rent allowance and income protection payment

hi, I applied for rent allowance and received a letter today saying that I am not eligible as I am over the scale. I am very confused as to why they didnt deduct the 75euro or 25% of my excess income. My circumstances are as follows:
I am on the heart transplant list and have been on illness benefit since Jan 2012, my employer paid me for the first 6 months and then I received Income Protection from a policy through work. My normal working week would be 27.5 hours. I am on the local authority housing list. my income is as follows: 247.60 from illness benefit (i have 2 children and are separated) and income protection of 180.37. My rent is 700 monthly which is within the county limit.
Is the income protection considered as an income disregard and if not why...I am livid if it means that for the first 6 months I could have been eligible as I was getting my income...but im still employed I am only out sick??!! please help?

Income protection does not qualify as additional household income, and therefore the disregard does not apply. All income is assessed in full.

The only income which qualifies is:
- income from part-time employment
- income from an employment or training scheme (Community Employment, for example)
- income from full-time employment in certain circumstances

The regulations regarding Rent Supplement are set by Legislation.

thats a bummer as my income now is less than it was when i was getting paid from work for working part time...thanks for your reply.