We have seen with the Child Trust Fund that making tax credits entitlement as the qualification for another benefit can cause problems. We are concerned that the complexity of the rules for EMA may also cause people to lose out.

What is the EMA?

Education Maintenance Allowance (EMA) is an income-assessed allowance of up to £30 per week to help with the cost of further education at school or college.  It provides an income to young people (aged 16-19) continuing in education. It is also an incentive to earn awards through good attendance and achieving agreed objectives.

EMA is paid fortnightly directly into the young person’s bank account. The young person can spend the EMA on whatever they want. The annual income of the household in which the young person lives is the determinant of the level of the allowance.

But what is household income?

The EMA law determines that “household income” is to be calculated in the same way as it is calculated for the purposes of the child tax credit.

The household income, as declared for tax credit purposes, for the tax year 2007/08 is relevant for determining awards for courses starting 1 September 2008 to 31 August 2009. The figure used should be taken from page 2 of the finalising award (form TC602E) and described as “Total income for the year from 6 April 2007 to 5 April 2008”.

This figure should not be confused with the income on which the tax credits award is finalised, which can be for a different period.  

Confusion depending upon where you are to be educated

Although the EMA is a national scheme, confusingly the rules are different in each of the four countries of the United Kingdom.

Where you live	Where you study	What type of EMA you get
England	Scotland	Scottish EMA
England	Wales	Welsh EMA
England	Northern Ireland	Northern Irish EMA
Wales	England	English EMA
Scotland	England	English EMA
Northern Ireland	England	English EMA

This matters because in each country the level of income that determines entitlement is different, with England being less generous than the other countries. £30,810 is the ceiling in England, £32,316 in Scotland with the other countries in between.

EMA is a very blunt instrument as it uses historical tax credit data. If someone had an income of £33,000 in 2007-08, but is now out of work and on income support in 2008-9, then their 16 year old may be denied EMA starting in this September. However, as these rules vary between countries, it is always worth asking whether your current circumstances can be taken into account.

What does government information tell us?

Our review of government information sources makes us worry that young people and their parents may be misled as to entitlement through complexity and lack of clear explanation.

Each country of the UK has its own website providing details of the EMA:

England 

Northern Ireland

Scotland 

Wales 

Generally the sites are not good at making clear the differences between the academic year and the basis year for income.

Mostly the evidence of income called for is from tax credits, but in some places the sites indicate that income tax alternatives are acceptable. These may give different answers as income tax rules are different to tax credits rules. If claimants understand these differences then we suggest that they take the alternative which produces the lower income figure.

It is also very confusing that the leading government websites concentrate on giving the less generous figures which are for England.

For examples, see on the:

• Directgov website 
• HMRC website

Similarly, in small samples we undertook of government helplines, it seems they too can mislead because of this complexity.

Join up please

The EMA is a major initiative to improve education standards for families on low incomes. It deserves to be explained well by government and clearly needs more joining up between UK government departments if people are not to be misled.