Unearned income

Legislation
Guidance
Case law

The rules on assessment of unearned income under universal credit are set out in the Universal Credit Regulations 2013 (SI.No.376/2013).

NB: See below for equivalent legislation in Northern Ireland.

What counts as unearned income	Regulation 66 of SI.No.376/2013	Sets out the benefits and other income, including retirement pension income, that are counted as unearned income.
Definition of retirement pension income	Regulation 67 of SI.No.376/2013	Defines retirement pension income.
Treatment of student income	Regulation 68 of SI.No.376/2013	Sets out which assessment periods student income is to be taken into account for and which parts of student grants are to be taken into account. It also provides for notional income to be taken into account where a student could acquire a loan but hasn’t.
Calculation of student loan income	Regulation 69 of SI.No.376/2013	Sets out the rules as to what proportion of the maximum possible student loan, including for post-graduate study, should be taken into account.
Calculation of student grants	Regulation 70 of SI.No.376/2013	Sets out the amounts to be excluded (such as amounts in respect of disability and for books and equipment) when calculating income from student grants.
Calculation of amount of income in an assessment period	Regulation 71 of SI.No.376/2013	Sets out the formula for assessing income in an assessment period.
Disregarding extra-statutory payments	SI.No.618/2020	Ensure that extra-statutory payments, including compensation for people affected by the Grenfell Tower fire, are disregarded as income and capital

In Northern Ireland, SR.No.216/2016 makes provisions that are largely equivalent to that in Great Britain.

Further explanation of the legislation is set out in guidance. Please note, however, guidance is not binding and cannot override the legislation.

Advice for decision making	Chapter H5	Sets out guidance for decision makers on unearned income.
DWP guidance from parliament.uk	Unearned income	Sets out guidance on unearned income and how it works in universal credit.

Case law provides further interpretation of the legislation and establishes legal precedent.

Upper Tribunal	[2022] UKUT 65 (AAC)	Tribunal was correct to decide that an Irish widow’s pension should be counted as the claimant’s unearned income to be deducted from any calculation of universal credit. More information: Read the rightsnet summary

Upper Tribunal

[2022] UKUT 65 (AAC)

Tribunal was correct to decide that an Irish widow’s pension should be counted as the claimant’s unearned income to be deducted from any calculation of universal credit.