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HMRC internal manual

National Minimum Wage Manual

HM Revenue & Customs
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Accommodation and accommodation offset: special provisions for students who also work for their further or higher education institution

Relevant legislation

The legislation that applies to this page is as follows:

For pay reference periods commencing

* on or after 6 April 2015; National Minimum Wage Regulations 2015, regulations 3(1) & 14(2)(a)
* before 6 April 2015; National Minimum Wage Regulations 1999, regulations 2(1) and 31(6) 

In January 2011 the Department for Business, Innovation & Skills published a consultation document which explained that the Government had become aware of potential problems where some Higher Education Institutions both employed students and provided them with accommodation.

The result of the consultation was that Government formed the view that the relationship between higher and further education institutions and their students was primarily educational and, where an institution employed a student on a part-time basis, the relationship was not to be treated as one which the accommodation offset rules were designed to cover. This resulted in a change being made to the accommodation offset rules to provide an exemption for further and higher education institutions.

This means for pay reference periods starting on or after 1 October 2011, where a worker

  • works for a higher or further education institution, and
  • is provided with living accommodation by that institution and
  • is enrolled on a full time course with that institution and
  • is charged for the living accommodation,

the accommodation offset will not apply and the payment/deduction for rent will not reduce national minimum wage pay.

The terms “Further Education Institution” and “Higher Education Institution” are defined in section 91 of the Further and Higher Education Act 1992. If employers are unable to demonstrate that they are either a further or higher education then normal accommodation offset rules will apply.