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Wednesday, 11 September 2019
Page: 2454

Mr TEHAN (Wannon—Minister for Education) (10:04): I move:

That this bill be now read a second time.

The government is committed to ensuring the long-term sustainability of Australia's welfare system so that we can afford the essential services that Australians rely on. Social security welfare cost taxpayers over $172 billion in 2018-19.

This bill introduces a package of measures announced in the 2017-18 budget that act on this commitment to better target student payments. This bill:

restricts the relocation scholarship to students relocating within Australia and studying in Australia;

changes the rates of the pensioner education supplement and the education entry payment to better align with study loads; and

ensures the payment of pensioner education supplement aligns with when students are engaged in study and not during study breaks or holidays.

Several supplementary payments within the social security payments system are provided to encourage people to undertake further education and training to enhance their employment and career prospects. However, these should be better designed to ensure that they are reflective of the student's circumstances and the intent of the payments.

Relocation scholarship payments

From 1 January 2020, this bill will restrict the relocation scholarship to students relocating to study within Australia, and who are relocating to or from regional or remote areas of Australia. This measure is consistent with the simplification of the payment system and aims to streamline the delivery of the relocation scholarship and better reflect its policy intent.

The relocation scholarship primarily assists students from regional and remote areas of Australia moving away from home to study. Continuing to pay the relocation scholarship to students moving away from an overseas home to Australia is not consistent policy with the purpose of the scholarship to assist regional and remote students with additional costs they face. It is also not consistent policy to pay the relocation scholarship to students who relocate to study part of their Australian course overseas.

In 2018, approximately 23,000 students received a relocation scholarship. It is estimated that fewer than 250 students per year will no longer be eligible for the relocation scholarship under this measure, and fewer than 150 students per year studying overseas will no longer be able to access the relocation scholarship.

This measure is estimated to result in savings of approximately $3.5 million over four years, based on a 1 January 2020 start date.

Pensioner education supplement and education entry payment

From 1 January 2020 or the first 1 January or 1 July following royal assent, this bill aligns the pensioner education supplement and education entry payment rates with the study loads undertaken by eligible students.

The pensioner education supplement is a fortnightly supplement to assist income support recipients with some of the ongoing costs of full-time or part-time study, so that they may obtain skills and qualifications to participate in the labour market.

The pensioner education supplement may be paid to eligible people receiving a range of income support payments including but not limited to carer payment, disability support pension, Newstart allowance as a single principal carer and parenting payment single.

The education entry payment provides a lump sum payment to eligible recipients to assist with some of the upfront costs of education and training. It is paid each 12 months or each calendar year, depending on the primary social security payment being received. Recipients may receive the education entry payment as well as the pensioner education supplement.

This bill will align the rates of the pensioner education supplement and education entry payment with the amount of study undertaken through the introduction of four new payment tiers.

Students undertaking part-time study loads do not generally incur the same study costs as those studying full time, as many of the costs associated with study are proportionate to study load. This includes the purchase of textbooks, stationery, and transport costs. It's appropriate for the rates of the pensioner education supplement and education entry payment to reflect this.

Changes to the pensioner education supplement and education entry payment are estimated to result in savings of approximately $80.3 million over four years, based on a 1 July 2020 start date.

By better targeting student payments to ensure they are reflective of a student's circumstances, and the intent of the payments, the government will improve the long-term sustainability of Australia's welfare system so that it remains available for those who need it long into the future.

Debate adjourned.