16-25 Bursary being treated as income for UC

I have been contacted by someone who works with care leavers who are having their £30 pwk 16-25 Bursary treated as income for UC. 

CPAG Handbook page 875 says that educational maintenance awards and 16 to 19 bursary fund payments should not be taken into account as student income. This comes from the Universal Credit Regulations 2013 reg 68 (7)

(7) In this regulation and regulations 69 to 71—
“grant” means any kind of educational grant or award, excluding a student loan or a payment made under a scheme to enable persons under the age of 21 to complete courses of education or training that are not advanced education;
“the long vacation” is a period of no less than one month which, in the opinion of the Secretary of State, is the longest vacation during a course which is intended to last for two or more years;
“student loan” means a loan towards a student’s maintenance pursuant to any regulations made under section 22 of the Teaching and Higher Education Act 1998(1), section 73 of the Education (Scotland) Act 1980(2) or Article 3 of the Education (Student Support) (Northern Ireland) Order 1998(3) and includes, in Scotland, a young student’s bursary paid under regulation 4(1)(c) of the Students’ Allowances (Scotland) Regulation 2007(4).

This is what the DWP UC Programme team told her
‘it depends on what the bursary actually is, she has stated that it is a discretionary payment that is only award to certain eligible care leavers
Treatment of student income
Undergraduate students
For undergraduate students, 100% of any loan or grant awarded for maintenance or living costs is taken into account when calculating a Universal Credit award.
Regardless of the amount of loan the student accepts, the maximum amount available to them is taken into account when calculating the Universal Credit award. This rule also applies if a loan is available to the student but they don’t apply for it. If the loan received by a student has been reduced through means testing, or because of a grant paid to them, the amount before any reduction is taken into account.
Any loan or grant, or element of a loan or grant for the following is excluded in full, for the Universal Credit award calculation:
•      tuition or examination fees
•      disability
•      maintaining a home other than that at which they reside during the course if not met through the housing costs element
•      books and equipment
•      travel expenses incurred for course attendance
•      childcare costs if not met through the childcare costs award
•      meet the needs of another person but not a joint claimant or child dependent
•      additional expenditure in connection with term time residential study away from the students educational establishment
•     
If an undergraduate loan and grant are received, although 100% of the loan is taken into account, the grant is totally disregarded unless it is for:
•      rent met through the housing element
•      an adult or child dependent that are paid for in the Universal Credit award (including any adult dependent’s grant in a couple case, or amounts for child dependents included in NHS bursaries
But if it is as below
Bursaries
Apprenticeship Top-Up Bursary, LA pays directly to care leavers to maintain their accommodation: complete their apprenticeship.
We have an agreement with HMRC that these payments will be disregarded for tax and national insurance. Our local housing benefit services have also been disregarding our bursary.
Will UCFS accommodate this arrangement?

The answer depends under what provisions the LA is paying the bursary and whether it is paid as an income or a lump sum.:
If the payments are one-off capital payments paid to a UC claimant and therefore not a formerly ‘looked after child’ who would not be entitled to claim UC, we would have no grounds to disregard the capital in UC.  That said, it would not affect the claimant’s UC unless it took the claimant’s capital over the £6k capital limit which seems unlikely for a care leaver.
There were similar enquiries from DfE as their Minister wanted to increase care leaver apprenticeship bursaries and have them disregarded in means tested benefits.  They took our advice and made the payments as capital lump sums.’

Has anyone else come across this?