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Thursday, 13 September 2018
Page: 6335

Senator RUSTON (South AustraliaAssistant Minister for International Development and the Pacific) (13:07): The Social Services Legislation Amendment (Student Reform) Bill 2018 introduces changes to improve access to youth allowance for regional, rural and remote students who have moved away from home to study. It will also make technical amendments regarding approved courses for student payments. Schedule 1 of the bill will increase access to youth allowance for regional students who have to move away from home to study. The measures are part of a package of measures announced in the 2018-19 budget that respond to the independent review of regional, rural and remote education. The independent review, carried out by Emeritus Professor John Halsey, identified that young people in regional Australia are half as likely as their city counterparts to have completed a university degree. The review conducted consultations across Australia with educational authorities, peak bodies, schools and communities and received over 300 submissions.

The youth allowance regional workforce independence criteria aim to address the lower participation rates of regional students in tertiary education. They are intended to make it easier for students from regional, rural and remote areas to qualify as independent for youth allowance purposes. When students are regarded as independent, their youth allowance payment is no longer reduced by parental income testing. Regional students can qualify as independent under these criteria if they demonstrate that they are financially self-supporting through paid employment. When it was first introduced in 2011, these criteria required that students prove their independence by showing that they had either been working part time for 15 hours every week over a period of two years since they had last left school or been self-supporting for a period of at least 18 months since they had last finished school by earning at least the equivalent of 75 per cent of wage level A of the national training wage schedule included in a modern award.

The requirement that students engage in employment over an 18-month period after they've finished school meant that many students were deferring their university studies for two years. In 2016, the government announced it would reduce the 18-month self-supporting period to a 14-month period. This means that students can now satisfy the independence criteria by taking a single gap year rather than having to take two gap years. This reduction responded to evidence that, the longer students are disengaged from study, the more likely they are not to recommence study.

To be assessed as independent under the current criteria, students are required to live away from home to undertake full-time study; their combined parental income must be less than $150,000 a year; and a student's family home must be characterised under the remoteness structure as 'inner regional Australia', 'outer regional Australia', 'remote Australia', 'very remote Australia' or on 'Norfolk Island'. The $150,000 parental income threshold was set in 2011 and has remained at $150,000 since its introduction. This threshold is the same, regardless of family size. This doesn't reflect increasing wages or the extra costs associated with raising a larger family. The criteria aim to support regional students, but, due to the normal effects of income growth, fewer families fall under the $150,000 threshold. To address this decline, the bill will increase the threshold from $150,000 to $160,000. In addition, it will introduce a $10,000 per child increase in the parental income cut-off for larger families. It means that, for the average two-child family, the parental income threshold for the youth allowance regional workforce independence criteria will be $170,000, which is a significant increase on $150,000. This improvement will commence from 1 January 2019.

This bill means that more regional students will get more youth allowance in their pockets because students who qualify as independent for youth allowance will not have to have their payments reduced by parental income testing. In addition, feedback from some students has indicated that when they finish school their parental income may be under the threshold, but, by the time they have completed their self-supporting period, their parental income may have increased, therefore preventing them from qualifying as independent. This bill will provide certainty for these students. It contains a provision so that the parental income threshold can be applied to income in the year that precedes the self-supporting period. This means that students who had parental income that was under the threshold at the beginning of the 14-month self-supporting period will be able to use this income assessment when applying for independent status. That way students will know before they decide to take a gap year whether their parental income will be under the threshold.

The bill will provide greater access to youth allowance for regional students. It is expected that the number of students who qualify for youth allowance under these criteria will increase by 75 per cent or about 2,300 individuals. As well as improving access to youth allowance, the schedule also makes some technical amendments to the Social Security Act 1991 and the Social Security (Administration) Act 1999 to address minor legislative anomalies related to the youth allowance maintenance income test reconciliation process and the calculation of the maintenance income test reducibility amount.

Schedule 2 of the bill makes a minor amendment to strengthen the rules relating to courses approved for student payments. This amendment is technical in nature and reflects current arrangements for the payments. The schedule will broaden the legislative instrument-making power for the Student Assistance (Education Institutions and Courses) Determination 2009 (No.2) into the Social Security Act 1991. This will better allow student payment recipients undertaking courses that lose approval for student payments, including master courses, to remain approved in specified circumstances.

In summary, this bill allows for the implementation of measures that will help students from regional, rural and remote Australia who must move from home to study. In addition, this bill ensures recipients of student payments, including Abstudy, who are subject to the maintenance income test receive their proper entitlements. I commend the bill to the Senate.

Question agreed to.

Bill read a second time.