Hope someone can clarify the situation for me.

I have a young lady on Incapacity Benefit, Income Support, HB & CTB, DLA with middle rate care component.

She is looking to start a FT course which can attract an means tested NHS bursary. However she does not want to apply for one and has been told by the institution that she does not need to.

In terms of benefit entitlement will she be treated as not availing funds she can access and have money treated as notional income?

If she does apply is she guaranteed to get it or is there any element of discretion? You can only deprive yourself of income you might receive if you would be given it upon request.

If your client satisfies the criteria for student funding and NHS funding- which can be found here: http://www.nhsbsa.nhs.uk/Students/827.aspx she will receive the bursary and may even be eligible for reduced-rate student loan. No discretion here. It will be treated as assumed income and taken into consideration when calculating her other benefits.