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Monday, 20 August 2018
Page: 7658

Higher Education

Dear Mrs Wicks

Thank you for your letter of 26 March 2018 regarding petition number EN0476. I appreciate the time you have taken to bring this matter to my attention. Your letter identifies three requests that were raised by the petition, namely:

1) consideration of the cost of supporting other dependent siblings in the Youth Allowance parental income test;

2) access to rent assistance for regional students who need to live away from home to study, but who may not qualify for Youth Allowance due to income tests; and

3) access to Family Tax Benefit (FTB) and a Health Care Card for dependent students aged under 22.

Youth Allowance parental income test — cons ideration of dependent siblings

The Youth Allowance parental income test already considers the cost of supporting other siblings. Through a method known as the 'family pool', dependent siblings who are under 22 years of age are included in the parental income test, resulting in a higher parental income cut-off. For example, in 2018 the combined parental income cut-offs for a family with one, two, or three dependent children are approximately:

At home

one student aged 18-21 studying and living at home $90,000

two students at home (one at school aged 16-17, the other at university aged 18-21) $125,000

three at home: an apprentice (16-17), a tertiary student (18-21) and, a child (13-19) $155,000

Away from home

one student aged 18-21 who is required to live away from home* to study $120,000

one FTB child at home aged 16-17, other student aged 18-21 away from home* $155,000

two students aged 18-21 away from home* to study $190,000

two students aged 18-21 away from home,* and 13-19 year old FTB child at home $225,000

*Note: these cut-offs assume the student living away from home is eligible for the maximum sharer rate of Rent Assistance due to paying more than $240.02 a fortnight in rent.

This means that the parental income test currently increases the parental income cut-off by around $25,000 for each dependent sibling that lives at home, and by around $60,000 for each dependent student that lives away from home.

Rent Assistance for regional students without parental income testing

Commonwealth Rent Assistance (CRA) is a non-taxable income supplement payable with income support payments, FTB Part A, and veterans' service pensions or income support supplements, to eligible Australian individuals and families renting in the private rental market and community housing.

A Youth Allowance recipient may be eligible for CRA in the following circumstances:

dependent living away from home rate;

independent living away from home rate; or

independent at home and is or has been a member of a Youth Allowance couple, or has a dependent child.

CRA cannot be paid to an applicant who is not qualified for a social security pension, benefit or allowance, or qualified to receive FTB Part A at greater than the base rate. This ensures that CRA is targeted to those most in need.

You may be interested to know that dependent Youth Allowance recipients from regional Australia who must move away from home to study may be eligible for the Relocation Scholarship paid at $4,459 for the first year, $2,231 for the second and third years of their studies and $1,115 for each subsequent year they live away from home to study. The amount of the Relocation Scholarship is not reduced by parental income testing.

Family Tax Benefit (FTB) and a Health Care Card for dependent students aged under 22

FTB Part A is the primary form of assistance for families with children aged under 16 and dependent children aged 16-19 in full-time secondary study. A health care card is available to families who receive FTB Part A by fortnightly instalments and whose annual family income is below the lower income free area, currently $52,706.

Youth Allowance is the primary payment for dependent students once they have completed secondary school. However, Youth Allowance may be available to secondary students who are independent, required to live away from home or aged 18 and over.

Families may choose to receive FTB Part A rather than Youth Allowance, if they meet the eligibility requirements for both payments. However, as both payments are intended to provide assistance for day-to-day living costs, a child can only attract FTB Part A for a parent or Youth Allowance in their own right — they cannot receive both payments at the same time. Additionally, Youth Allowance includes higher rates of payment for students required to live away from home, whereas the FTB Part A rate structure does not.

Under current arrangements, dependent secondary students are able to be covered by their family's FTB Health Care Card (up until the end of the calendar year in which they turn 19), while tertiary students (and secondary students aged 19 years and over) are able to apply for a Low Income Health Care Card (LIC).

Students do not need to be receiving an Australian Government payment to be eligible for the LIC, nor is eligibility for the LIC subject to a parental income test. Instead, the student's income should he under $552 a week (the income limit for a single person with no children) for the previous eight weeks. From 1 January 2019, all student payment recipients will automatically be issued a Health Care Card.

Thank you again for raising these matters with me. I hope this information is of assistance.

Yours sincerely,

from the Minister for Social Services, Mr Tehan