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Social Security and Other Legislation Amendment (Income Support for Students) Bill 2010

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2008-2009-2010

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

THE SENATE

 

 

 

 

 

 

SOCIAL SECURITY AND OTHER LEGISLATION AMENDMENT (INCOME SUPPORT FOR STUDENTS) BILL 2009

 

 

 

 

 

 

SUPPLEMENTARY EXPLANATORY MEMORANDUM

 

 

 

 

 

 

Amendments and Requests for Amendments to be Moved on Behalf of the Government

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Minister for Education,

the Honourable Julia Gillard MP)

 

 



SOCIAL SECURITY AND OTHER LEGISLATION AMENDMENT (INCOME SUPPORT FOR STUDENTS) BILL 2009

 

 

 

OUTLINE

 

As the Social Security and Other Legislation Amendment (Income Support for Students) Bill 2009 (the Bill) did not pass through Parliament in the 2009 Spring sittings, changes to the proposed start date of the measures, which were originally due to commence on 1 January 2010, are required as retrospective commencement of the measures would result in undesirable consequences.

 

Other changes maintain the workforce participation criteria from 1 January 2011 for certain rural young people where the geographic location of their family home requires them to relocate to study.

 

The measures in the bill will now be implemented in three tranches. The first tranche of reforms will start on 1 April 2010 and will include the lowering of the age of independence, changes to the means test treatment of equity and merit based scholarships and the introduction of the Student Start-Up and Relocation Scholarships.

 

A second tranche of reforms will start on 1 July 2010 and will include the relaxation of the parental income test for payment of Youth Allowance and the tightening of the workforce participation criteria for payment of for Youth Allowance as an independent person.

 

The third tranche will start on 1 January 2011 and will maintain the workforce participation criteria for certain rural young people.

 

 

FINANCIAL IMPACT

 

The total estimated financial impact of this bill is $125.656m over five years.  Note that this includes the costs of the masters by coursework measure, which is part of the package but not included in the bill.

NOTES ON AMENDMENTS

 

Amendment 1

 

Amendment 1 will make a number of changes to the commencement table contained in clause 2.

 

This amendment will change the commencement date of the changes to the workforce participation criteria for payment of Youth Allowance as an independent person and the changes to the Parental Income Test to 1 July 2010 and the commencement of the other provisions, including the provisions relating to the new student start-up and relocation scholarships, to 1 April 2010.

 

 

Amendments 2 and 3

 

Amends subsection 1067A(4).

 

Subsection 1067A(4) allows a person to be independent because of the person’s age. Currently, a person is independent if the person is at least 25 years old. The bill proposed to reduce this age to 22 years over the next three years as follows:

-           24 years for the year 2010

-           23 years for the year 2011; and

-           22 years for a year after 2011.

 

However, due to the delayed passage of the bill, the reduction in the age to 24 years will apply for the period 1 April 2010 until 31 December 2010. This amendment is consequential to the delayed commencement of the provisions in the bill.

 

Amendment 4 is an application provision which provides that the amendment made by amendment 3 applies for the purposes of working out a person’s eligibility for, or amount of, youth allowance for a day, or fares allowance for a journey on a day, that is on or after 1 April 2010.

 

 

Amendment 4

 

Inserts a reference to new subsection 1067A(10E) into new subsection 1067A(10A). The effect of this is that where a person satisfies the criteria contained in new subsection 10E, they will be able to be independent under paragraphs 1067A(10)(b) and (c) which are being otherwise disapplied by new subsection 1067A(10A).

 

 

Amendment 5

 

Amends the date in proposed new subsection 1067A(10B) from 1 January 2010 to     1 July 2010 as a result of the delayed implementation dates of the measures.

 

 

 

Amendment 6

 

Inserts new subsections 1067A(10E), (10F), (10G) and (10H). Where a person satisfies the criteria contained in new subsection 10E they will be able to be independent on the two workforce participation criteria contained in paragraphs 1067A(10)(b) and (c) which are being otherwise disapplied by Item 3.

 

A person will satisfy the criteria contained in new subsection 10E where:

·          the person’s family home (that is, the principal home of the natural or adoptive parent/s with whom the young person normally lives, or last lived with) is in a location categorised under the Remoteness Structure as Outer Regional Australia, Remote Australia or Very Remote Australia; and

·          the person is required to live away from home as prescribed in section 1067D; and

·          the person is undertaking full-time study; and

·          the person’s combined parental income (as defined in point 1067G-F10 of the Youth Allowance Rate Calculator in section 1067G) for the appropriate tax year is less than $150 000.

 

Undertaking full-time study is defined in section 541B of the Act.

 

New subsection 1067A(10F) provides that the Remoteness Structure referred to in new subsection 10E means:

·          the Remoteness Structure referred to in the document titled “Statistical Geography Volume 1 Australian Standard Geographical Classification (AGSC) July 2006” published by the Australian Statistician; or

·          a replacement document as specified by the Secretary by written determination under new subsection 10G.

 

The document specified by the Secretary must be a document published by the Australian Statistician.

 

New subsection 1067A(10H) clarifies that a determination made by the Secretary under new subsection 1067A(10G) is not a legislative instrument. This provision is included to assist readers, as the instrument is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003 .

 

 

Amendment 7

 

Inserts new item 3A. This is an application provision for the amendments about workforce participation contained in items 2 and 3. This item provides that:

·          the amendments made to subsections 1067A(1), (10A), (10B), (10C) and (10D) by items 2 and 3 will apply for the purposes of determining a person’s eligibility for, or amount of, youth allowance for a day, or fares allowance for a journey on a day, that is on or after 1 July 2010; and

·          the amendments made to 1067A(10E) and (10F) by item 3 will apply for the purposes of determining a person’s eligibility for, or amount of, youth allowance for a day, or fares allowance for a journey on a day, that is on or after 1 January 2011..

 

 

Amendments 8 and 9

 

Omit and substitute item 5. Item 5 is an application provision which provides that the amendments made to the independence criteria will apply for the purposes of working out a person’s eligibility for, or amount of, youth allowance or fares allowance from 1 April 2010.

 

 

Amendments 10 and 11

 

Make amendments to the application provisions contained at items 11 and 18 of Schedule 1 to provide the amendments to the parental income test will apply from      1 July 2010.

 

 

Amendments 12 and 13

 

These items amend the amount of the Student Start-up Scholarship to $650 for 2010 and $1064 for 2011 and subsequent years. This amount is indexed from 2011 in accordance with CPI.

 

 

Amendment 14

 

Inserts new items 4A and 4B. These items contain transitional rules for the student start-up scholarship payment and the relocation scholarship payment.

 

The transitional rule relating to the student start-up scholarship contained in new item 4A will allow a dependent young person who is undertaking full-time study in an approved scholarship course on 1 April 2010 and who qualifies for youth allowance on or after 1 July 2010 but before 29 July 2010 to receive two payments of the student start-up scholarship in the second half of the 2010 academic year (for most universities, semester 2 2010).  

 

This amendment is being made so that people who would have qualified for two student start-up scholarship instalments in 2010 as a result of the changes to youth allowance, had the changes to the parental income test come into effect from 1 January 2010, will still qualify for the equivalent of two instalments of the student start-up scholarship in 2010.

 

The transitional rule relating to the relocation scholarship payment contained in new item 4B provides that new subsection 592L(2) does not apply to affect the amount of the first relocation scholarship payment for which a person is qualified in 2010.

 

The amount of a relocation scholarship payment is $4000 unless either subsection 592L (2) or (3) applies in which case the relocation scholarship payment is $1000. New subsection 592L(2) provides that if the person became independent for a specified reason or became required to live away from home more than six months ago, and the person undertook an approved course in the previous calendar year, the amount of the relocation scholarship payment will be $1,000, even if the person has not received a relocation scholarship or equivalent before.

 

The effect of the amendment in new item 4A is to allow a person who is not independent but is required to live away from home, who is undertaking full-time study in an approved course on 1 April 2010 and who moved away from home for the purposes of undertaking that study not more than 6 months prior to the course commencing, to still receive the greater amount of $4000.

 

This rationale for this amendment is to prevent any disadvantage to students who were studying in an approved course in 2009 and then relocated in late 2009 or in early 2010 to continue study but who did not qualify for youth allowance until more than 6 months after they relocated as a result of the delayed implementation of the changes to the youth allowance parental income test.

 

 

Amendment 15

 

This amendment is consequential to the delayed commencement of the measures in the bill.

 

 

Amendment 16

 

These amendments will insert new Chapter 2BA into the Act to provide for a scheme for higher education assistance for rural and regional students.

 

New section 1061ZZFW will provide that the Minister must establish, by legislative instrument, a scheme which will provide assistance for people under 25 years old to undertake higher education whose:

·          main place of residence is in a rural or regional area; and

·          who would experience financial hardship in undertaking higher education without the assistance.

 

The scheme will pay $20 million for assistance for these young people between

1 January 2011 and 30 June 2013. New subsection 1061ZZFW(3) allows the Minister to vary the scheme by legislative instrument; however, the total payments paid under the scheme must not be less than $20 million and the day by which that amount is to be paid cannot be delayed.

 

New subsection 1061ZZFW(2) provides a non-exhaustive list of the kinds of matters that the scheme may deal with. This subsection provides the scheme may deal with the following:

·          the form of assistance;

·          the circumstances in which payment is to be made, or assistance is to be provided, to particular persons;

·          the amounts of payments to, or assistance for, particular persons;

·          which persons qualify for payments or assistance;

·          administrative matters, such as determination of entitlement and how and when payments will be made or assistance will be provided.