The fact that SSIA money would be declared as 'income' for students hoping to receive grants from the government to fund their college expenses, and would therefore push them over the threshold for grant eligibility, arose two months ago.

On 14 August, the Union of Students in Ireland (USI) issued a statement that "some local authorities are improperly refusing maintenance grants to low income students because their parents are in possession of matured SSIAs". USI went on to say, "Matured SSIAs should not be included in this year's reckonable income declarations, as student grants are always based on reckonable income for the previous financial year."

A spokeswoman for the Department of Education told the Sunday Tribune that "for the purposes of determining grant eligibility under the Department's Maintenance Grants Schemes, all investments must be declared, including deposit accounts, saving certificates, life assurance bonds and other financial instruments where the interest/profit is accumulated and paid out as a lump sum at the end of the investment period."

The spokeswoman added, "Given its similarity with 'rollup' savings products, it was deemed appropriate to include, as reckonable income, income from SSIAs on an annual basis."

She said the treatment of the SSIAs in this regard was consistent with the treatment of similar financial products such as Post Office savings certificates.

USI has reacted angrily to the department's stance, saying the delivery of many maintenance grants had already been delayed and that the latest twist was further confusing an already complicated qualification procedure for low-income families and students.

"It's outrageous that the government will penalise families who took their advice to save on an SSIA, " USI education officer Bernadette Farrell said. "They're basically penalising people for going along with a scheme and now we're seeing this first wave of low-income students being refused grants."

Farrell said she knew of at least one case in Galway where a student was refused a grant on the basis of an SSIA maturing, and added that there were similar concerns from students in Cork.

Fine Gael election candidate for Laois/Offaly, Charlie Flanagan, has branded it a "disgrace" that students in the midlands are being refused grants due to SSIAs maturing.

According to USI, students may not receive their grants this year until around Christmas time, such are the extremities of the delays in processing in local authorities.

"This [SSIA factor] is going to have a huge impact on students, " said Farrell, adding that some low income students may not yet know that they won't qualify for a grant.