.

Other people are free to read it other ways.

How HMRC calculate what is to be disregarded in for example tax credits is not really relevant, as they are following their own specific definition of income to be disregarded under for example The Tax Credits (Definition and Calculation of Income) Regulations which by definition of those regulations only apply to the tax credit regime and nothing else.

The SLC forms gave a list every year of what sources they excluded, and that list does not include child benefit or any tax credits.

If SLC misapplied the regulations in many or some cases, that is neither here nor there.

Anyway, that is my take on what that definition means.

BIS seems to think the same.

If the FOI reveals something different, then I will be the first to cheer.

I was dreaming about this last night I was painting over entries on my suddenly small child-size bank statement with black Indian ink, but the ink was getting everywhere....can't tell you how relieved I was to come downstairs to an ink-free kitchen :rotfl:

Sounds like I'm trying to hide money & I'm not - just don't want them knowing about my other d/ds etc.

Sadly my initial reading does tend to agree with Fermi's reading above, although I can make it fit into what Anna says too - hope the FOI comes through soon.

Mitch - good that you have proof of having deferment granted even if the benefits would've taken you over the threshold - that must set some kind of precedent, surely?

anna2007

@ Fermi I can assure you it's not wishful thinking, although obviously it's my preferred interpretation!

I can see how "all sources" can be read to include non-taxable, but if you link it with what follows, then the natural meaning to me is taxable income (excluding taxable disability related benefits). Add to that the generally accepted meaning of gross income to be taxable income, and the way SLC applied the regulations in cases near the threshold, i.e. excluded non-taxable benefits, which absolutely does matter (and I haven't seen one person post to refute this and say these benefits were included).

Unfortunately, I don't believe a word out of BIS's mouth, so not particularly interested in what they have to say on it. And yes, lawyers can be wrong, happened on the T-Mobile thread I was on last year, he was the only one who sided with TM, turns out they were wrong.

Found the post re old SLC document:
"i found one of the help sheets you used to get with the defferal forms.
it clearly states you must state what state benefits you receive but these are not counted in your gross income.
listed are Housing benefit,tax credits , child benefit and others".

Will PM the member, see if I can get a copy of the helpsheet.

fermi

anna2007 wrote: »

@ Fermi I can assure you it's not wishful thinking, although obviously it's my preferred interpretation!

I can see how "all sources" can be read to include non-taxable, but if you link it with what follows, then the natural meaning to me is taxable income (excluding taxable disability related benefits).

You are making a link that doesn't exist though. It does not say anything that says all the sources must be taxable ones, just that the gross is before any deductions. On non taxable sources there will be no deductions, but that does not exclude them.

Put it another way....

All income before tax is not equal to only taxable income.

anna2007 wrote: »

Found the post re old SLC document:
"i found one of the help sheets you used to get with the defferal forms.
it clearly states you must state what state benefits you receive but these are not counted in your gross income.
listed are Housing benefit,tax credits , child benefit and others".

Will PM the member, see if I can get a copy of the helpsheet.

I've seen that post on CAG, and it seems they have misconstrued what the statement on exclusion with the arrow is pointing at.

It is pointing at the disability related benefit list set out in the lower part of the form, and not the upper part of the form with the other type of benefit. Easy mistake to make, but still a mistake.

As previously pointed out.



I haven't saved every single one of mine, but have 3 or 4 and none of them exclude those CB and TC, but do give a clear list of the ones that are excluded.

And as far as I ever recall, they have never said those were excluded.

fermi

gardenia101 wrote: »

I'd also like some clarification about when my loans will be wiped. I understand they'll be wiped when I'm 50 (which is only 4 years away now, but if I have to start repaying it will all be paid off before then) but I don't understand the 25 year rule on pre-98 loans. MSE says "earlier of 25 years after repayments were due to start, or when you reach age 50" & my first of 3 loans started in 9/93. Does the 25 year rule for this loan mean that the 25 years started from 7/94 when that first loan effectively finished?

Thanks in advance.

The regulations are these which are mirrored on the loan agreements:

12. The lender will cancel the borrower’s liability to repay the loan if the borrower—

(a)dies,

(b)is not behind on any repayments under any agreement for a student loan and—

(i)was under the age of 40 when his last agreement for a student loan was made and he reaches the age of 50 or when the last agreement for a student loan has been outstanding for not less than 25 years, whichever is the sooner, or

(ii)was aged 40 or older when his last agreement for a student loan was made and he reaches the age of 60, or

(c)if the borrower can show the lender that he gets a disability related benefit and because of his disability is permanently unfit for work.