ParlInfo - Higher Education and Research Reform Amendment Bill 2014 (Print Version)

Higher Education and Research Reform

Amendment Bill 2014

OUTLINE

The main purpose of this Bill is to enable reforms to expand opportunity and choice in higher education in Australia, and ensure that Australia is not left behind at a time of rising performance by universities around the world.

The Bill reforms higher education by deregulating fees and extending demand driven funding to higher education qualifications below the level of bachelor degree, including higher education diplomas, advanced diplomas, and associate degrees, and also to private universities and non-university higher education providers. The Bill will enable providers to determine the amount that students contribute to the cost of their courses. These changes will encourage innovation and competition among providers, and deliver greater choice and higher quality courses for students. The Bill also restructures Commonwealth subsidies for Commonwealth supported places to ensure a more equal sharing of costs between taxpayers and students.

To improve access to higher education for all Australians, all higher education providers with 500 or more Commonwealth supported places will be required to direct 20 per cent of additional revenue to a Commonwealth Scholarship Scheme. Providers will use this funding to provide opportunities for disadvantaged students â assistance with tuition, accommodation, travel, learning support, and other living costs that might otherwise stand in the way of success.

The Bill includes a number of changes to the Higher Education Loan Programme (HELP) including new indexation arrangements for HELP debts a new minimum repayment threshold, removal of loan fees and lifetime fee limit and discontinuation of the HECS-HELP benefit. These changes are necessary to support equitable treatment of students, regardless of where they choose to study, and improve the financial sustainability of HELP to ensure that affordable access continues to be supported into the future and that no student is required to pay upfront tuition costs to access higher education.

The Bill also makes technical amendments to the Australian Research Council Act 2001 to allow additional investment in research through the Future Fellowships programme, and allows universities to charge Research Training Scheme studentsâ tuition fees up to a specified maximum amount depending on whether the course is a low cost or a high cost course.

Schedule 1 of the Bill provides demand-driven funding for sub-bachelor degrees, such as diplomas, advanced diplomas and associate degrees, and extends Government subsidies to bachelor and sub-bachelor courses at private universities and non-university higher education providers. Schedule 1 reduces subsidies for new Commonwealth supported students at universities by an average of 20 per cent and deregulates fees for Commonwealth supported students by removing the current maximum student contribution amounts. Schedule 1 streamlines the eligibility requirements for Commonwealth assistance. It also provides for the merging of the FEE-HELP and HECS-HELP loan schemes for all higher education students; removes the up-front payment discount for HECS-HELP loans and the voluntary repayment bonus for HELP loans; and removes the FEE-HELP lifetime limit and loan fee.

Schedule 2 of the Bill requires providers with 500 or more equivalent full time Commonwealth supported students to establish a new Commonwealth Scholarship Scheme to support disadvantaged studentsâ access to and participation in higher education. Providers will be required to direct up to 20 per cent of additional revenue that they receive from the deregulation of student contributions to the scheme.

Schedule 3 will change the indexation rate of HELP debts from the current Consumer Price Index (CPI) to the Treasury 10 year bond rate, up to a maximum of six per cent per annum.

Schedule 4 establishes a new minimum repayment threshold for HELP debts of two per cent when a personâs income reaches $50,638 in 2016-17.

Schedule 5 enables universities to charge Research Training Scheme students a capped tuition fee which will be deferrable through HELP. Schedule 5 also amends the ARC Act to allow additional investment in research through the Future Fellowships scheme, apply indexation and add an additional forward estimate amount.

Schedule 6 of the Bill removes the current lifetime limits on VET FEE-HELP loans and the VET FEE-HELP loan fee.

Schedule 7 of the Bill will discontinue the HECS-HELP benefit from 2015.

Schedule 8 of the Bill would replace the current Higher Education Grants Index (HEGI) with the Consumer Price Index (CPI) from 1 January 2016.

Schedule 9 will update the name of the University of Ballarat to Federation University Australia.

Schedule 10 of the Bill will allow certain New Zealand citizens who are Special Category Visa holders to be eligible for HELP assistance from 1 January 2015.

FINANCIAL IMPACT STATEMENT

2014-15 Budget Higher Education reform package

Savings estimated at $3.9 billion in fiscal balance terms over the forward estimates (from 2014-15 to 2016-17). The majority of measures will not commence until 2016 so will not have a financial impact until the 2015â2016 financial year.

Access to HELP for certain New Zealand citizens

At the time of the 2013-14 Budget, the expense was estimated at $10.6 million, in fiscal balance terms, over four years (from 2013/14 to 2016/17).

ARC Act

This Bill commits to spending $760 million for the period 1 July 2014 to 30 June 2018.

REGULATION IMPACT STATEMENT

The Regulation Impact Statement for the 2014â15 Budget Higher Education Reforms appears at the end of this Explanatory Memorandum (Attachment A).

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Higher Education AND RESEARCH REFORM

AMENDMENT BILL 2014

This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Bill

The Higher Education Support Act 2003 (HESA) is the main piece of legislation providing funding for higher education in Australia.

The 2014-15 Budget provided for a major reform package in higher education to expand choice and opportunity for students and encourage competition between providers. Key changes include:

Expanding the scope of the demand driven funding system for higher education: Existing caps on the number of Commonwealth supported places in diploma, advanced diploma and associate degree courses that can be offered by eligible providers will be removed (except for enabling courses, which attract a loading so that providers can provide these courses on a fee-free basis for eligible students). Private universities and non-university higher education providers will be eligible for Commonwealth funding for undergraduate courses. Student places at these providers will be funded at 70 per cent of the rate for universities on the basis that these providers are not required to sustain the same kind of research or meet the same community service obligations as universities.

Fee deregulation: To facilitate the development of price competition in higher education, the provision that limits the maximum amount that a Commonwealth supported student may be charged by a provider will be removed. To promote equity in access, higher education providers will be required to direct up to 20 per cent of additional total revenue to scholarship and equityârelated initiatives.

Improving the sustainability of the HELP scheme: The reforms include a number of measures to improve the sustainability of the HELP scheme, including increasing the indexation of HELP loans to the ten year Treasury bond rate up to a maximum of six per cent, removing FEE-HELP and VET FEE-HELP loan fees, reducing the minimum HELP repayment threshold and discontinuing the HECS-HELP Benefit Scheme.

Other measures, such as expanding access to the HELP scheme for certain New Zealand citizens, providing increased funding for research and allowing students assisted through the Research Training Scheme to be charged capped contributions, and merging HECS-HELP and FEE-HELP, are also contained within the Bill.

Summary of analysis

The measures contained within this package are measured and justifiable.

As a result of these reforms, access to higher education will be expanded. By 2018, more than 80,000 additional students each year will be able to access Government subsidies for their education. For the first time ever, Commonwealth subsidies will provided on a demand driven basis for eligible students enrolling in accredited higher education diplomas, advanced diplomas and associate degrees. These qualifications provide effective pathways for disadvantaged students, and often serve as vocational qualifications in their own right (such as for engineering technologists, construction managers, and paralegals). The Government will no longer discriminate against people who seek to enrol in private higher education providers, including TAFEs.

Large providers will be required to set up a Commonwealth Scholarship scheme to support access and participation for disadvantaged students.

While some measures may result in the increase of fees for students, these must be considered in light of the need to put Australiaâs higher education system on a more sustainable footing, while at the same time contributing to repairing the Budget. The changes are proportionate to those objectives.

Specifically there are two broad areas in the package which could be perceived to have implications for human rights:

The package will expand access for higher education diploma, advanced diploma and associate qualifications and for undergraduate students at private and non-university higher education providers. Similarly access is being expanded to allow for greater Government assistance for New Zealand citizens who came to Australia as children and are long-term residents of this country. For these students, these changes will support the right to higher education.

There is potential for some changes to lead to increased fees and costs for students under the HELP scheme.

- Access to higher education will continue to be fully assured by the HELP scheme, which ensures that students are not required to make an upfront contribution in order to receive higher education and that they will be able to defer the full amount of their tuition fees.

- It should be noted that while fees for some courses may increase, for others fees may decrease.

- These changes are necessary to support high quality higher education and are proportionate to the policy objective of strengthening the higher education system while repairing the Budget.

Analysis of human rights implications

International Covenant on Economic, Social and Cultural Rights (ICESCR)

Article 11: right to an adequate standard of living

This Bill engages with Article 11(1) of the International Covenant on Economic, Social and Cultural Rights (ICESCR) which recognises âthe right of everyone to an adequate standard of livingâ¦including adequate food, clothing and housing, and to the continuous improvement of living conditionsâ.

There are elements within the reform package that may be perceived as relevant to article 11, particularly as they may result in an appearance of rising costs for students. None of these changes will necessitate increased costs for students while they study, as they will continue to be able to defer all tuition fees though the HELP scheme.

Schedule 3 of the Bill introduces a higher rate of indexation for HELP debts. This will not impact on a personâs ability to enjoy an adequate standard of living as they do not have to repay their HELP loan until they reach a minimum income threshold. Additionally, the proportion of their annual income directed towards repayments will not change under this measure. Under the new indexation arrangements, students may take longer to repay their HELP loans, but will not suffer from a reduction in their annual disposable income as a result, and such will not alter their capacity to maintain an adequate standard of living.

Schedule 4 of the Bill establishes a new minimum repayment threshold for HELP loans. The proposed minimum repayment threshold is still substantially above the minimum liveable wage and will be adjusted annually to account for inflation. Additionally, above this new minimum repayment threshold students will pay only two per cent of their annual taxable income. As such the measure is reasonable and proportionate to meet the policy goal of ensuring the long term viability of the HELP scheme.

Furthermore, increased access to education, outlined below, will provide a basis for increased earnings and therefore assure a higher standard of living for many graduates.

Article 12: Right to education

This Bill engages with Article 13(2)(c) of the ICESCR which states that âhigher education shall be made equally accessible to all, on the basis of capacity, by every appropriate means, and in particular by the progressive introduction of free educationâ.

Fee deregulation and expansion of demand driven funding system

Schedule 1 of the Bill substantially expands access to higher education by extending the demand-driven system to diploma, advanced diploma and associate degrees and to bachelor and sub-bachelor courses at private providers and non-university higher education providers.

This measure will provide Commonwealth support for more than 80,000 additional students each year by 2018. This is a significant expansion in the number of Government subsidised places. The additional support provided to students will not only improve access, but also expand opportunity and choice for students in the higher education sector. This will facilitate competition between higher education providers and increase student choice and mobility.

Schedule 1 removes the limits currently placed on student contribution amounts providers can charge.

This measure may result in fees for some courses increasing, and others decreasing as higher education providers seek to compete on price. Competition will keep prices down. Students will continue to be able to defer paying their fees through the HELP scheme.

Schedule 1 of the Bill reduces subsidies for new students at universities by an average of 20 per cent and deregulates fees for Commonwealth supported students by removing the current maximum student contribution amounts. In doing so, this measure also simplifies the existing eight funding clusters into five funding tiers.

This savings measure is proportionate to the policy objective of ensuring long-term financial sustainability necessary to support opportunities in higher education. Providers will have flexibility to manage the financial impact of this under the deregulatory measure described above.

Schedules 1 and 6 of the Bill streamline the HELP loan programs currently available to Commonwealth supported and full feeâpaying students; and remove the FEEâHELP and the VET FEE-HELP lifetime limits and loan fees.

These changes will ensure equitable access for students in a deregulated environment, regardless of the type of course the student studies or which provider they choose. Currently, the amount of FEEâHELP and VET-FEE HELP loan a student can access across their lifetime is capped. This has the effect of potentially excluding students who would be unable to pay any fees over and above the limit upfront. Removing the limit ensures that no personâs access to education will be restricted.

Establishment of a new Commonwealth Scholarship Scheme

Under Schedule 2 of the Bill, higher education providers that have an equivalent Commonwealth subsidised fullâtime student load of 500 or more will be required to direct up to 20 per cent of additional total revenue collected as a result of the deregulation of student contributions to activities to improve access and participation.

This measure will ensure disadvantaged students have the opportunity to access higher education.

Changes to the indexation of HELP debts

Schedule 3 replaces the current CPI indexation of HELP loans with the 10 year Government bond rate, capped at six per cent per annum in order to ensure the sustainability of the HELP scheme. This measure reflects the borrowing cost to the Government, and removes the indirect subsidy that all taxpayers contribute to those higher education students.

Studentsâ access to higher education will not be impeded by this measure as students will only be required to pay back their HELP debt once they start earning over the minimum repayment threshold. There will be no increase to the amount that graduates are required to pay back each year as a result of this measure.

Changes to the minimum repayment income for HELP debts

Schedule 4 will change the minimum repayment threshold for HELP debts to 90 per cent of the current income threshold. Currently, taxpayers are not required to start paying back their HELP loans until their annual incomes reach $53,345. The new threshold at which people will start repaying debts will be $50,638 in 2016-17.

From 1 July 2016, a lower repayment rate of two per cent will apply for those with incomes above the new threshold up to the current minimum threshold. The lower two per cent repayment rate for those above the new threshold will ensure that low-income graduates will not experience a large reduction in their disposable income, while supporting the sustainability of the HELP scheme.

Research funding and research students

Schedule 5 will allow providers to charge Research Training Scheme (RTS) students capped tuition fees.

The cost to students is a small proportion of the total cost of the course and will be deferrable through HELP. This will not restrict access to tertiary education or higher degrees by research and will ensure the long-term sustainability of RTS funding.

Schedule 5 of the Bill also amends the Australian Research Council Act 2001 (ARC Act) to update appropriation amounts by applying indexation and increasing the funding cap for the last year of the forward estimates (the financial year commencing on 1 July 2017) to support financial assistance for approved research programmes administered by the Australian Research Council (ARC).

The measure taken in this Bill will result in a substantial increase in funding to the ARC in the 2017-18 financial year and will promote the quality of research and research training. The programmes supported will fund the highâquality research Australia needs to address the great challenges of our time, to improve the quality of peopleâs lives, to support the development of new industries and to remain competitive in the global knowledge economy.

The amendments only impact on administered special appropriations; they do not alter the substance of the ARC Act or increase departmental funds.

Discontinue HECS-HELP Benefit

Schedule 7 discontinues the HECSâHELP Benefit. The abolition of the Benefit will contribute to repairing the Budget without adverse effects on higher education access. The Benefit was designed to provide an extra incentive for graduates of particular courses, such as education, nursing, mathematics or science, to take up related occupations or work in specified locations by reducing their compulsory HELP repayments. However, uptake of this programme has been lower than expected. Removal of this measure will have no impact on access to higher education for students.

Alteration to HEGI calculation

Currently, grants and student contribution amounts under HESA are indexed each year under the Higher Education Grants Index (HEGI). Schedule 8 replaces the current HEGI indexation with indexation by the CPI. This is part of a Governmentâwide initiative to streamline and simplify indexation rates for Government programmes. Moving to CPI will not decrease spending on higher education grants from year to year. Instead, it reduces the rate of spending growth in order to ensure the long-term sustainability of higher education programmes such as research grants and Australian Postgraduate Awards.

New Zealand Special Category Visa holders

Schedule 10 of the Bill expands access to higher education by allowing certain New Zealand citizens, who hold a Special Category Visa, to access the Australian Governmentâs HELP loans scheme from 1 January 2015. Residency requirements for this measure will ensure that only New Zealand citizens with a demonstrated commitment to living in Australia and contributing to the workforce and economy will be eligible for a HELP loan.

This measure is designed to allow access to the HELP scheme to New Zealand citizens, who are long-term residents of Australia who are not able to access traditional routes to Australian citizenship that are available to citizens of other countries.

International Covenant on Civil and Political Rights

Article 17: Right to privacy and reputation

This Bill engages with Article 17(1) and 17(2) of the International Covenant on Civil and Political Rights (ICCP), which states that âno one shall be subject to arbitrary or unlawful interference with his privacyâ¦nor to unlawful attacks on his honour and reputationâ and that âeveryone has the right to the protection of the law against such interference or attacksâ.

Schedule 1 outlines the eligibility requirements in the Bill, including the requirement that those in management positions in a higher education provider be a fit and proper person. A determination that a person is not fit and proper will be undertaken within Government. The details of the determination, including personal information, will not be distributed or disclosed to the public. This will not impact on a personâs right to privacy and reputation.

Article 26: Right to equality and non discrimination

Schedule 10 of the Bill expands access to higher education by allowing certain New Zealand citizens, who hold a Special Category Visa to access the Australian Governmentâs HELP loans scheme from 1 January 2015. While this may be perceived as discriminating against New Zealanders who do not meet these criteria, the application is proportionate to the objective of the policy, i.e. to allow access to the HELP scheme to New Zealand citizens who have a significant and lasting connection to Australia, but are unable to gain citizenship.

Minor technical amendments

Schedule 9 of the Bill is minor in nature and does not engage any human rights.

The ARC Act funding amendments made by Schedule 5 do not have any human rights implications as they make minor and technical amendments to the ARC Act by applying indexation against appropriations for existing schemes and including an additional figure for the last year of the forward estimates (for the financial year starting on 1 July 2017). These changes allow additional funding to be provided for research programmes.

Conclusion

The Bill is compatible with human rights.

Higher Education and research reform

amendment bill 2014

NOTES ON CLAUSES

Clause 1 - Short title

Clause 1 provides for the Act to be cited as the Higher Education and Research Reform Amendment Act 2014.

Clause 2 - Commencement

Subclause 2(1) inserts a three column table setting out commencement information for various provisions in the Bill. Each provision of the Bill specified in column 1 of the table commences (or is taken to have commenced) in accordance with column 2 of the table and any other statement in column 2 has effect according to its terms.

The table has the effect of providing for the following commencement times:

Matters to commence on the day the Act receives the Royal Assent:

sections 1 to 3 and anything else in the Act not otherwise covered by the table.

Matters to commence on the day after the Act receives the Royal Assent:

Part 1 of Schedule 5; and
Schedule 9.

Matters to commence on 1 January 2015:

Schedule 10.

Matters to commence on 1 July 2015:

Schedule 7.

Matters to commence on 1 January 2016:

Schedules 1, 2 and 3;
Parts 2, 3 and 4 of Schedule 5;
Schedule 6; and
Schedule 8.

Matters to commence on 1 July 2016:

Schedule 4.

A note explains that the commencement times in the table will not be amended should the provisions of this Act be amended by any future Act.

Subclause 2(2) provides that column 3 of the table is for additional information which may be added to or edited in any published version of the Bill but that information is not part of the Bill.

Clause 3 - schedule(s)

Subclause 3(1) provides that any legislation that is specified in a schedule is amended or repealed as set out in the applicable Items in the schedule and that any other Item in a schedule has effect according to its terms.

Subclause 3(2) makes it clear that any instrument amended by the Bill (e.g. by savings or transitional clauses) does not prevent that instrument, as amended, from subsequently being amended or repealed by the Minister.

List of abbreviations

ARC Act Australian Research Council Act 2001

ANU Act Australian National University Act 1991

CPI Consumer Price Index

CSPs Commonwealth supported places

EFTSL Equivalent full-time student load for a year

ESOS Act Education Services for Overseas Students Act 2000

HDR Higher degree by research

HEGI Higher Education Grants Index

HELP Higher Education Loans Program

HESA Higher Education Support Act 2003

PSTSI Professional Scientific and Technical Services Index

RTS Research Training Scheme

TEQSA Tertiary Education Quality and Standards Agency

TEQSA Act Tertiary Education Quality and Standards Agency Act 2011

Schedule 1 Deregulation, expansion of demand driven system and other measures

Summary

From 1 January 2016, Schedule 1 removes provisions that provide for maximum student contribution amounts. The intent is to deregulate student contributions to facilitate the development of price competition in the higher education market and ensure the highest quality education in Australia so that Australia is not left behind in an era of increased global competition.

Commonwealth subsidies are being simplified from eight to five clusters with disciplines allocated to a particular cluster based on the standard teaching method and infrastructure required to deliver the course. The maximum student contributions amounts that higher education providers can charge students in Commonwealth supported places (CSPs) are also being removed.

Schedule 1 extends the demand driven funding system to diploma, advanced diploma and associate degree courses at all providers. It also extends the demand driven system to accredited bachelor and sub-bachelor courses at private universities and non-university higher education providers. The Commonwealth subsidy for places at nonâuniversity higher education providers will be discounted to recognise the unique responsibilities of universities, while still ensuring that providers receive sufficient funding to compete with universities.

Additionally, administrative arrangements to support the deregulation of student fees and the expansion of demand driven funding are outlined in this Schedule, including changes to the quality and accountability requirements and eligibility for Commonwealth subsidies to international providers.

It also merges the HECS-HELP and FEE-HELP schemes, including removal of the FEE-HELP loan fee and lifetime limits and the removal of the HECS-HELP upfront discount and the HELP voluntary repayment bonus.

Background

The demandâdriven system and the Commonwealth Grant Scheme

Under section 93â10 of HESA, the Government currently specifies the maximum student contribution that a higher education provider can charge a Commonwealth supported student for a unit of study in a particular funding cluster.

The Government subsidy amounts for CSPs paid to universities through the Commonwealth Grants Scheme are set out in the Act. These figures are indexed annually using the Higher Education Grants Index. The Government funds providers on the basis of eight funding clusters which are organised according to discipline.

The demand driven funding system is currently restricted to domestic students enrolled in an eligible bachelor-level course at a public university. There are seven non university higher education providers that receive a small allocation of subsidised student places each year (approximately 7,300 places in 2014). There is no provision for growth in the number of subsidised places that are allocated and students in non-subsidised places are required to pay full fees.

These restrictions limit the number of providers offering subsidised student places and limit educational opportunities for students. Allowing private universities and non university higher education providers to access demand driven bachelor places will ensure students are treated equitably in the provision of Commonwealth assistance regardless of where they decide to study.

Sub-bachelor courses are targeted at students who wish to enrol in shorter courses or who do not possess the prerequisite skills required for direct-entry to a bachelor degree. They can provide an effective mechanism for students to quickly train in areas linked to vocational outcomes and a pathway for lessâprepared students into higher education. In 2014, the Government is subsidising 19,243 sub-bachelor student places, including 9,793 enabling places.

While places in sub-bachelor courses were initially intended to be demand driven in accordance with a recommendation of the Bradley Review, they were later excluded. Since then, universities have received an annual allocation of subâbachelor places with little capacity for growth.

The Higher Education Loan Program (HELP)

Currently, eligible students can access HECS-HELP or FEE-HELP based on whether or not they are a Commonwealth supported student or a fee-paying student. Removing the differences in the treatment of students provides an opportunity to rationalise the HELP scheme and create a single loan scheme for higher education tuition costs that will be known as âHECS-HELPâ.

Students that access a FEE-HELP loan for an undergraduate course of study are subject to a 25 per cent loan fee. There is also a limit on how much a student can borrow on FEE-HELP. In 2014, the limit is $120,002 for medicine, dentistry and veterinary science students and $96,000 for all other students.

Detailed explanation

Part 1 â Main amendments

Higher Education Support Act 2003

Item 1

Section 3-10 of HESA provides that Chapter 3 provides for the following kinds of HELP assistance to students:

paragraph 3-10(a) - HECS-HELP (for student contribution amounts);
paragraph 3-10(b) - FEE-HELP (for tuition fees);
paragraph 3-10(c) - OS-HELP (for overseas study assistance); and
paragraph 3-10(d) - SA-HELP (for student services and amenities fees).

The terminology around the HELP scheme needs to be generally revised. The term used to describe the amount that a Commonwealth subsidised student will be charged (and incur as a HELP debt) will change from âstudent contributionâ to âtuition feeâ. As the maximum student contribution amount is to be removed, there would no longer be a need for separate HECS-HELP and FEE-HELP assistance.

This Item therefore repeals paragraphs 3-10(a) and (b) and replaces them with a new paragraph 3-10(a) for âHECS-HELP assistance for tuition feesâ. Paragraphs 3-10(c) and (d) would remain unaltered.

Item 2

Currently Division 5 (which consists of section 5-1) explains how the provisions of HESA apply to Table C providers (which are the overseas universities Carnegie Mellon University and University College London).

Overseas universities (i.e. Table C providers) would be made eligible to receive Commonwealth subsidies, Commonwealth scholarships and other grants funding in part through amendments to Division 5.

This Item repeals and substitutes Division 5 (to be called âApplication of Act to certain international providersâ) to consist of a new section 5-1 (also to be called âApplication of Act to certain international providersâ).

New subsection 5-1(1) provides that section 5-1 applies to an international provider â which is a higher education provider that has not been established under a Commonwealth or State or Territory law and does not have its central management and control in Australia.

A note explains that providers covered by subsection 16-5(1A) are international providers and that other international providers might also be approved. Item 6 repeals and substitutes subsection 16-5(1A). The substituted subsection 16-5(1A) provides that bodies corporate that were Table C providers immediately before the commencement of this Schedule are taken to be approved as higher education providers from the commencement of the Schedule.

New subsection 5-1(2) replicates current subsection 5-1(1), save for replacing the reference to a Table C provider with a reference to an international provider (and to update cross-referencing).

New subsection 5-1(3) provides that certain provisions of HESA, as listed in a table, apply in a modified way to international providers. If there is no such modified application, the provisions of HESA generally apply as normal to an international provider, its Australian branch and to students undertaking or proposing to undertake units of study at the Australian branch. The table replicates the table currently at subsection 5-1(3) except:

· to update Item numbering; and

· Item 4 refers to Part 3-2 HECS-HELP, instead of to Part 3-2 FEE-HELP).

New subsection 5-1(4) provides that Schedule 1A of HESA (VET FEE-HELP assistance) does not apply to an international provider, its Australian branch and to students of the international provider or Australian branch.

Item 3

This Item repeals and substitutes section 13-1, which provides a simplified outline of Part 2-1 (Higher education providers). The new simplified outline explains as follows:

Generally bodies corporate must be higher education providers before they can receive grants under Chapter 2 and before their students can receive Commonwealth assistance under Chapter 3.
Bodies corporate are higher education providers if approved by the Minister, or if they are automatically treated as being approved.
All providers must be registered higher education providers as defined in the TEQSA Act (under the TEQSA Act a âregulated entityâ may apply for registration â a regulated entity is a constitutional corporation, a corporation established under Commonwealth or Territory law, or a person conducting activities in a Territory).
A body corporateâs status as a higher education provider (including an automatic status) can be revoked â e.g. for breaching HESA quality and accountability requirements.

Item 4

This Item repeals the heading to Division 16 of Part 2-1 (âDivision 16 -What is a higher education provider?â) and replaces it with a new heading (âDivision 16 - Higher education providersâ).

Item 5

Section 16-1 explains the meaning of higher education provider.

This Item repeals and substitutes section 16-1 so that a higher education provider will mean one that is a registered higher education provider approved under Division 16 of HESA.

A note explains that a registered higher education provider has the same meaning as in the TEQSA Act. Under subsection 18(1) of the TEQSA Act, a regulated entity may apply to TEQSA for registration within a particular provider category. Section 5 of the TEQSA Act defines a regulated entity as meaning:

a constitutional corporation; or
a corporation established by or under a law of the Commonwealth or a Territory; or
a person who conducts activities in a Territory.

Item 6

Section 16-5 deals with when a body becomes a higher education provider.

This Item repeals and substitutes subsections 16-5(1A) and (2).

New subsection 16-5(1A) provides that those bodies corporate which were Table C providers immediately before the commencement of this Schedule are taken to be approved higher education providers from that time â unless they cease to be a provider by virtue of subsection 16-5(3).

New subsection 16-5(2) provides that bodies corporate that are not higher education providers within the meaning of HESA become a higher education provider if approved by the Minister under section 16-25.

Item 7

This Item repeals section 16-22 (Table C providers).

Items 8, 9 and 10

Subsection 16-25(1) provides that the Minister may approve bodies corporate as higher education providers if all of the following criteria are satisfied:

paragraph 16-25(1)(a) - the body is established under a law of the Commonwealth or a State or Territory, it carries on business in Australia and it has its central management and control in Australia; and
paragraph 16-25(1)(aa) â subject to a determination of the Minister under subsection 16-25(2), the bodyâs principal purpose is to provide education or conduct research, or both; and
paragraph 16-25(1)(b) â the body is an Australian university, a self-accrediting entity, or a non self-accrediting entity; and
paragraph 16-25(1)(c) â the body either fulfils the tuition assurance requirements, or exempted from doing so under section 16-31; and
paragraph 16-25(1)(da) â the body offers at least one course of study leading to a higher education award; and
paragraph 16-25(1)(db) â the course of study is an accredited course in relation to the body; and
paragraph 16-25(1)(e) - the body applies for approval under section 16-40; and
paragraph 16-25(1)(f) â the Minister is satisfied the body is willing and able to meet the quality and accountability requirements; and
paragraph 16-25(1)(fa) â the body complies with relevant requirements of the Higher Education Provider Guidelines; and
paragraph 16-25(1)(g) â the Minister is satisfied the body and its key decision-makers are fit and proper persons.

Duplicative reporting requirements between HESA and the TEQSA Act impose an unnecessary regulatory burden on providers.

Item 8 repeals paragraph 16-25(1)(a) and substitutes a new criterion, which properly reflects the provider registration role undertaken by TEQSA. Under new paragraph 16-25(1)(a), the Minister may approve a body as a higher education provider if it is (among other things) a registered higher education provider. This amendment makes section 16-27 redundant, which is repealed by Item 11.

Item 9 repeals the criteria in paragraphs 16-25(1)(b), (da) and (db), which are unnecessary given the new paragraph 16-25(1)(a) (requiring that a provider be registered by TEQSA).

Item 10 inserts a new subsection 16-25(2A) to provide that the Minister may, despite subsection 16-25(3), be satisfied a person is fit and proper if TEQSA advises the Minister that it is satisfied the person is a fit and proper person. Subsection 16-25(3) provides that the Minister, in determining whether a person is fit and proper, must take into account the matters the Minister has specified in an instrument the Minister must make under subsection 16-25(4) (under subsection 16-25(3) the Minister may have regard to other relevant matters as well).

Item 11

Section 16-27 provides that, despite section 16-25, the Minister must not approve a body corporate as a higher education provider unless the body is a registered higher education provider (a meaning given under the TEQSA Act). Given that new paragraph 16-25(1)(a) requires a higher education provider to be a registered higher education provider before the Minister can approve that provider as a higher education provider under HESA, this Item repeals section 16-27.

Item 12

Section 19-1 sets out what are the quality and accountability requirements. This includes the compact and academic freedom requirements of subdivision 19-G (paragraph 19-1(f)). This Item amends paragraph 19-1(f) omit âcompact and academic freedom requirementsâ and substitutes âacademic freedom requirementsâ (see Item 27 of this Schedule).

Item 13

Paragraph 16-25(1)(f) of HESA requires that the Minister is satisfied that an applicant for approval as a higher education provider is willing and able to meet the quality and accountability requirements. Subdivision 19-A deals with the general quality and accountability requirements.

This Item inserts a new section 19-2 into Subdivision 19-A to provide that the Minister may have regard to TEQSAâs advice or recommendations on matters relating to the quality and accountability requirements, including whether a provider is willing or able to meet, or does meet, those requirements. This will help to reduce the administrative burden on providers.

Item 14

Section 19-12 provides that, when determining if a provider is financially viable, the Minister must have regard to any financial statements given by a provider under section 19-10.

This Item amends the section so that the Minister may have regard to these financial statements â i.e. it would no longer be mandatory to do so. This would allow the Minister to rely upon TEQSAâs assessment of financial viability, meaning that the Department would not need to make additional assessments on behalf of the Minister. This will help to reduce the administrative burden on providers.

Item 15

Section 19-35 provides for a range of benefits and opportunities to be extended equally to all eligible students and for providers to have fair and transparent procedures governing them. Under subsection 19-35(4), providers receiving payments under section 110-1, that is amounts of FEE-HELP assistance, must have open, fair and transparent procedures about the selection of students to enrol and the treatment of students undertaking studies. Subsection 19-35(5) provides that subsection 19-35(4) does not prevent providers from taking into account education disadvantage.

This Item repeals subsections 19â35(4) and (5) as there will no longer be FEE-HELP assistance. The TEQSA Higher Education Standards Framework (Threshold Standards) 2011 (F2013C00169) requires all registered higher education providers to treat students equitably.

Items 16 and 17

Section 19-45 governs the student grievance and review procedures that a higher education provider must have.

Item 16 repeals and substitutes subsection 19-45(1)(c) largely in the same terms as the existing paragraph, with the omission of reference to section 36â20 of HESA (which is repealed by Item 51 of this Schedule). Item 17 makes the same change to subsection 19-45(4).

Item 18

Section 19-50 requires higher education providers to have review officers.

This Item repeals and substitutes section 19-50 to remove cross-references to section 36-20, which is being repealed by Item 51 of this Schedule.

Item 19

Section 19-60 requires a higher education provider to have procedures relating to personal information.

As with the amendments to be made to sections 19-45 and 19-50, this Item amends subsection 19-60(1) to remove the cross-reference to section 36-20.

Item 20

Section 19-70 requires a higher education provider to supply certain statistical or other information to the Minister if required to do so by notice. Under subsection 19-70(3), a notice must not require a provider to give information that is otherwise required to be given by virtue of section 19-95. As section 19-95 is being repealed by Item 22 of this Schedule, this Item repeals subsection 19-70(3).

Items 21 and 22

Subdivision 19F (sections 19-85 to 19-105) deals with the student contribution amounts and tuition fees that higher education providers are permitted to charge their students.

Currently, providers are required to set âfeesâ for each unit of study they propose to provide to a domestic student in a particular period. There are separate but similar requirements for setting student contribution amounts for Commonwealth supported students and tuition fees for feeâpaying students (sections 19-87 and 19-90). Providers are allowed to set more than one fee for a unit of study and, in doing so, are allowed to have regard to any matter they consider appropriate, unless the matter is specifically precluded from consideration by the Higher Education Provider Guidelines 2012 (section 19-87).

Subdivision 19F needs to be amended to remove unnecessary provisions that may inhibit flexibility concerning tuition fees. HESA will no longer need the concept of a student contribution amount, and higher education providers will be permitted to charge students tuition fees regardless of whether they are in a Commonwealth supported or fee-paying place.

Item 21 repeals and substitutes the heading to Subdivision 19F so that it would read âThe tuition fee requirementsâ.

Item 22 repeals sections 19-85 to 19-100, and substitutes new sections 19-85 and 19-100.

New section 19-85 provides the basic tuition fee requirements for a higher education provider, as follows:

a provider must charge any tuition fees it charges its students in relation to units of study and in accordance with HESA (subsection 19-85(1));
if a provider charges a domestic student a tuition fee for a unit of study, it must issue the student with an invoice specifying the tuition fee for the unit (subsection 19-85(2)); and
the invoice and how it is issued must comply with any requirements prescribed in the Administration Guidelines (subsection 19-85(3)).

Note also that providers would continue to be required to comply with relevant requirements of the TEQSA Higher Education Standards Framework (Threshold Standards) 2011,which mandate that students must be provided with information about charges, conditions and refunds.

Section 19-100 currently provides that a higher education provider must not charge a person a fee for a course of study in excess of the sum total of their tuition fees for all units of study they undertake with the provider as part of their course. New section 19-100 replicates the existing section 19-100, but replaces the reference to a person with a reference to a domestic student.

Items 23, 24 and 25

Section 19-102 provides for the meaning of a fee for the purposes of HESA. Subsection 19-102(3) explains what matters are not within the meaning of a fee, including the following:

Paragraph 19-102(3)(d) - fees imposed in accordance with the Higher Education Provider Guidelines for imposing fees in respect of overseas students.
- Item 23 repeals paragraph 19-102(3)(d), as it may restrict the capacity of the Minister to make guidelines relating to the charging of tuition fees for international students.
Paragraph 19-102(3)(g) â a student contribution amount payable in respect of a student.
- Item 25 repeals this redundant paragraph.

Item 24 makes a minor consequential renumbering amendment to paragraph 19-102(3)(f).

Item 26

Section 19-105 provides for the meaning of a tuition fee.

This Item repeals and substitutes that meaning. Under the substituted meaning, a fee that a higher education provider charges a student is a tuition fee for a unit of study to the extent that the fee is directly in respect of the provision of that unit. This is intended to clarify that tuition fees are only those fees that are directly related to the provision of a unit of study by a higher education provider, and that other charges that a provider might impose on a student are not tuition fees.

Item 27

This Item repeals and substitutes the heading to Subdivision 19-G so that it reads âThe academic freedom requirementsâ (instead of âThe compact and academic freedom requirementsâ).

Item 28

Section 19-110 requires that Table A providers and Table B providers must enter into mission based compacts with the Commonwealth in which providers must provide specific information (e.g. a statement of the providerâs mission and strategies for undertaking research) in order to receive a grant.

This Item repeals section 19-110 as it is unnecessary regulation.

Item 29

Section 22-10 deals with the revocation of a providerâs approval if its status or accreditation changes. This Item repeals:

subsection 22-10(1) (bodies that cease to be Australian universities);
subsection 22-10(3) (bodies that cease to be non-self accrediting entities); and
subsection 22-10(5) (bodies that no longer meet certain approval criteria).

These subsections are being repealed as they are redundant with the inclusion of a new paragraph 16â25(1)(a) requiring applicants for approval as higher education providers to be registered by TEQSA. If a higher education provider ceases to be registered, its approval as a higher education provider is automatically revoked under section 22-2.

Item 30

Both HESA and the TEQSA Act require higher education providers to demonstrate that they meet âfit and proper personâ requirements. Providers must demonstrate this at the time of TEQSA registration and HESA approval, and must also notify both the Department and TEQSA whenever there is a change of personnel in a significant decision making or ownership position. This duplicative reporting requirement imposes an unnecessary regulatory burden on providers.

Section 22-17 of HESA deals with the revocation of a providerâs approval if it or key decision-makers are not fit and proper persons.

This Item inserts a new subsection 22-17(1A), which enables the Minister to rely upon advice received from TEQSA that a person is not a fit and proper person.

Item 31

The note to section 27-1 explains that Part 2-2 (Commonwealth Grant Scheme) does not apply to Table C providers. As there are no longer Table C providers (replaced by the concept of international providers), and international providers can be eligible for grants under Part 2-2 of HESA, this Item repeals the note.

Item 32

Section 27-5 deals with the Commonwealth Grant Scheme Guidelines and the Tuition Fee Guidelines. There are currently no Tuition Fee Guidelines. Rather the provisions of this part will be dealt with in the Commonwealth Grant Scheme Guidelines.

This Item repeals and substitutes section 27-5, which removes reference to the Tuition Fee Guidelines.

Item 33

Section 30-1 deals with higher education providersâ eligibility for grants under Part 2-2 of HESA (Commonwealth Grant Scheme). This Item repeals and substitutes section 30-1 so as to support expanded eligibility for grants under this Part. Under the substituted section 30-1, a grant under this Part is payable if a provider has a funding agreement under section 30-25 with the Commonwealth that covers the year in question.

Items 34 and 35

Section 30-10 provides that the Minister may, before the start of a year, allocate a number of places to Table A providers in relation to designated courses, and to higher education providers that meet particular criteria. The allocation must specify the distribution of places between the funding clusters and the Minister must have regard for the providerâs preferred distribution of the places in deciding the distribution. Non-Table A providers can only be allocated places in areas of national priority.

Item 34 repeals and substitutes subsection 30-10(1) so that it provides that the Minister, before a year commences, may allocate a specified number of Commonwealth supported places to a higher education provider for designated courses of study for the year.

Subsection 30-10(4) currently provides that allocations of places for non- Table A providers must specify the allocation is only in respect of national priorities and the number of allocated places for each national priority. Item 35 repeals subsection 30-10(4).

Items 36 and 37

Subsection 30-12(1) specifies the courses of study that are considered to be designated courses of study in relation to Table A providers. Subsection 30-12(2) allows the Minister to specify additional courses of study that are designated.

Item 36 amends subsection 30-12(1) to remove the reference to Table A providers.

Item 37 inserts a new paragraph 30-12(1)(ba) to include enabling courses as designated courses of study.

Item 38

Section 30-15 sets out the eight funding clusters and section 30-20 provides that national priorities are outcomes that relate to the provision of higher education and are specified in the CGS Guidelines as a national priority.

This Item repeals sections 30-15 and 30-20. The term national prioritiesis redundant following the expansion of Commonwealth funding under Part 2-2 to all higher education providers. The five funding clusters are now set out in the new section 33-10 (see Item 45 of this Schedule).

Item 39

Section 30-25 sets out the requirements in regard to the three year funding agreements the Minister may enter into with higher education providers. Subsection 30-25(3) lists the matters that the agreements may specify.

This Item repeals paragraphs 30-25(3)(cb) and (e) to remove references to the funding agreements specifying transitional loading and places that attract it. Transitional loading ceased at the end of 2012.

Item 40

This Item adds two new paragraphs (h) and (i) to subsection 30-25(3) so that funding agreements may also specify:

requirements relating to participating in surveys of student satisfaction, employer satisfaction and graduate outcomes; and
requirements relating to the information that providers must make publicly available.

Item 41

Section 30-27 provides for a Table A providerâs funding agreement to specify a maximum basic grant amount (MBGA) for designated and non-designated places and for a non-Table A providerâs funding agreement to specify a maximum basic grant amount.

The MBGA for Table A providers for designated courses cannot be less than the amount worked out under 33-5(4) and for non-designated courses cannot be less than the amount specified in the providerâs funding agreement in the preceding year or, if no amount was specified, the amount worked out under 33-5(5)(a).

For non-Table A providers the MBGA must not be less than the amount worked out under 33-5(8).

This Item repeals and substitutes section 30-27. The effect of this is to:

remove the current paragraph 30-27(1)(b) and subsection 30-27(4);
replace references to Table A providers with higher education providers; and
ensure the use of correct cross-references.

Items 42 and 43

Section 33-1 provides that a grant payable to a higher education provider for a year is the basic grant amount worked out under subdivision 33-B plus any regional, medical, enabling and transitional loading and any performance funding payable to the provider for that year.

Item 43 repeals subparagraphs 33-1(1)(b)(iv) and (v), thereby removing references to transitional loading and performance funding. Item 42 makes a minor consequential change to subparagraph 33-1(1)(b)(iii) to add a full stop.

Item 44

Section 33-5 sets out how a basic grant amount is to be worked out for a provider for a year. There are separate provisions for non-Table A and Table A providers.

This Item repeals and substitutes section 33-5. The effect of this would be to:

remove subsections (7) and (8); and
replace references to Table A providers with higher education providers.

Item 45

Section 33-10 currently contains a table setting out the Commonwealth contribution amount for a place in eight funding clusters.

This Item repeals and substitutes section 33-10. A new table sets out Commonwealth contribution amounts for a place in five funding clusters.

The amount specified in the table for the cluster the place is in applies to a higher education provider registered under the TEQSA Act in a category that allows the provider to use the word âuniversityâ.

In all other instances, the Commonwealth contribution amount is 70 per cent of the amount specified in the table for the cluster the place is in (rounded down to the nearest dollar).

The table is as follows:

Commonwealth contribution amount
Item	Funding cluster	Commonwealth contribution amount
1	Law, Accounting, Administration, Economics, Commerce	$1,805
2	Humanities, Social Studies, Communications	$6,021
3	Computing, Built Environment, Education, Creative Arts, Behavioural Science, Welfare Studies, Other Health	$9,033
4	Engineering, Science, Surveying, Environmental Science, Allied Health, Nursing, Clinical Psychology, Foreign Languages	$12,045
5	Agriculture, Medicine, Dentistry, Veterinary Science	$18,067

A note explains that the Commonwealth contribution amounts in the table are indexed under Part 5-6.

Item 46

Section 36-5 provides for the meaning of a Commonwealth supported student.

For the purpose of simplifying this definition, this Item repeals and substitutes section 36-5, so that a person is a Commonwealth supported student in relation to a unit of study if:

· the personâs higher education provider (where he or she is enrolled in a unit) advises the person he or she is a Commonwealth supported student in relation to the unit, or in relation to a course of study the unit forms part of (paragraph 36-5(1)(a)); and

· the provider was not prohibited under section 36-10 from providing this advice (paragraph 36-5(1)(b)); and

· at the end of the census date for the unit, the person is not prevented from being a Commonwealth supported student by virtue of section 36-15 (paragraph 36-5(1)(c)).

Items 47 and 48

Section 36-10 sets out when a provider must not advise a person that they are Commonwealth supported. This provision allows units of study at winter and summer schools to be offered on a fee-paying basis.

Subsection 36-10(1) specifies the situations when a higher education provider must not advise a person that he or she is a Commonwealth supported student in relation to a unit of study. Under paragraph 36-10(1)(e), the provider must not do so unless the person is enrolled in the unit on or before the census date for the unit (subparagraph 36-10(1)(e)(i)) and, at the end of the census date, remained so enrolled (subparagraph 36-10(1)(e)(ii)).

Item 47 amends paragraph 36-10(1)(e) to remove reference to the second of these criteria â as providers cannot know this at the time they give advice to students.

Item 48 repeals subsections 36-10(3), (4), (5), (7), (8), (9) and (10). With the removal of the cap on studentsâ contributions most of these provisions are no longer required.

Subsection 36â10(3) provides that a student must not be advised that he or she is a Commonwealth supported student, if the person has informed the provider in writing on or before the census date for the unit that he or she does not wish to be Commonwealth supported. This is replaced by the new subsection 36-15 (1D).

Items 49 and 50

Section 36-15 sets out the circumstances when a person must not be advised that they are Commonwealth supported.

The heading to section 36-15 currently reads âPersons not to be advised they are Commonwealth supportedâ. Item 49 replaces this heading with âPersons prevented from being Commonwealth supportedâ.

Subsections 36-15(1A) and (1) set out when a higher education must not advise a person they are Commonwealth supported. Item 50 repeals these subsections and substitute new subsections 36-15(1), (1A), (1B), (1C) and (1D).

These new subsections provide that, despite any advice a person may have been given by his or her higher education provider, the person is not a Commonwealth supported student for a unit of study if:

· the person is not still enrolled in the unit at the end of the census date for the unit (subsection 36-15(1));

· the person has not, on or before the census date for the unit, completed and signed a request for Commonwealth assistance in relation to the unit (or course of study which the unit forms part of) and has given it to an appropriate officer of the provider (subsection (1A));

· the unit contributes to a course of study being undertaken primarily at an overseas campus (subsection (1B));

· the enrolment is in an employer reserved place, or the unit forms part of a bridging course for overseas trained professionals, or the unit forms part of course to which a determination under subsection 36-15(2) applies (subsection (1C)); or

· the person notifies an appropriate officer of the provider in writing, on or before the census date for the unit, that he or she does not want to be a Commonwealth supported student with respect to the unit.

Subsection 36-15(2) allows the Minister to determine, by legislative instrument, that a specified course of study is not one in respect of which students may be enrolled in units of study as Commonwealth supported students, or a course of study of a specified type is not one in respect of which students may be enrolled in units of study as Commonwealth supported students. Currently the Bachelor of Circus Arts at Swinburne University of Technology is the only course for which such a determination exists.

Item 51

This Item repeals the following sections:

36-20 (Providers to repay amounts â special circumstances);
36-21 (Special circumstances);
36-22 (Application period);
36-23 (Dealing with applications);
36-24A (Providers to repay amounts â provider ceases to provide course);
36-24B (Providers to repay amounts â no tax file numbers); and
36-24C (Secretary may act if provider is unable to).

These sections are to be repealed to facilitate the merger of the HECS-HELP and FEE-HELP schemes.

Item 52

This Item repeals the heading to Subdivision 36-C (Conditions relating to enrolment).

Items 53 to 57

Section 36-25 covers when a higher education provider must advise an enrolled student that he or she is a Commonwealth supported student in relation to a unit of study.

Item 53 repeals and substitutes paragraph 36-25(1)(b). Under the substituted paragraph 36-25(1)(b), a provider must provide the advice about the enrolled student being a Commonwealth supported student unless section 36-10 prohibits the provider from doing so.

Subsection 36-25(2) requires Table A âhost providersâ to advise students they are Commonwealth supported, if the students are Commonwealth supported at the âhome providerâ. Items 54 and 55 amend subsection 36-25(2) so that it applies to all higher education providers and not just Table A providers.

Item 56 repeals and substitutes paragraph 35-25(2)(c) so as to remove reference to a prohibition under section 36-15.

Item 57 amends subsection 35-25(3) by omitting reference to âsubparagraph 35-5(1)(a)(ii)â and substituting subparagraph 36-5(a)(ii)â. This reflects amendments made to section 36-5 by Item 46 of this Schedule.

Item 58

Section 36-30 requires Table A providers, unless prohibited under sections 36-10 or 36-15, to enrol an undergraduate student undertaking a unit of study as part of a course of study in a Commonwealth supported place. Table A providers do not have to comply with these requirements in relation to pre-2009 students that meet criteria set out in subsection 36-30(2). Section 36-40 deals with when higher education providers must cancel enrolments in certain circumstances.

This Item repeals sections 36-30 and 36-40 and substitutes sections new section 36-30.

New subsection 36-30(1) requires a provider to advise a person he or she is a Commonwealth supported student for a unit of study if:

· the person is to be enrolled at the provider in a unit of study;

· the unit is part of an undergraduate course of study; and

· section 36-10 does not prohibit the provider from advising the person that he or she a Commonwealth supported student for the unit.

The effect of this is to:

remove reference to Table A providers;
require providers who still have any students in fee-paying places at the undergraduate level to move those students into Commonwealth supported places (those students to whom subsection 36-30(2) currently applies); and
remove subsections 36-30(3), (4) and (5), which are no longer required.

There will be some limited circumstances where movement of students into Commonwealth supported places will not be practical because there continue to be limits of the number of medical undergraduate places that are Commonwealth supported. In a small number of cases, providers need to be able to offer both Commonwealth supported and non-supported places in a particular course, and therefore not be required to enrol all students in Commonwealth supported places. To provide capacity for that to occur, new subsection 36-30(2) will enable the Minister to determine, by legislative instrument, that subsection 36-30(1) does not apply to a particular course of study.

Item 59

This Item removes subdivision 36-D (conditions relating to student contributions amounts) as it is no longer needed (sections 36-45 and 36-50). When amended, HESA will not set limits for student contribution amounts so both sections 36-45 and 36-50 are no longer required.

Item 60

The purpose of section 36-55 is to ensure that Commonwealth supported students are not subsidising other domestic students. Subsection 36-55(2) provides that, for students who are enrolled in an employer reserved place, their tuition fee for the unit plus the employer contribution for the unit cannot be less than the highest amount the provider would charge a Commonwealth supported student for the unit or a higher amount that is specified in the Tuition Fee Guidelines. In addition, subsection 36-55(3) provides that students who are enrolled on a non-award basis cannot be charged less than a Commonwealth supported student.

This Item repeals and substitutes section 36-55. The new section 36-55 provides that:

for any tuition fees a higher education provider charges persons who are not Commonwealth supported students, this must be done in accordance with the prescribed requirements of the Commonwealth Grant Scheme Guidelines (subsection 36-55(1); and
a higher education provider must not charge a Commonwealth supported student a tuition fee for a unit that forms part of an enabling course undertaken by the student (subsection 36-55(2).

The Higher Education Provider Guidelines currently include complex provisions to prevent international students being charged less than Commonwealth supported students. It is planned to replace these with more transparent requirements in the Commonwealth Grant Scheme Guidelines, to be implemented before the new tuition fee arrangements commence.

Item 61

Part 2-3 of HESA concerns Other Grants. Section 41-1 explains what Part 2-3 is about and contains a note explaining that part 2-3 does not apply to Table C providers. This Item deletes the note thus removing reference to Table C, which is being removed from HESA as part of changes to extend eligibility to international providers.

Items 62, 63 and 64

Item 62 repeals and substitutes section 41-10, which deals with which bodies corporate are eligible for Part 2-3 grants.

New subsection 41-10(1) provides that, subject to new subsection 41-10(2) and (3), a body corporate is eligible for a Part 2-3 grants in respect of a year for any of the following purposes:

to promote equality of opportunity in higher education;
to promote the productivity of higher education providers;
to support national institutes specified in the Other Grants Guidelines;
to support the capital development projects of higher education providers;
to assist with the cost of higher education providersâ superannuation liabilities;
to support research by, and the research capability of, higher education providers;
to support the training of research students;
to foster collaboration in higher education;
to foster structural adjustment or reform in higher education; and
for activities that: assure and enhance the quality of Australiaâs higher education sector; or foster an understanding of the importance of, or promote research and scholarship in, science, social science or the humanities in Australia; or support open access to higher education across Australia.

This largely replicates the purposes currently specified in the table at subsection 41-10(1) â with the exception of the following which are no longer needed because they can be supported under the purposes listed above:

Item 9A â grants to support diversity and structural reform;
Item 10 â grants to support the development of systemic infrastructure used by higher education providers; and
Item 12 - grants to assist higher education providers with the transitional costs of changes to maximum student contributions.

New subsection 41-10(2) provides that the Other Grants Guidelines may prescribe matters that relate to eligibility to receive a grant for the purposes specified in subsection 41-10(1) and, if they do so, a body corporate can only receive a grant in accordance with these Guidelines.

New subsection 41-10(3) provides that a body corporate is ineligible for a Part 2-3 grant unless it complies with any extra eligibility criteria that may be provided for in the Other Grants Guidelines (which are a disallowable legislative instrument) for a particular purpose specified in subsection 41-10(1).

Items 63 and 64 are technical amendments that remove redundant references to the table in section 41-10 from subsections 41-15(1) and 41-50(1).

Item 65

Part 2-4 of HESA concerns existing Commonwealth scholarships. Section
46-1 explains what Part 2-4 is about and contains a note explaining that Part 2-4 does not apply to Table C providers. This Item deletes the note to remove the reference to Table C, which is being removed from HESA as part of changes to extend eligibility to international providers.

Item 66

Section 46-13 concerns the eligibility of students to receive directly-paid standard Commonwealth scholarships. Paragraph 46-13(c) provides that these scholarships are available to certain students of a Table A provider or a provider to which subparagraph 30-1(b)(i) applies (and the other requirements of section 46-13 are satisfied).

This Item amends paragraph 46-13(c) to provide that a student of a provider that has a funding agreement with the Commonwealth under section 30-25 satisfies the requirements.

Item 67

Section 46-15 concerns the eligibility of higher education providers to receive grants for certain existing Commonwealth scholarships.

This Item repeals and substitutes section 46-15. New subsection 46-15(1) provides that, subject to subsection 46-15(3), higher education providers that have a funding agreement with the Commonwealth under section 30-25 are eligible to receive Commonwealth grants to pay as benefits to their students for indirectly-paid standard Commonwealth scholarships.

New subsection 46-15(2) provides that, subject to subsection 46-15(3), Table A providers and higher education providers registered under the TEQSA Act in a category entitling them to use the word âuniversityâ, are entitled to receive Commonwealth grants to pay as benefits to their students for postgraduate research scholarships.

New subsection 46-15(3) provides that the Commonwealth Scholarship Guidelines may prescribe matters relating to eligibility for grants under subsections 46-15(1) and (2) and, if they do so, providers can only receive grants in accordance with the Guidelines.

New subsection 46-15(4) provides that a provider eligible for such grants is an eligible scholarship provider.

Item 68

Part 2-5 of HESA concerns the reduction and repayment of grants. Section 51-1 explains what Part 2-5 is about and contains a note explaining that Part 2-5 does not apply to Table C providers. This Item repeals the note.

Item 69

Section 65-1 explains what Chapter 3 (assistance to students) is about. This Item repeals and substitutes section 65-1, to explain that:

there are three types of Commonwealth assistance for students:
- HECS-HELP (for tuition fees costs);
- OS-HELP (for the cost of undertaking, as part of a course, overseas studies); and
- SA-HELP (for student service and amenities fees);
the Commonwealth pays this assistance to higher education providers; and
this assistance is in the form of a loan to students.

Item 70

Section 87-1 explains what Part 2-3 (HECS-HELP assistance) is about. This Item repeals and substitutes section 87-1 to explain that:

students may be entitled to HECS-HELP assistance for units of study as long as they meet certain requirements;
the amount of assistance is based upon applicable tuition fees for units of study, less any up-front payments made by students;
the assistance is paid to higher education providers or, if students access units though Open Universities Australia, to that body;
these payments discharge a studentâs liability to pay tuition fees to their provider or to Open Universities Australia; and
amounts of assistance may form part of a personâs HELP debts that the Commonwealth recovers under Part 4-2.

Items 71 and 72

Item 72 repeals note 2 to section 87-5 which refers to the redundant reference to section 93-10 (maximum student contribution amount for places). Item 71 makes a minor consequential amendment so that note 1 to section 87-5 simply reads âNoteâ.

Items 73, 74 and 75

The new HECS-HELP scheme is similar to the current FEE-HELP scheme, and so the current HECS-HELP provisions are repealed and the FEE-HELP provisions amended to refer to HECS-HELP.

Divisions 90 to 96 all concern the current HECS-HELP assistance scheme, which is being replaced by the new HECS-HELP scheme in Divisions 104 to 110. Item 73 removes these redundant Divisions.

Item 74 repeals the heading to Part 3-3 (FEE-HELP assistance), as the heading to Part 3-2 (HECS-HELP assistance) will replace it. There is no longer a Part 3-3.

Item 75 repeals Division 101 of Part 3-3 (Introduction), as the introduction to Part 3-2 (Division 87) replaces it.

Items 76 to 78, 80 to 82, 83 to 86, 88, 90, 92 to 94, 106, 107, 111 to 115, 118, 127, 128, 130 to 132, 134, 137, 138 and 140

Because of the replacement of FEE-HELP assistance with the new HECS-HELP assistance, provisions in HESA referring to FEE-HELP are amended to refer to HECS-HELP.

Items 76, 77, 82, 94, 107, 111, 131, 133 and 137 replace headings in HESA that refer to FEE-HELP with headings that refer to HECS-HELP.

Items 78, 80, 81, 83, 85, 86, 92, 93, 112, 113, 114, 115, 128, 134, 138 and 140 replace references in HESA to FEE-HELP with HECS-HELP.

Items 84, 88, 90, and 106 replace references in HESA to the FEE-HELP Guidelines with references to the HECS-HELP Guidelines.

Items 118, 127, 130 and 132 repeal redundant references to FEE-HELP assistance.

Item 87

This Item repeals the heading to section 104-4 (Failure by Open Universities Australia to set tuition fees and census date) and substitutes a new heading (Open Universities Australiaâs obligations in relation to tuition fees and census date).

Item 89

Section 104-4 concerns a failure by Open Universities Australia to set tuition fees and census date. This Item repeals subsections 104-4(2), (2AA) and (2A) and substitutes new subsections 104-4(2), (2A) and (2B) to provide respectively as follows:

Open Universities Australia must charge any tuition fees it charges students in relation to units of study and in accordance with HESA;
if Open Universities Australia charges a student a tuition fee for a unit of study, it must issue an invoice to the student specifying the fee; and
the invoice and how it is issued must comply with any requirements prescribed by the HECS-HELP Guidelines.

Item 91

Subsection 104-4(6) provides that, unless Open Universities Australia determines a fee for a unit and a census date, its students are not entitled to FEE-HELP assistance for the unit. This Item repeals and substitutes subsection 104-4(6) to remove reference to the fee for a unit requirement and to replace the reference to FEE-HELP assistance with reference to HECS-HELP assistance.

Item 95

There is no HECS-HELP limit, and hence no HECS-HELP balance. This Item repeals sections 104-15 to 104-27 and substitutes a new section 104-25.

The repealed sections which are no longer required are as follows:

section 104-15 (A personâs FEE-HELP balance);
section 104-20 (The FEE-HELP limit);
section 104-25 (Main case of re-crediting a personâs FEE-HELP balance); and
section 104-27 (Re-crediting a personâs FEE-HELP balance â no tax file number).

Section 104-25 currently covers the âmain caseâ for re-crediting a personâs FEE-HELP balance. The new section 104-25 has been re-cast so that it applies, instead, to provider repayment of HECS-HELP assistance. The purpose of this section is to enable the remission of a studentâs HECS-HELP assistance for a unit (in effect, to remit their HECS-HELP debt for that unit) in special circumstances.

Under subsection 104-25(1), a higher education provider must, on the Secretaryâs behalf, determine subsection 105-25(1) applies to a person if the following apply:

the person has been enrolled with the provider in a unit of study (other than through Open Universities Australia);
the person received HECS-HELP assistance for the unit;
the person failed to complete the requirements of the unit undertaken, or to be undertaken;
the provider is satisfied that special circumstances apply (see section 104-30);
the person applies in writing to the provider for the remission of his or her HECS-HELP debt for the unit; and
the application is made before the end of the section 104-35 application period or, on a request made no later than 2 years after the end of that period, the period is waived by the provider on the ground that it would not have been possible to make the application within time.

There is currently no limit on the period of time higher education providers can determine that this section applies. This results in adjustments being made for many years and this has become administratively impractical. The subparagraph requiring that the application must be made before the end of the application period, or waived according to a request made no later than two years after the end of that period, means that the Department will cease reconciling advances made to providers under the HELP scheme after three years. This will reduce the need to collect data more than four years in arrears and will reduce administrative requirements.

A note to subsection 104-25(1) explains that if the subsection applies the personâs HECS-HELP debt is remitted (see subsection 137-10(4)) and the provider must then repay the amount in question to the Commonwealth (see section 110-5).

Subsection 104-25(2) provides that Open Universities Australia must, on the Secretaryâs behalf, determine subsection 104-25(2) applies to a person if the following apply:

Open Universities Australia provides access to a unit of study;
the person failed to complete the requirements of the unit undertaken, or to be undertaken;
the person received HECS-HELP assistance for the unit;
the person failed to complete the requirements of the unit undertaken, or to be undertaken;
Open Universities Australia is satisfied that special circumstances apply (see section 104-30);
the person applies in writing to Open Universities Australia for the remission of his or her HECS-HELP debt for the unit; and
the application is made before the end of the section 104-35 application period or, on a request made no later than 2 years after the end of that period, the period is waived by Open Universities Australia on the ground that it would not have been possible to make the application within time (this will avoid the need to reconcile advances made to Open Universities Australia under HELP after three years and to collect data more than four years in arrears, which will reduce administrative requirements).

A note to subsection 104-25(2) explains that if the subsection applies the personâs HECS-HELP debt is remitted (see subsection 137-10(4)) and Open Universities Australia must then repay the amount in question to the Commonwealth (see section 110-5).

Subsection 104-25(3) allows the Secretary to act for the purposes of subsections 104-25(1) and (2) or sections 104-30, 104-35 or 104-40 if the provider or Open Universities Australia is unable to do so (as if the references to the provider or Open Universities Australia were references to the Secretary).

Subsection 104-25(4) provides that any written determination under section 104-25 is not a legislative instrument. This provision assists readers, as such a determination would not be a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003.

Items 96 to 98

Section 104-30 concerns special circumstances for the purposes of section 104â25.

Item 97 repeals and substitutes subsection 104-30(2). The new subsection 104-30(2) provides that the Administration Guidelines may specify when a higher education provider can be satisfied of matters relating to paragraphs 104-30(1)(a), (b) or (c) and that decisions of providers under section 104-30 must be made in accordance with any such requirements of the Administration Guidelines. The new subsection 104-30(2) removes reference to section 36-21 which is repealed by Item 51 of this Schedule.

Items 96 and 98 make minor consequential amendments to subsections 104-30(1) and (3) to replace references to âparagraph 104-25(1)(c)â with references to âparagraph 104-25(1)(e)â.

Items 99 and 100

Section 104-35 concerns the application period for applications under section 104-25.

These Items make minor cross-referencing amendments as follows:

paragraph 104-35(1)(a) â omit â104-25(1)(d) for the re-crediting of the personâs FEE-HELP balanceâ and substitute âparagraph 105-25(1)(f)â; and
paragraph 104-35(1A)(a) - omit â104-25(2)(d) for the re-crediting of the personâs FEE-HELP balanceâ and substitute âparagraph 105-25(2)(e)â.

Items 101 to 104

Section 104-40 concerns dealing with applications (for repayment by providers of HECS-HELP assistance in special circumstances).

Under paragraph 104-40(1)(b), a higher education provider can waive a requirement that an application be made before the end of the relevant application period. Item 102 amends paragraph 104-40(1)(b) to add in a time limitation, whereby the person needs to make a request for waiver no later than two years after the end of the application period. Item 104 makes the same time limitation into subsection 104-40(1A)(b) which relates to application made to Open Universities Australia.

Items 101 and 103 make minor cross-referencing amendments as follows:

paragraph 104-40(1)(a) â omit â104-25(1)(d)â and substitute â104-25(1)(f)â; and
paragraph 104-40(1A)(a) - omit â104-25(2)(d)â and substitute â104-25(2)(e)â.

Item 105

Section 104-42 covers re-crediting a personâs FEE-HELP balance if the provider ceases to provide the course. This Item re-casts section 104-42 so that it applies, instead, to provider repayment of HECS-HELP assistance where the provider ceases to provide the course.

This Item repeals and substitutes a new section 104-42 (repayment of HECS-HELP assistance â provider ceases to provide course). The new section 104-42 operates as follows.

Under subsection 104-42(1), a higher education provider must, on the Secretaryâs behalf, determine subsection 104-42(1) applies to a person if the following apply:

the person has been enrolled with the provider in a unit of study;
the person received HECS-HELP assistance for the unit;
the person failed to complete the requirements of the unit undertaken, or to be undertaken because the provider ceased to provide the course;
the tuition assurance requirements applied to the provider at this time; and
the person chose the tuition fee repayment option under the tuition assurance requirements.

A note to subsection 104-42(1) explains that, if the subsection applies, the personâs HECS-HELP debt is remitted (see subsection 137-10(4)) and the provider must then repay the amount in question to the Commonwealth (see section 110-5).

Subsection 104-42(2) provides that, if the provider is unable to make the determination for the purposes of subsection 104-42(1), the Secretary may do so.

Subsection 104-42(3) provides that any written determination under section 104-42 is not a legislative instrument. This provision assists readers, as such a determination would not be a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003.

Item 108

Section 107-1 concerns the amount of FEE-HELP assistance for a unit of study. This Item repeals and substitutes the section (including the note) to replace references to FEE-HELP with references to HECS-HELP. The note refers to section 107-1 which explains that a lesser amount may be payable because of section 107-10. As section 107-10 is to be repealed, the note is no longer needed.

Item 109

This Item repeals and substitutes subsection 107-5(1) which concerns the definition of up-front payment. Under new subsection 107-5(1) up-front payment means, in relation to a unit of study, a payment of all or part of a studentâs tuition fee for a unit, apart from a payment of HECS-HELP assistance under Part 3-2.

Item 110

This Item repeals section 107-10 (Amounts of FEE-HELP assistance and VET FEE-HELP assistance must not exceed the FEE-HELP balance) as the FEE-HELP balance will no longer apply.

Item 111

This Item repeals the heading to Division 110 (How are amounts of FEEâHELP assistance paid?) and replaces it with a heading suitable to HECSâHELP (How are amounts of HECSâHELP assistance paid?)

Item 116

This Item repeals section 110-5 (Effect of FEE-HELP balance being re-credited) and substitutes a new section 110-5 (Repayment of HECS-HELP assistance by providers).

New subsection 110-5(1) provides that if, in relation to a unit of study with a higher education provider, any of the following applies to a person:

special circumstances (subsection 104-25(1));
the course ceases (subsection 104-42(1)); or
no tax file number (subsection 193-10(1)

then the provider must pay to the Commonwealth the HECS-HELP assistance the person received for the unit. A note explains that the personâs HECS-HELP debt for the unit will also be remitted (subsection 137-10(4)).

New subsection 110-5(2) provides that subsection 110-5(1) does not apply to a provider because of the application of subsection 104-25(1) where the person enrolled in a unit as a replacement unit within the meaning of the tuition assurance requirements.

New subsection 110-5(3) provides that the Higher Education Provider Guidelines may, in relation to tuition assurance requirements, specify the following with respect to how subsection 110-5(2) applies:

· the amount to be paid to the Commonwealth (if any); and

· the person who is to pay the amount (if any).

New subsection 110-5(4) provides that Open Universities Australia must pay to the Commonwealth the amount of HECS-HELP assistance a person received for a unit of study accessed through Open Universities Australia if either of the following apply to the person:

special circumstances (subsection 104-25(1)); or
no tax file number (subsection 193-10(1).

Item 117

Section 129-1 explains what Chapter 4 (Repayment of loans) is about, including that accumulated debts can be repaid by voluntary repayments (which may attract a repayment bonus), or compulsory payments through the tax system. This Item amends the explanation to remove the reference to a repayment bonus.

Item 119

Section 137-1 defines what HELP debts are. This Item removes FEE-HELP debts from that definition.

Item 120

Section 137-5 concerns HECS-HELP debts. This Item repeals the section as it is redundant.

Section 137-10 concerns FEE-HELP debts. This Item also repeals and substitutes section 137-10. The new section 137-10 replicates the effect of the existing section 137-10, with references to FEE-HELP being replaced by references to HECS-HELP and references to other provisions of HESA updated.

Items 121 to 126

Item 126 repeals section 151â5. The effect of this provision is to remove the voluntary repayment bonus of 5 per cent for HELP debtors who make a voluntary payment towards their accumulated HELP debt.

Items 121 to 124 update the example set out in subsection 140-5(1) of HESA to ensure it is relevant and current.

Item 125 removes reference to a 5% bonus from the section 148-1 explanation about Part 4-2.

Item 129

This Item repeals section 169-15 (Charging student contribution amounts and tuition fees) and 169-20 (Exempt students) as they are no longer required.

Items 133 and 135

Section 193-1 concerns the information that higher education providers and Open Universities Australia must give to their students about tax file number requirements.

Item 133 repeals and substitutes the heading to subsection 193-1(2A) so that it reads âRequests for HECS-HELP assistance â requirements on Open Universities Australiaâ.

Item 135 repeals and substitutes subsection 193-1(5). Under the new subsection 193-1(5), the section 193-1 obligation on providers to notify their students about tax file number requirements does not apply if:

the person requests Commonwealth assistance in their application for HECS-HELP assistance, O-S HELP assistance or SA-HELP assistance, but is not entitled to it; or
where the person, in his or her request for Commonwealth assistance, requests HECS-HELP assistance and has made up-front payments totalling 100% of the personâs tuition fee for the unit.

Item 136

Section 193-5 concerns there being no entitlement to HECS-HELP assistance for students without tax file numbers.

This Item repeals section 193-5.

Items 139 and 141

Section 193-10 concerns there being no entitlement to FEE-HELP assistance for students without a tax file number.

Item 139 repeals and substitutes the note to subsection 193-10(1). The new note explains that, if subsection 193-10(1) applies, a personâs HECS-HELP debt is remitted and Open Universities Australia must repay the HECS-HELP assistance amount to the Commonwealth.

Item 141 repeals and substitutes the note to subsection 193-10(2). The new note explains that, if subsection 193-10(1) applies, a personâs HECS-HELP debt is remitted and the provider must repay the HECS-HELP assistance amount to the Commonwealth.

Item 142

The table in section 198-5 sets out the amounts under HESA that are to be indexed.

This Item removes maximum student contribution amounts (section 93-10) and the FEE-HELP limit (section 104-20) from the list.

Item 143 and 144

The table in section 206-1 sets out those decisions under HESA that are subject to review.

Item 143 removes Item 1A from this table. Item 1A concerns a decision that section 36-20 does not apply to a person. This section is to be repealed by Item 58 of this Schedule. Item 144 deletes reference to â1Aâ in note 1 to section 206-1.

Item 136 also repeals and substitutes Items 2 and 2A of the table. The effect of this is to replicate the existing Items 2 and 2A but, instead of them referring to re-crediting a personâs FEE-HELP balance, they refer to decisions under section 104-25 (with respect to higher education providers) or section 104-25 (with respect to Open Universities Australia).

Item 95 of this Schedule re-casts section 104-25 so that, instead of applying to re-crediting FEE-HELP balance, it will, instead, apply to reversal of HECS-HELP assistance.

Item 145

Note 1 to section 209-1 explains that the Secretary may delegate to a review officer of a provider the power to reconsider reviewable decisions made under section 36-20 or Chapter 3. This Item removes reference to section 36-20 from the note as the section is to be repealed by Item 51 of this Schedule.

Item 146

Subsection 238-1(2) provides that the Secretary may delegate to a review officer of a provider the Secretaryâs powers under Division 209 to reconsider reviewable decisions made under section 36-20 or Chapter 3, or relating to Chapter 3. This Item repeals and substitutes subsection 238-1(2) to remove reference to section 36-20 as the section is to be repealed by Item 51 of this Schedule.

Items 147 to 150

The table in section 238-10 sets out the matters for which the Minister may make Guidelines.

Item 147 removes the reference in table item 1 (Administration Guidelines) to section 36-21 (as the section is to be repealed by Item 51 of this Schedule) and substitutes section 104-30.

Item 148 removes the reference to section 93-10 in table item 2 (Commonwealth Grant Scheme Guidelines) as the section is to be repealed by Item 73 of this Schedule.

Item 149 deletes table items 4 (FEE-HELP Benefit Guidelines) and 11 (Tuition Fee Guidelines).

Subsection 238-10(1A) provides that the Minister may make the Guidelines for Overseas Higher Education Providers specifying additional requirements or conditions applicable to Table C providers. Item 150 replaces the reference to Table C providers with reference to international providers.

Items 143 to 163

Schedule 1 of HESA sets out the meaning of various defined terms for the purposes of the Act. Items 143 to 163 repeal or amend defined terms as a consequence of the amendments in Schedule 1 to the Bill.

Item 151 inserts a definition of academic freedom requirements (which are the requirements in Subdivision 19-G).

In the definition of Australian branch, Items 152 and 153:
- replace the reference to a Table C provider in paragraph(a) with a reference to an international provider; and
- replace the reference to a body corporate listed in Table C in section 16-23 with a reference to international provider.

Item 154 repeals and substitutes the definition of Commonwealth contribution amount. The new definition has the meaning given by section 33-10 (see Item 41 of this Schedule).

Item 155 repeals the definition of compact and academic freedom requirements.

Item 156 amends the definition of eligible scholarship provider to replace the reference to âsubsection 46-15(3)â with a reference to âsubsection 46-15(4)â.

Item 157 repeals the definition of exempt student.

Item 158 repeals the definition of FEE-HELP assistance.

Item 159 repeals the definition of FEE-HELP balance.

Item 160 repeals the definition of FEE-HELP debt.

Item 161 repeals the definition of FEE-HELP limit.

Item 162 inserts a definition of funding cluster (a group of disciplines set out together in an item of the table in section 33-10 under the heading of âFunding clusterâ).

Item 163 repeals the definition of funding clusters.

Item 164 replaces the reference to section 137-5 with a reference to section 137-10 in the definition of HECS-HELP debt.

Item 165 repeals the definition of HECS-HELP discount.

Item 166 inserts a definition of international provider (which would have the meaning given by subsection 5-1(1)).

Item 167 repeals the definition of maximum student contribution amount for a place.

Item 168 repeals the definition of national priority.

Item 169 repeals paragraph (a) of the definition of request for Commonwealth assistance and substitute a new paragraph (a) which removes reference to subsection 36-40(3) and inserts reference to a document, in the form approved by the Minister, in which the person requests the Commonwealth to provide assistance under this Act in relation to the unit or, where the unit forms part of a course of study undertaken with the provider, in relation to the course of study.

Item 170 repeals the definition of student contribution amount.

Item 171 repeals the definition of student contribution amount for a place.

Item 172 repeals the definition of Table C provider.

Item 173 repeals and substitutes paragraph (b) of the definition of tuition fee â so that a tuition fee in relation to a unit of study provided by Open Universities Australia means a fee imposed for the unit that is imposed directly in respect of the provision of the unit.

Item 174 removes reference to section 93-15 in the definition of up-front payment.

Tertiary Education Quality and Standards Agency Act 2011

Item 175

Subsection 158(1) of the TEQSA Act provides that TEQSA may, by legislative instrument, determine fees it charges for performing its functions. Subsection 158(3) provides that the determination can also include other listed matters relating to the payment of fees.

This Item adds another matter to the list in subsection 158(3) â the circumstances when fees may be refunded.

Item 176

Section 192 of the TEQSA Act provides that, for the purpose of administering higher education laws, TEQSA may disclose higher education information to the Minister, the Ministerâs staff and the Secretary.

This Item repeals and substitutes section 192. The new section 192 (including a note) largely replicates the existing section 192, save that it will now enable TEQSA to disclose personal information (within the meaning of the Privacy Act 1988) to the Minister, the Ministerâs staff or the Secretary for the purposes of administering a law relating to higher education.

This change is necessary so that TEQSA can provide personal information for the purposes of âfit and proper personâ requirements to the Secretary (and the Minister, or the Ministerâs staff when appropriate). This information is an attachment to many of TEQSAâs application forms and similar information is also provided to TEQSA in ânotifications of material changeâ. All of the relevant declarations concerning this information require the signature of the person providing the information. In addition, TEQSAâs application forms and guidelines include a privacy notice informing individuals that TEQSA is obliged to protect personal information in accordance with the Privacy Act (as indeed are the Minister, the Ministerâs staff and the Secretary) and that personal information is collected in order to check an applicantâs suitability to be a higher education provider and to assess compliance with relevant legislation that TEQSA enforces. In addition, the privacy notices explain that TEQSA usually discloses personal information it collects for these purposes to Commonwealth agencies responsible for the regulation of education.

Part 2 â Application, saving and transitional provisions

Division 1 â Introduction

Item 177

This Item is a Definitions provision and provides that in this Part:

commencement day means the day this Schedule commences; and
preserved funding student has the meaning given by Item 178.

Division 2 â Preserving certain funding arrangements

Arrangements to cap tuition fees and associated funding for existing students â Items 178 to 180

Item 178

Certain studentsâ funding arrangements are preserved in the manner set out in this Item. Subitem (1) provides that if, at a time before 1 January 2021, subitem (2),(3) or (4) applies in relation to a person, that person is a preserved funding student for the purposes of this Part. It further clarifies that no person can be a preserved funding student on or after 1 January 2021.

Subitem (2) sets out when that subitem applies. It provides that Subitem (2) applies in relation to a person at a time if:

the person was enrolled as a Commonwealth support student in a unit that forms part of a course of study with a higher education provider on 13 May 2014; and
the person has been either enrolled as a Commonwealth supported student in a unit that forms part of a course of study with a higher education provider or was on an approved break at all times since 13 May 2014.

Subitem (3) sets out when that subitem applies. It provides that subitem (3) applies in relation to a person at a time if:

the person accepted an offer from a higher education provider, of a place as a Commonwealth supported student in a course of study, on or before 13 May 2014; and
the provider had approved the personâs deferral of enrolment in the course as at 13 May 2014; and
the person has been either enrolled as a Commonwealth supported student in a unit that forms part of a course of study with a higher education provider, or on an approved break at all times since 13 May 2014.

Subitem (4) sets out when that subitem applies. It provides that subitem (4) applies in relation to a person if:

as at 13 May 2014 the person had accepted an offer from a higher education provider, of a place as a Commonwealth supported student in a course of study, and the period for enrolment in the course of study had not ended; and
before the end of the enrolment period, the person enrolled as a Commonwealth supported student in one or more units that formed part of the course of study; and
at all times since enrolling, the person has been either enrolled as a Commonwealth supported student in a unit that forms part of a course of study with a higher education provider or on an approved break.

Subitem (5) sets out when a person is on an approved break. It provides that a person is on an approved break at a time for the purpose of this Item if any of the following applies at the time:

a higher education provider has formally approved the personâs deferring the commencement of, or taking leave from, a course of study and the approval is in effect;
the only reason the person is not currently enrolled in a unit of study with a higher education provider is that the time is not during the providerâs standard academic periods;
the person completed a course of study with a higher education provider less than 12 months ago and intends to begin another course of study that has not yet commenced; or
the person meets the requirements that are set out in the Administration Guidelines made under HESA.

Item 179

This Item sets out the transitional provisions that would cap fees for a preserved funding student. The practical effect of this provision is that, following commencement of Schedule 1, higher education providers must not charge tuition fees to preserved funding students that exceed the amount that they would have been able to charge those students had the amendments made by Schedule 1 not been made. Note that the maximum tuition fees chargeable to preserved funding students will be indexed by CPI rather than HEGI.

Subitem (1) provides that, if a preserved funding student is enrolled with a higher education provider in a unit of study as a Commonwealth supported student, the provider must not charge, as the personâs tuition fee for the unit, an amount that is greater than the amount worked out by multiplying the maximum student contribution amount for a place by the EFTSL value of the unit.

Subitem (2) sets out the meaning of maximum student contribution amount for a place. It provides that the maximum student contribution amount for a place in a unit of study is the amount that would have been the maximum student contribution amount for a place in that unit under section 93-10 of HESA if:

section 93-10 of HESA, and the funding clusters mentioned in the table in that section, as in force immediately before the commencement day were still in force; and
the amounts set out at Column 2 of the table in that section had been indexed and replaced on each 1 January on and after 1 January 2016 in accordance with Part 5-6 of HESA as in force on the relevant 1 January.

Subitem (3) provides that with the exception of what is set out in subitem (2), an expression that is used in HESA has the same meaning in this Item as in HESA. It further clarifies that this subitem does not affect the operation of section 11B of the Acts Interpretation Act 1901 in relation to other Items of this Schedule.

Item 180

Where places in a funding cluster are provided to preserved funding students, the funding that is provided to higher education providers under Part 2-2 of HESA is also preserved, to the extent and in the manner provided in this Item. The practical effect of this provision is to ensure that the basic grant amount under Part 2-2 for a higher education provider is worked out having regard to the Commonwealth contribution amounts for each of the providerâs preserved funding students that would have applied had the amendments made by Schedule 1 not been made. Note that the Commonwealth contribution amounts in relation to preserved students will be indexed by CPI instead of HEGI.

Subitem (1) provides that when working out the basic grant amount for a higher education provider for a year under Division 33 of HESA, the Commonwealth contribution amount set out in subitem (2) is to be used in relation to places in a funding cluster that are provided to preserved funding students.

Subitem (2) sets out the Commonwealth contribution amount for a place in a funding cluster that is provided to preserved funding students. The Commonwealth contribution amount for a place in a funding cluster is the amount that, under subitem (3), is taken to be specified in the table that is set out in this subitem (2). Subitem (2) then sets out the table for the purpose of the subitem.

Subitem (3) provides that on 1 January 2016 and each subsequent 1 January, an amount specified in the table is to be indexed under Part 5-6 of HESA as if it were an amount referred to in the table in section 198-5 of HESA. The subitem further provides that the indexed amount (or if the amount is not indexed because the indexation factor is 1 or less, the unindexed amount) is taken to be the amount specified in the table on and from that 1 January.

Section 33-35 of HESA provides for the Commonwealth Grant Scheme Guidelines to specify certain requirements in relation to funding clusters in which units of study are included. Subitem (4) provides that the Commonwealth Grant Scheme Guidelines made for the purposes of section 33-35 of HESA and in force immediately before the commencement day continue to have effect for the purpose of subitem (1).

Subitem (5) provides that with the exception of what is set out in subitem (2), an expression that is used in HESA has the same meaning in this Item as in HESA. It further clarifies that this subitem does not affect the operation of section 11B of the Acts Interpretation Act 1901 in relation to other Items of this Schedule.

Division 3 - Other application, saving and transitional provisions

Item 181

Subitem (1) provides that the amendments made by this Schedule to Subdivision 19-F of Division 19 of HESA; and amendments made by Item 89, apply in relation to units of study that have a census date on or after the commencement day.

Subitem (2) provides that section 19-100 of HESA, as amended by this Schedule, applies on and after the commencement day in relation to a course of study that a student was undertaking, but had not completed, immediately before that day, as if the reference to the sum of the studentâs tuition fees for units of study undertaken by the student included a reference to the studentâs student contribution amount (if any) for units of study that had a census date before the commencement day.

Item 182

Section 16-30 of HESA provides that the tuition assurance requirements are that the body corporate complies with the requirements for tuition assurance set out in the Higher Education Provider Guidelines. In this context HESA refers to a person choosing the option designated under the tuition assurance requirements as student contribution/tuition fee repayment in relation to a unit of study (see for example paragraphs 36-24A(1)(e) and 104-24A(1)(d) of HESA).

This Item is a savings provision and provides that a reference in HESA to a person choosing the option designated under the tuition assurance requirements as tuition fee repayment in relation to a unit of study includes a reference to the option designated under those requirements as student contribution/tuition fee repayment.

Item 183

This Item provides that the amendments of Divisions 30, 33, 41 and 46 of HESA made by this Schedule apply in relation to years commencing on and after the commencement day.

Item 184

This item provides that a Commonwealth contribution amount referred to in section 33-10 of HESA, as amended by this Schedule is not to be indexed on 1 January 2016.

Item 185

Subitem (1) provides that the Minister may, before the commencement day, allocate places under section 30-10 of HESA for the year beginning on the commencement day, in accordance with that section as it will be in force on that day.

Subitem (2) provides that amendments of Division 36 of HESA made by this Schedule apply in relation to units of study that have a census date on or after the commencement day.

Item 186

Subitem (1) provides that this Item applies to a body corporate if, immediately before the commencement day, the body corporate was specified in the Other Grants Guidelines for the purposes of an item of the table in subsection 41-10(1) of HESA.

Subitem (2) provides that despite the repeal of the table, the body corporate continues to be eligible for a grant under subsection 41-10(1) of HESA as amended by this Schedule for an equivalent purpose, until the Minister amends the Other Grants Guidelines in a way that prevents the body corporate from being eligible for a grant for the purpose.

Item 187

Subitem (1) provides that this Item applies to a body corporate if, immediately before the commencement day, the body corporate was not eligible for a grant for a purpose specified in an item of the table in subsection 41-10(1) of HESA.

Subitem (2) provides that despite the amendments of that section made by this Schedule, the body corporate continues not to be eligible for a grant under that section for an equivalent purpose, until the Minister amends the Other Grants Guidelines in a way that allows the body corporate to be eligible for grant for the purpose.

Item 188

Subitem (1) provides that this Item applies to a higher education provider if, immediately before the commencement day, the provider was not eligible to receive a grant of a kind referred to in section 46-15 of HESA.

Subitem (2) provides that despite the amendments of that section made by this Schedule, the provider continues not to be eligible to receive such a grant, until the Minister amends the Commonwealth Scholarship Guidelines in a way that allows the provider to be eligible for such a grant.

Item 189

Subitem (1) provides that the following amendments made by this Schedule apply in relation to assistance for units of study that have a census date on or after the commencement day:

the repeal of Divisions 90 to 96 of HESA;
the amendments of Division 104;
the amendments of Division 107;
the amendments of Division 110; and
the amendments of Division 137.

Subitem (2) provides that a HELP debt incurred and not discharged before the commencement day continues to be a HELP debt for the purposes of the operation of Part 4-1 of HESA on and after that day .

Item 190

Subitem (1) provides that HESA applies on and after the commencement day as if a reference in a provision of HESA specified in subitem (2) to HECS-HELP assistance included a reference to:

HECS-HELP assistance under Part 3-2 of HESA as in force before the commencement day; and
FEE-HELP assistance under Part 3-3 of the Act as in force before the commencement day.

Subitem (2) provides that for the purpose of subitem(1), the provisions are the following:

section 104-25;
section 104-42;
section 110-5;
section 154-55; and
section 193-10.

Subitem (3) provides that HESA applies on and after the commencement day as if a reference in subsection 137-10(4) of HESA to HECS-HELP debt in relation to a unit of study included a reference to:

a HECS-HELP debt incurred before the commencement day; and
a FEE-HELP debt incurred before the commencement day.

Subitem (4) provides that if, immediately before the commencement day, a valid application had been made under section 36-20 or 104-25 of HESA but not determined, the application is to be determined after the commencement day in accordance with HESA as amended by this Schedule as if the application had been made under section 104-25 as amended.

Subitem (5) provides that subparagraph 104-25(2)(f)(ii) of HESA as amended by this Schedule applies in relation to circumstances that occurred, and periods that began, before, on or after the commencement day.

Item 191

Subitem (1) provides that if, before the commencement day, a decision referred to in item 1A, 2 or 2A of the table in section 206-1 of HESA was made then after the commencement day, the following decision is taken to have been made instead of the decision that was actually made:

for a decision referred to in item 1A or 2 of the table â a decision that subsection 104-25(1) does not apply to the person; and
for a decision referred to in item 2A of the table â a decision that subsection 104-25(2) does not apply to the person.

Subitem (2) provides that Item 190 of this Schedule applies in relation to the decision that is taken to have been made.

Subitem (3) provides that subitem(1) does not have the effect of changing the day the original decision was made.

Item 192

Item 192 is a savings provision and provides that Administration Guidelines made for the purpose of section 36-21 of HESA and in force immediately before the commencement day continue to have effect after the commencement day as if they had been made for the purpose of subsection 104-30(2) of HESA. The Item further provides that Guidelines as continued by this item may be amended or repealed as if they were Guidelines made under section 238-10 of HESA.

Item 193

This Item provides that the amendments made by this Schedule in relation to voluntary repayments apply in relation to a voluntary repayment made on or after the commencement day, regardless of when the debt to which the repayment relates was incurred.

Item 194

This Item provides that a funding agreement ceases to be in force at the start of the commencement day if: the agreement was made before this Act receives the Royal Assent; and was in force immediately before the commencement day.

Item 195

This Item provides that the Minister may, by legislative instrument, make rules prescribing matters of a transitional nature (including prescribing any savings or application provisions) relating to the amendments or repeals made by this Schedule or any other Schedule of the Bill.

Part 3 â Consequential amendments

Australian National University Act 1991

Item 196

This Item omits reference in section 41 of the ANU Act to â(2)â as there are no other subsections within that section.

Item 197

Subsection 41(2) of the ANU Act provides that fees that are payable to the University, including student contribution amounts and tuition fees within the meaning of HESA are payable in accordance with the Statutes. This Item makes a consequential amendment to remove reference to âstudent contribution amountsâ from subsection 41(2) of the Act (which, by the operation of Item 196 becomes section 41).

Item 198

Paragraph 43(b) of the ANU Act provides that the Council must apply student contribution amounts within the meaning of HESA solely for the purposes of the University. This Item makes a consequential amendment to remove reference to a student contribution amount from section 43 of the Act by repealing paragraph 43(b).

Item 199

Subsection 50(1) of the ANU Act provides for the Council to make Statutes in respect of certain matters. Paragraph 50(2)(u) provides that the power of the Council under subsection (1) includes the power to make Statutes with respect to the payment to University of fees, including student contribution amounts and tuition fees within the meaning of HESA. This Item makes a consequential amendment to remove reference to âstudent contribution amountsâ from paragraph 50(2)(u).

Education Services for Overseas Students Act 2000

Item 200

Subsection 9AB(1) of the ESOS Act requires the Secretary to register an approved provider if the criteria under that subsection are met. Paragraph 9AB(1)(b) requires that the provider is a resident of Australia (paragraph 9AB(1)(b)(i)) or a Table C provider within the meaning of HESA (paragraph 9AB(1)(b)(ii)). This Item makes a consequential amendment to omit reference in that paragraph to âTable Câ and substitute âan internationalâ so that the requirement in that paragraph is now in relation to an âan international providerâ.

Item 201

Section 16 of the ESOS Act provides that only a resident of Australia or a Table C provider within the meaning of HESA can be a registered provider under the Act. This Item repeals and substitutes section 16 of the ESOS Act so that the new section 16 provides that a registered provider must be a resident of Australia or an international provider within the meaning of HESA.

Income Tax Assessment Act 1936

Item 202

Paragraph 82A(2)(ba) of the Income Tax Assessment Act 1936 includes as the definition of expenses of self-education a student contribution amount within the meaning of HESA paid to a higher education provider within the meaning of HESA. This Item repeals the paragraph so as to remove reference to student contribution amount from that definition.

Income Tax Assessment Act 1997

Item 203

Paragraph 26-20(1)(ca) of the Income Tax Assessment Act 1997 prohibits the deduction under that Act of a student contribution amount paid to a higher education provider (within the meaning of HESA). In order to remove requirements in respect of a student contribution amount from subsection 26-20(1) of the Act, this Item repeals and substitutes paragraph 26-20(1)(ca). The effect of the new 26-20(1)(ca) is that a tuition fee (within the meaning of HESA) that is paid to a higher education provider for a unit of study in relation to which a person is a Commonwealth supported student under HESA cannot be deducted under this Act.

Part 4 â Amendments of Guidelines

Commonwealth Grant Scheme Guidelines 2012

Item 204

The Commonwealth Grant Scheme Guidelines 2012 (F2012L02442) were made on 27 November 2012 for the purposes of Part 2-2 (Commonwealth Grant Scheme) of HESA.

The purpose of Chapter 7 of those Guidelines is, pursuant to section 33-35 of HESA, to specify how to determine the funding clusters for units of study.

Paragraph 7.5.1 contains a table specifying the units and corresponding field of education codes for eight funding clusters. This determines the amount of Commonwealth support to which a provider is entitled for a place in a particular funding cluster.

This Item repeals and substitutes the table in paragraph 7.5.1 (including the two notes immediately under the table) to reflect the five new funding tiers which are to replace the funding clusters currently set out under 30â15 and 33â10 of HESA (see Item 45 of Schedule 1). This will ensure that the basic grant amount for a provider can be calculated accurately, as this is partially based on the number of Commonwealth Supported Places offered by a provider for particular units of study.

Part 5 â Repeals of instruments

Higher Education (Designated Courses of Study) Specification 2011

Item 205

The Higher Education (Designated Courses of Study) Specification 2011(F2011L02600) was made on 28 November 2011 under subsection 30-12(2) of HESA. This instrument specifies all higher education courses leading to a diploma, advanced diploma or associate degree qualification and enabling courses as designated courses of study in relation to a Table A provider for the purposes of allocating Commonwealth supported places to Table A providers under paragraph 30-10(1)(a) of HESA.

This Item repeals the Specification in order to incorporate sub-bachelor degrees into the demand-driven system. Enabling courses will be specified as designated courses.

Schedule 2 New Commonwealth ScholarshipScheme

Summary

From 1 January 2016, Schedule 2 of the Bill will require all providers with an equivalent student load of at least 500 fullâtime domestic students to annually direct 20 per cent (or a lower percentage as prescribed by the Commonwealth Grant Scheme Guidelines) of additional total revenue raised from deregulated student fees and Commonwealth contributions (compared to what would have been payable under the previous arrangements), into an institutional Commonwealth Scholarship scheme. The funds will be used to provide tailored, individualised support to disadvantaged students through scholarships. The arrangements to support access and participation will result in a small increase in regulation.

The additional revenue that is directed to the Commonwealth Scholarship scheme will need to be used in accordance with the Commonwealth Grant Scheme Guidelines (or, if the Guidelines are silent, then in accordance with the providerâs funding agreement).

Background

Conditions apply to providers that wish to receive Commonwealth Grant Scheme subsidies that are in addition to the conditions that apply to providers that are only receiving Commonwealth assistance (e.g. offering HELP). Participation in the new Commonwealth Scholarship scheme would be a condition of grant for Commonwealth Grant Scheme funding.

Detailed explanation

Higher Education Support Act 2003

Item 1

Item 1 inserts a new section 36-75 into Division 36 (What are the conditions of receiving a grant?) of Part 2-2 (Commonwealth Grant Scheme).

New subsection 36-75(1) requires a higher education provider to, no later than six months after the end of each year in respect of which a Part 2-2 grant is made by the Commonwealth to the provider, allocate the providerâs eligible amount for the year, with the amount to be used in accordance with the Commonwealth Grant Scheme Guidelines or, if no such Guidelines are in force for the purposes of this subsection, then in accordance with the terms of any section 30-25 funding agreement the provider has entered into with the Commonwealth. Notes explain that section 19-35 is also relevant (benefits and opportunities must be made available equally to all students) and that the New Commonwealth Scholarship Scheme is separate from Commonwealth scholarships under Part 2-4.

New subsection 36-75(2) provides that new subsection 36-75(1) will not apply to a higher education provider in relation to a year in the following circumstances:

if relevant circumstances that the Commonwealth Grant Scheme Guidelines prescribe apply to the provider; or
those Guidelines do not prescribe circumstances in relation to a year and the provider has less than 500 Commonwealth supported places for the year.

New subsection 36-75(3) provides that the Commonwealth Grant Scheme Guidelines may:

for the purposes of paragraph 36-75(1)(a),prescribe the use of the allocated amounts for providing scholarships or other benefits for the purposes of:
- increasing access to, and participation in, higher education by students (and prospective students) from disadvantaged backgrounds; and
- improving disadvantaged studentsâ course completion rates; and
prescribe other ancillary or incidental matters for the purposes of paragraphs 36-75(2)(a) and (3)(a).

New subsection 36-75(4) provides that a providerâs eligible amount for a year is the following percentage of that providerâs eligible revenue for the financial year:

20 per cent; or
if there is a lower percentage prescribed in the Commonwealth Grant Scheme Guidelines â that percentage.

New subsection 36-75(5) provides that the Commonwealth Grant Scheme Guidelines may prescribe how to work out a providerâs eligible revenue for a year and that, if the Guidelines do so, the providerâs eligible revenue for the year is the amount worked out by using the prescribed method.

New subsection 36-75(6) provides that, if the Commonwealth Grant Scheme Guidelines do not prescribe how to calculate a providerâs eligible revenue for a year, it is to be worked out by subtracting the providerâs comparison revenue for year from Commonwealth supported students from the providerâs revenue for year from Commonwealth supported students.

New subsection 36-75(7) explains that, for the purposes of new subsection 36-75(6), a providerâs revenue for year from Commonwealth supported students is the sum total of the following:

the grant amount payable to the provider under Part 2-2 for the year in question; and
tuition fees that are payable to the provider by its Commonwealth supported students for units of study with a census date in that year.

New subsection 36-75(8) explains that, for the purposes of new subsection 36-75(6), a providerâs comparison revenue for year from Commonwealth supported students is the sum total of the following:

the grant amount that would have been payable to the provider under Part 2-2 for the year in question â if the whole of the basic grant amount for the year were worked out under Item 180 of Schedule 1 to this Bill (once enacted); and
tuition fees that would have been payable to the provider by its Commonwealth supported students for units of study with a census date in that year â if all such tuition fees had been the maximum fees allowed under subitem 179(1) of Schedule 1 to this Bill (once enacted).

Item 2

This Item inserts the following definitions into the Dictionary at Schedule 1:

eligible amount has the meaning set out in subsection 36-75(4); and
eligible revenue has the meaning set out in subsections 36-75(5) and (6).

Item 3

This Item is an application provision which provides that the amendments to be made by Schedule 2 apply in relation to years commencing on and after the day that Schedule 2 commences.

Schedule 3 Indexation of HELP debts

Summary

Schedule 3 will change the HELP indexation rate to the Treasury 10 year bond rate (to a maximum of six per cent per annum). This better reflects the Governmentâs borrowing costs to fund the loan. This measure will take effect from 1 June 2016.

The change to the indexation would apply to both existing and new loans. Indexation would continue to be applied on 1 June each year by the Australian Taxation Office.

Background

Currently the amount of HELP debt that has been outstanding for 11 months is indexed on 1 June each year using an indexation factor derived from the change in the CPI as measured at 31 March of that year.

Detailed explanation

Higher Education Support Act 2003

Item 1

Division 140 of HESA covers how accumulated HELP debts are calculated and section 140-1 provides an outline of Division 140.

Item 1 replaces reference to CPI with reference to the 10 year bond rate in paragraph 140-1(2)(a).

Item 2

Section 140-10 provides for the HELP debt indexation factor and section 140â15 provides for index numbers.

Item 2 repeals and substitutes section 140-10.

New subsection 140-10(1) inserts a new method statement explaining how the HELP debt indexation factor is calculated for 1 June in a financial year. The steps of the new method statement are as follows:

Step 1 â add together the 10 year bond rate for March in that financial year and the 10 year bond rate for each of the immediately preceding 11 months.
Step 2 â divide the resultant figure from Step 1 by 1200 (to get an annualised indexation rate expressed as a percentage).
Step 3 â add 1 to the result of Step 2.
Step 4 â if the result of Step 3 is 1.06 or less, then that will be the HELP debt indexation factor for 1 June in that year â but if the result is greater than 1.06, the HELP debt indexation factor is 1.06.

New subsection 140-10(2) replicates the HELP debt indexation factor rounding up explanation of existing subsection 140-10(2) (the third decimal place is rounded up if the factor has four or more decimal places and the fourth decimal place is a number greater than four).

Item 2 also repeals and substitutes section 140-15.

New section 140-15 provides for a definition of the 10 year bond rate for a month. This is the Commonwealth Government 10 year bond capital market yield published for the month in question by the Reserve Bank of Australia.

Item 3

This Item inserts a definition of 10 year bond rate into the dictionary at Schedule 1 â i.e. the definition of that term as provided for in section 140-15.

Item 4

This Item replaces the definition of index number in the dictionary at Schedule 1 â i.e. the definition of that term as provided for in section 198-20.

Item 5

This Item is an application provision which explains that the amendments to be made by this Schedule apply in relation to working out a debt on or after the first 1 June after Item 5 commences (as Schedule 3 commences on 1 January 2016, this would be 1 June 2016).

Schedule 4 Minimum repayment income for HELP debts

Summary

Schedule 4 will establish a new minimum HELP repayment threshold ($50,637) from the 2016-17 income year. A person will only be required to make repayments of their HELP debts when their income exceeds this amount. This measure will reduce the minimum HELP repayment thresholds to increase repayment of HELP debts and improve the sustainability of the HELP scheme. A two per cent repayment rate will apply to those with incomes above this new threshold and up to the current base threshold ($56,264 in 2016-17). This measure starts from 1 July 2016.

Background

In the 2014-15 financial year, taxpayers are not required to start paying back their HELP loans until their annual incomes reach $53,345, with people required to make repayments of four per cent of their adjusted taxable income, rising to eight per cent for people with incomes above $99,070.

Detailed explanation

Higher Education Support Act 2003

Item 1

Section 154-10 of HESA provides for the minimum repayment income for an income year â i.e. the amount that a personâs income must be above before they will be obliged to start repaying their accumulated HELP debts.

Paragraph 154-10(a) provides that the minimum repayment income for the 2005-06 income year was $36,184. This amount has since been indexed every year, and for the 2014-15 income year is $53,346. This Item repeals and substitutes paragraph 154-10(a) to bring the minimum repayment income up to date for the 2016-17 income year, by providing for an amount of $50,637.

By virtue of paragraph 154-10(b), this figure would then be indexed under section 154-25 for later income years.

Item 2

Section 154-20 contains a table which lists repayment income thresholds and the applicable percentage rates for the compulsory repayment of HELP debts.

This Item repeals and substitutes this table. For the 2016-17 income year a person would not make a repayment if their income was $50,637 or less. The applicable percentages would be as follows (for later income years, the income amounts would be indexed under section 154-25):

from $50,638 but less than $56,264 â 2%
from $56,264 but less than $62,674 â 4%
from $62,674 but less than $69,082 â 4.5%
from $69,082 but less than $72,713 â 5%
from $72,713 but less than $78,162 â 5.5%
from $78,162 but less than $84,650 â 6%
from $84,650 but less than $89,105 â 6.5%
from $89,105 but less than $98,059 â 7%
from $98,059 but less than $104,492 â 7.5 %
from $104,492 and above â 8%.

Item 3

This Item provides that the amendments to HESA made by Schedule 4 apply in relation to income years commencing on and after the day Schedule 4 commences. As Schedule 4 commences on 1 July 2016, this means that the Schedule 4 amendments apply to the 1 July 2016 to 30 June 2017 income year.

Schedule 5 Research funding and research students

Summary

Schedule 5 provides for increased funding to be provided to support research under the Future Fellowship scheme while at the same time allowing universities to ask students assisted under the RTS to make a contribution to the cost of their courses.

As part of the 2014-15 Budget, the Government announced that it would provide $139.5 million over four years to support research under the Future Fellowship scheme.

In addition, the Government announced that it would reduce RTS funding provided to universities by 10 per cent per annum from 1 January 2016.

Schedule 5 allows universities to introduce a commensurate student contribution for RTS students from 2016 that could be deferred through HELP. There will be two categorisations of RTS courses; high cost and low cost. Whether a course is high or low cost will be determined by legislative instrument. High cost courses will include science, engineering, medical studies, pharmacy, dentistry, veterinary studies, human movement and psychology. Low cost courses will consist of all other fields of study.

RTS students in high cost HDR courses may be charged up to a maximum student contribution of $3,900 per EFTSL, and RTS students in low cost HDR courses may be charged up to $1,700 per EFTSL.

Schedule 5 will also amend the ARC Act to allow for additional funding to be provided to the Future Fellowship scheme, apply a one-off efficiency dividend in 2015-15, apply indexation to existing appropriation amounts and add an additional forward estimate amount of $736,972,000 for the 2017-18 financial year.

Background

The Government currently provides approximately $675 million per annum (indexed) to universities through the RTS to support the training of domestic HDR students in Australian universities.

Students supported under the RTS currently pay no student contribution for their HDR course.

The ARC Act provides for the funding of research programs. Each year the ARC Act is amended to change special appropriation funding amounts and to update the forward estimates in the Budget.

Detailed explanation

Part 1 â Research funding

Australian Research Council Act 2001

Item 1

Division 1 of Part 7 of the ARC Act provides for financial assistance for approved research programs. Section 48 sets out the years to which this Division applies.

This Item inserts new paragraph (n) into subsection 48(2), the effect of which is to provide that Division 1 of Part 7 also applies to the financial year starting on 1 July 2017.

Item 2

The amendments in Schedule 5 result in altering three existing financial year funding figures in the ARC Act and extending the forward estimates period to 2017â18, resulting in additional spending of $759,596,000 million.

This Bill updates the special appropriation funding cap administered by the ARC to reflect Government decisions, make indexation adjustments and add an additional forward estimate for existing schemes within the National Competitive Grants Program. Indexation adjustments and adding the last year of the forward estimate are part of the standard Budget process and are administrative in nature.

Section 49 of the ARC Act specifies the annual funding caps for the purposes of Division 1 of Part 7 (financial assistance for approved research programs).

The caps need to be increased to allow for additional investment in research as provided for in the 2014-15 Budget.

This Item repeals paragraphs 49(o), 49(p) and 49(q) and inserts new paragraphs 49(o), 49(p), 49(q) and 49(r) to increase the funding caps as follows:

from $853,110,000 to $875,642,000 for the financial year starting on 1 July 2014;
from $783,253,000 to $776,078,000 for the financial year starting on 1 July 2015;
from $716,205,000 to $723,472,000 for the financial year starting on 1 July 2016;

· to establish a cap for the financial year starting on 1 July 2017 of $736,972,000.

Part 2 â Research students

Higher Education Support Act 2003

Items 3 and 4

Part 2-3 of HESA provides for the payment of other grants to higher education providers and other eligible bodies. Item 8 of the table in subsection 41-10 provides that Table A and Table B providers are eligible for grants to support the training of research students. The Other Grants Guidelines (Research) 2012 were made under section 238-10 for the purposes of items 7, 8, 10 and 11(b) of the table in subsection 41-10(1). Chapter 2 of the Other Grants Guidelines (Research) 2012 deals with grants to support the training of research students.

Subsection 41-25 sets out the conditions on which other grants are made.

Item 3 changes the heading of section 41-25 to read âConditions on grants: main conditionsâ, to differentiate that section from the new section 41-26 that provides for the conditions on grants for research.

Item 4 inserts a new section 41-26 (Conditions on grants: research students).

New subsection 41-26(1) provides that, where grants are made to higher education providers to support training of their research students (see Item 8 of the table in subsection 41-10(1)) then, in addition to any other applicable conditions under section 41-25, the grants are made on the condition that providers must not charge their research students for units of study in their research courses more than the maximum research tuition fee multiplied by the EFTSL value of the unit.

The maximum research tuition fee for a unit is defined by new subsection 41-26(2) as follows:

for those students enrolled in a unit of study in a high cost course under the Other Grants Guidelines - $3,900; or
for those students enrolled in a unit of study in a low cost under the Other grants Guidelines - $1,700.

New subsection 41-26(3) provides that a person is a research student of a higher education provider if they are classified as such by their provider in accordance with the Other Grants Guidelines (in relation to their research course).

Item 5

Part 5-6 of HESA makes provision for the indexation of the amounts referred to in certain provisions of the Act, and section 198-5 contains a table setting out the amounts to be indexed. This Item adds a new Item 2A to this table â amounts mentioned in new subsection 41-26(2).

Item 6

This Item adds the following definitions into the Dictionary at Schedule 1 of HESA:

maximum research tuition fee (as defined in subsection 41-26(2));
research course (as defined in subsection 41-26(3)); and
research student (as defined in subsection 41-26(3)).

Item 7

This Item is an application provision, the effect of which is that the amendments to be made by this Schedule will apply to the following:

grants for years commencing on or after the day Part 2 of this Schedule commences (Part 2 of Schedule 5 commences on 1 January 2016); and
tuition fees for units of study with a census date on or after the day Part 2 of this Schedule commences.

Part 3 â Repeals of instruments

Determination made on 13 August 2004 under subsection 169-20(1) of the Higher Education Support Act 2003 (Federal Register of Legislative Instruments No. F2007B01092)

Item 8

On 13 August 2004, the then Minister for Education, Science and Training, made a Determination under subsection 169-20(1) of HESA (Federal Register of Legislative Instruments No. F2007B01092) that RTS students are exempt from paying student contribution amounts and tuition fees for units of study undertaken as part of research masters degrees and research doctoral degrees.

This Item repeals the Determination with the effect that, from 1 January 2016, providers would be able to charge RTS students undertaking HDR courses a contribution towards the costs of that degree.

Part 4 â Amendments of Guidelines

Other Grants Guidelines (Research) 2012

Items 9 to 11

The Other Grants Guidelines (Research) 2012 (F2012L02010) were made on 24 September 2012 for the purposes of items 7, 8, 10 and 11(b) of the table in subsection 41-10(1) of HESA.

Paragraph 2.1.1(2) provides that one of the purposes of Chapter 2 is, under subsection 45(2) of HESA, to specify some other matters relevant to grants to support the training of research students. Item 9 amends paragraph 2.1.1(2) to add in a reference to section 41-26 of HESA (which is to be inserted by Item 4 of Schedule 5).

Paragraph 2.10.5 currently specifies that RTS students are exempt from the payment of student contributions amounts and tuition fees for units undertaken as part of an HDR course of study. Item 10 repeals and substitutes paragraph 2.10.5 with a provision that provides that a student who is supported under paragraph 2.10.1 is a âResearch Training Scheme studentâ.

Item 11 inserts a new paragraph 2.21 into Chapter 2 to specify high cost and low cost fields of study for the RTS. New subparagraph 2.21.1 provides that, for the purposes of section 41-26 of HESA, a high cost course is a course of study that is as specified in the table. New subparagraph 2.21.2 provides that, for the purposes of section 41-26, a low cost course is any other course of study not specified in the table.

Schedule 6 VET FEE-HELP loan fees and limits

Summary

Schedule 6 of the Bill removes the current lifetime limits on VET FEE-HELP loans students may access.

Schedule 6 also removes the 20 per cent loan fee for full fee paying students receiving VET FEEâHELP.

To reflect these changes, Schedule 6 also makes minor amendments to the arrangements for reversing VET FEE-HELP debts, including where the student is unable to carry on with study due to changes in their circumstances.

These measures will improve access to, and affordability of, approved VET courses, and will ensure that those students who have reached the previous FEE-HELP limit, will now be able to engage in their chosen course of study.

These measures will commence from 1 January 2016.

Background

The existing VET FEE-HELP loan fee was implemented to assist the Government to manage the costs of extending HELP to higher level vocational education and training courses. The fee is no longer necessary as changed indexation arrangements for all HELP debts take account of the costs to government in providing the loans.

Detailed explanation

Part 1 â Main amendments

Higher Education Support Act 2003

Item 1

Currently there is a 20 per cent loan fee applicable to VET FEE-HELP loans accessed by certain full fee paying and fee for service VET students. This is put in place by subsection 137-18(2) providing that a personâs VET FEE-HELP debt is 120 per cent of the amount loaned to them.

This Item repeals and substitutes subsection 137-18(2) (including the note). The new subsection 137-18(2) provides that the amount of the VET FEE-HELP debt is the amount of the loan to the student. In other words, the effect of this Item is to remove the VET FEE-HELP loan fee.

Item 2

Subsection 137-18(4) provides that a personâs VET FEE-HELP debt for a VET unit of study is taken to be remitted if their FEE-HELP balance is re-credited under the following clauses in Schedule 1A:

clause 46 (the person has not completed their course and applies for reâcrediting of their FEE-HELP balance due to special circumstances);
clause 47 (the person does not or no longer has a tax file number); and
clause 51 (the personâs provider ceases to provide a course).

This Item repeals and substitutes subclause 137-18(4) (including the note). The new subclause 137-18(4) provides that a personâs VET FEE-HELP debt for a VET unit of study is taken to be remitted where any of the following apply, even if subclause 56(2) of Schedule 1A applies to the provider:

subclause 46(2) of Schedule 1A (reversal of VET FEE-HELP assistance when special circumstances apply);
subclause 51(1) (reversal of VET FEE-HELP assistance when the provider ceases to provide the course); or
subclause 89(1) (no entitlement to VET FEE-HELP assistance for students without tax file numbers).

Item 21 of this Schedule repeals and substitutes clause 56 of Schedule 1A. New subclause 56(2) explains that new subclause 56(1) would not apply to a provider in circumstances where clause 46 (as amended) applies to the unit which is a replacement unit under the VET tuition assurance requirements.

Item 3

Clause 40 of Schedule 1A explains what is covered in Part 2 of Schedule 1A (VET FEE-HELP assistance). This Item removes reference to there being a limit to the total amount of VET FEE-HELP assistance a student can receive.

Item 4

Clause 43 of Schedule 1A sets out the qualifying criteria for VET FEE-HELP assistance. This Item removes the criterion that the studentâs FEE HELP balance is greater than zero (paragraph 43(1)(b)).

Item 5

This Item corrects a typographical error by replacing the reference to paragraph 43(e) in clause 45A of Schedule 1 with a reference to paragraph 43(1)(e).

Items 6 to 14

Clause 46 of Schedule 1A currently concerns re-crediting a personâs FEEâHELP balance when a person applies to his or her provider for the balance to be re-credited due to special circumstances. As there is no longer any FEE-HELP balance, the clause needs to be amended to provide for reduction in a personâs VET FEE-HELP debt due to special circumstances.

Items 6 and 7 replace the heading to Subdivision 7-B of Schedule 1A and clause 46 respectively so that they relate to the amended content of the provisions.

Item 8 repeals the redundant subclause 46(1) (including the note) which relates to re-crediting a personâs FEE-HELP balance.

Items 9 to 11 amend subclause 46(2) to provide that a VET provider must, on the Secretaryâs behalf, make a determination under clause 46 when a person, in relation to a VET unit of study for which he or she received VET FEE-HELP assistance, makes an application that, due to special circumstances, his or her VET FEE-HELP debt for a unit of study should be remitted.

Under paragraph 46(2)(e), a person needs to make an application for re-crediting of VET FEE-HELP assistance on special circumstances grounds before the end of the application period set out in clause 49. The provider can also waive this period on the ground that it would not have been possible for the application to have been made before the period ended. Item 12 amends subparagraph 46(2)(e)(ii) so that, in the case of a waiver, the person needs to have made a request to the provider for waiver no later than 2 years after the end of the application period under clause 49.

Item 13 repeals the current note to subclause 46(2) and replace it with two notes. The first new note explains that, if subclause 46(2) applies, a personâs VET FEE-HELP debt is remitted, and the provider must repay the VET FEEâHELP assistance amount to the Commonwealth. The second new note explains that a providerâs decision that subclause 46(2) does not apply to a person is a reviewable decision under Division 16 of the Act (see item 23).

Item 14 adds a new subclause 46(4) to provide that a determination made under clause 46 is not a legislative instrument. This provision is included to assist readers as such an instrument would not be a legislative instrument within the meaning of that term in section 5 of the Legislative Instruments Act 2003.

Item 15

This Item repeals clause 47 of Schedule 1A (Re-crediting a personâs FEE-HELP balance â no tax file number). This clause is unnecessary because of the operation of clause 89 of Schedule 1A and section 137-18 of the Act.

Item 16

This Item removes the redundant reference to the re-crediting of a personâs FEE-HELP balance from paragraph 49(1)(a) of Schedule 1A.

Item 17

Clause 50 of Schedule 1A deals with applications for remission of a personâs VET FEE-HELP debt made under paragraph 46(2)(d). Currently, paragraph 50(1)(b) allows a VET provider to waive the requirement that an application be made before the end of the relevant application period on the ground that it would not have been possible to make the application within time.

This Item amends paragraph 50(1)(b) so that, in the case of a waiver, the person needs to have made a request to the provider for the waiver no later than two years after the end of the application period.

Item 18

Clause 51 of Schedule 1A currently concerns re-crediting a personâs FEE-HELP balance if the personâs provider ceases to provide a course.

This Item repeals and substitutes clause 51 so that the new clause 51 applies instead to provider repayment of VET FEE-HELP assistance if the personâs provider ceases to provide a course to that person.

New subclause 51(1) provides that a VET provider must, on the Secretaryâs behalf, determine that subclause 51(1) applies to that person if:

the person has been enrolled in a VET course of study with the provider; and
the person received VET FEE-HELP assistance for the unit; and
the person did not complete the requirements of the unit because the provider ceased to provide the course; and
the VET tuition assurance requirements applied when the provider ceased to provide the unit; and
the person chose the VET tuition fee repayment option for the unit.

A note explains that, if subclause 51(1) applies to a person, that personâs VET FEE-HELP debt is remitted and the provider has to repay the amount of the personâs VET FEE-HELP assistance to the Commonwealth.

New subsection 51(2) provides that the Secretary may make a determination under subclause 51(1) if the provider is unable to do so.

New subclause 51(3) provides that a determination made under subclause 51(1) is not a legislative instrument. This provision is included to assist readers, as such an instrument would not be a legislative instrument within the meaning of that term in section 5 of the Legislative Instruments Act 2003.

Item 19

This Item repeals the note to clause 52 which refers to clause 54 (which is repealed by Item 20).

Items 20

This Item repeals the redundant clause 54 of Schedule 1A (Amount of VET FEE-HELP assistance and FEE-HELP assistance must not exceed the FEE-HELP balance).

Item 21

Clause 56 of Schedule 1A currently concerns the effect of a personâs FEEâHELP balance being re-credited. This Item repeals and substitutes clause 56 so that it instead concerns the requirement for providers to repay amounts of VET FEE-HELP assistance to the Commonwealth.

The heading to clause 56 (effect of FEE-HELP balance being re-credited) is replaced with âRepayment of VET FEE-HELP assistance by providersâ.

New subclause 56(1) provides that a VET provider must pay to the Commonwealth amounts of VET FEE-HELP assistance that a person received for VET units of study with the provider if any of the following apply:

subclause 46(2) (which provides that a personâs VET FEE-HELP debt for a VET unit of study can be remitted when special circumstances apply);
subclause 51(1) (which provides that a personâs VET FEE-HELP debt can be remitted if the personâs provider ceases to provide a course to the person); and
subclause 89(1) (where there is no entitlement to VET FEE-HELP assistance for students without tax file numbers).

A note to new subclause 56(1) explains that the personâs VET FEE-HELP debt for units would also be remitted and the readerâs attention in this regard is drawn to subsection 137-18(4) of HESA.

New subclause 56(2) provides that a VET provider is not required to pay the Commonwealth under subsection (1) for VET FEE-HELP paid to the provider in relation to a student for a replacement unit (as set out in the VET tuition assurance requirements), and subsection 46(2) (remission of VET FEE-HELP debts for special circumstances) applies to the student in relation to that unit.

New subclause 56(3) provides that the VET tuition assurance aspects of the VET Guidelines may, where subclause 56(2) applies, set out amounts to be paid to the Commonwealth and who is to pay the amounts.

Item 22

Clause 89 of Schedule 1A concerns there being no entitlement to VET FEE-HELP assistance for students without tax file numbers. The note to subclause 89(1) currently explains that in such circumstances the personâs FEE-HELP balance for a unit is re-credited under subclause 47(1).

This Item repeals and substitutes the note. The new note explains that, where subclause 89(1) applies, a personâs FEE-HELP debt is remitted (see subsection 137-18(4)) and the provider has to repay the amount of VET FEE-HELP assistance to the Commonwealth (see clause 56).

Item 23

The table in clause 91 of Schedule 1A specifies which VET decisions are reviewable. This repeals and replaces item 1 of the table (decisions under subclause 46(2) to refuse to re-credit FEE-HELP balances) to reflect the changed terminology and operation of that subclause, while maintaining the itemâs substantive effect.

Part 2 â Application, saving and transitional provisions

Item 24

This Item is an application provision, the effect of which is as follows:

the amendment to be made by Item 1 of this Schedule (which removes the 20 per cent loan fee) applies in relation to debts incurred on or after this Schedule commences (i.e. 1 January 2016); and
the other amendments to be made by this Schedule (relating to removing FEE-HELP balances etc.) apply in relation to units of study with a census date on or after this Schedule commences (i.e. 1 January 2016).

Item 25

This Item is an application provision applicable to VET FEE-HELP assistance given before the commencement of Schedule 6 (on 1 January 2016). The effect of the Item is as follows:

if, immediately before 1 January 2016, a person had made a valid application under clause 46 of Schedule 1A of HESA and that application had not been determined as at this date, the application is to be determined after this date in accordance with HESA as amended by Schedule 6 â as if the application had been made under clause 46 as amended; and
subparagraph 46(2)(e)(ii) of Schedule 1A, as amended by Schedule 6, applies to circumstances that happened, and to periods that began, before, on or after the commencement day (1 January 2016).

Item 26

This Item provides that:

if before the commencement day of 1 January 2016, a decision was made concerning item 1 of the table in clause 91 of Schedule 1A then, after this day, a decision that subclause 46(2) does not apply to the person is taken to have been made (instead of the actual decision that was made); and
this does not result in changing the date of the actual decision.

Schedule 7 HECS-HELP benefit

Summary

Schedule 7 will discontinue the HECS-HELP Benefit. The HECSâHELP Benefit was introduced to encourage graduates to take up employment in early childhood education in regional areas, mathematics and science related occupations, and teaching and nursing professions.

The HECS-HELP Benefit has had low take up and has been ineffective in achieving its aims.

This Schedule will commence from 1 July 2015.

Background

The HECS-HELP benefit was introduced as part of the 2008-09 Budget. It was designed to reduce HECS-HELP repayments by around $1,800 a year for early childhood education and $1,700 a year for other occupations. Since 2008 the program has been expanded to other areas of identified need, including mathematics, science related occupations, teaching and nursing.

Detailed explanation

Higher Education Support Act 2003

Items 1 to 15

Item 12 repeals Division 157, which provides for the HECS-HELP benefit.

The remaining Items remove redundant references to the HECS-HELP benefit from HESA.

Income Tax Assessment Act 1997

Items 16, 17 and 18

Section 11.15 of the Income Tax Assessment Act 1997 identifies those types of ordinary or statutory income that are exempt income for the purposes of the Income Tax Assessment Act. Item 16 removes the HECS-HELP benefit from section 11.15.

Section 51-10 of the Income Tax Assessment Act contains a table which identifies recipients of certain types of education and training amounts who are exempt from paying income tax with respect to those amounts. Item 17 removes item 2.9 from that table â recipients of HECS-HELP benefits.

Item 18 removes the definition of HECS-HELP benefit from subsection 995-1(1) of the Income Tax Assessment Act.

Item 19 is an application and saving provision.

Subitem 19(1) explains that in Item 19:

· âActâ means HESA;

· âcommencementâ means when Schedule 7 commences (i.e. 1 July 2015); and

· âearlier income yearâ means an income year commencing before commencement.

Subitem 19(2) provides that the Schedule 7 amendments do not apply to HECS-HELP benefit for an earlier income year.

Subitem 19(3) provides that, without limiting subitem 19(2):

a person may, after commencement (i.e. after 1 July 2015), make an application in respect of an earlier income year in accordance with Subdivision 157-A of Division 157 of HESA as in force immediately before commencement; and
the Commissioner must make a determination on any application for an earlier year in accordance with Subdivision 157-C of Division 157 of HESA as in force immediately before commencement; and
section 140-5 of HESA, as in force immediately before commencement (i.e. 1 July 2015), continues to apply after this time for the purpose of working out a personâs former accumulated HELP debt in respect of a determination of HECS-HELP benefit for an earlier income year; and
section 154-3 of HESA, as in force immediately before commencement (i.e. 1 July 2015), continues to apply after this time for the purpose of working out the amount a person in relation to whom a HECS-HELP benefit has been determined for an earlier income year has to pay under section 154-1 of HESA; and
a person may, after commencement (i.e. after 1 July 2015), make an application for review of a decision referred to in item 4A of the table in section 206-1 of HESA (i.e. a determination of the Commissioner under section 157-20 of HESA) as that item was in force immediately before commencement; and
such a decision is able to be reviewed and given effect to in accordance with HESA as in force immediately before commencement; and
provisions of the taxation law (within the meaning of the Income Tax Assessment Act 1997) have effect as necessary in order to give effect to Item 19 of this Schedule.

Subitem 19(4) provides that the HECS-HELP Benefit Guidelines in force immediately before commencement (i.e. before 1 July 2015) continue to apply for the purpose of HECS-HELP benefit under HESA for earlier income years. The continued HECS-HELP Benefit Guidelines may be amended or repealed as if they were Guidelines made under section 238-10 of HESA.

Schedule 8 Indexation of amounts

Summary

From 1 January 2016, Schedule 8 of the Bill replaces HEGI with the CPI.

The CPI will be used each year to index all grants and regulated student contribution amounts for current students under HESA.

Background

In the 2008â09 Budget it was announced that the indexation rate for all grants under HESA would be changed to 75 per cent of 90 per cent of a mix of the Professional, Scientific and Technical Services Labour Price Index and 25 per cent of the CPI.

This change was staged over a period of four years, with all HESA grants being indexed by this rate in the 2012â13 Budget.

Detailed explanation

Higher Education Support Act 2003

Item 1

Subsection 198-10(1) provides that an amount is indexed on 1 January 2012 and on each subsequent 1 January by multiplying it by the indexation factor for the year in question.

This Item repeals and substitutes subsection 198-10(1) so that it provides that an amount is indexed on 1 January each year by multiplying it by the indexation factor for the year.

Item 2

Section 198-15 contains a formula which explains how the indexation factor for a year is calculated.

This Item repeals and substitutes the formula. The new formula is the index number for the December reference quarter divided by the index number for the December base quarter.

The December base quarter means the quarter ending on the 31^st of December two years and a day before the relevant 1 January.

The December reference quarter means the quarter ending on the 31^st of December that is a year and a day before the relevant 1 January.

Item 3

Section 198-20 provides the meaning of the index number by virtue of which the amounts set out in the table at subsection 198-5(1) are currently indexed using the HEGI, which is made up of 75 per cent of 90 per cent of the PSTSI and 25 per cent of the CPI.

This Item repeals and substitutes section 198-20 to provide for a new meaning for the index number.

New subsection 198-20(1) provides that the index number for a quarter is the All Groups CPI as published by the Australian Statistician.

New subsection 198-20(2) provides that, subject to subsection 198-20(3), if before or after the commencement of new subsection 198-20(2) the Australian Statistician subsequently publishes a substitute index number for a quarter, that subsequent index number is to be disregarded for the purposes of section 198-20.

New subsection 198-20(3) provides that, if before or after the commencement of new subsection 198-20(3), the Australian Statistician changes the index reference period for the CPI prior to the commencement of subsection 198-20(3), then in order to apply section 198-20 after the change happens, regard is only to be given to the published index numbers for the new reference period.

Item 4

This Item repeals the definition of indexation period in the Dictionary at Schedule 1.

Schedule 9 University name change

Summary

The amendments to HESA to be made by Schedule 9 recognise the passage of the University of Ballarat Amendment (Federation University Australia) Act 2013 by the Victorian Parliament, updating the name of the University of Ballarat to Federation University Australia. This would take effect from the day after the Bill, once enacted, receives the Royal Assent. This measure would take the name change into account, and amend the list of approved providers in the HESA to reflect the new name.

Background

The University of Ballarat is currently listed as a Table A provider in the HESA.

Detailed explanation

Higher Education Support Act 2003

Items 1 and 2 amend the list of âTable A providersâ in section 16-15 of HESA to reflect the change of name of the University of Ballarat to Federation University Australia.

Schedule 10 New Zealand citizens

Summary

Schedule 10 of the Bill will allow certain New Zealand citizens who are Special Category Visa holders to be eligible for HELP assistance from 1 January 2015.

Schedule 10 amends the citizenship or residency requirements for HELP loans to allow New Zealand citizens who are Special Category Visa holders (as defined by section 32 of the Migration Act 1958) to be eligible for HELP, providing they:

first entered Australia:

as a dependent minor; and
at least 10 years before applying for HELP:

§ have been physically present in Australia for at least eight of the previous 10 years at the time of application for HELP; and

§ have been physically present in Australia for at least 18 months out of the last two years at the time of application for HELP; and

are otherwise eligible for the loan.

The intent is that students who meet these criteria on 1 January 2015 will be eligible for HELP, and also that future cohorts of students who meet the criteria from this date will be eligible.

Background

Eligibility for the various HELP schemes is currently restricted to Australian citizens and permanent humanitarian visa holders (in addition, permanent visa holders can receive FEEâHELP if they are undertaking a bridging course for overseas trained professionals).

Detailed explanation

Higher Education Support Act 2003

Chapter 3 of HESA deals with the kinds of HELP assistance that the Commonwealth provides to students (HECS-HELP; FEE-HELP; OS-HELP; and SA-HELP).

There are certain eligibility criteria governing access to HELP assistance. This includes citizenship or residency requirements, which restrict access to HELP assistance to the following categories of student:

Australian citizens;
permanent humanitarian visas holders resident in Australia; and
permanent visa holders resident in Australia who are undertaking a bridging course for overseas-trained professionals.

Division 7 of Schedule 1A of HESA deals with the entitlement to VET FEE-HELP assistance. Again, there are certain eligibility criteria governing access to VET FEE-HELP assistance including requirements that the person be an Australian citizen, or a permanent humanitarian visa holder who will be resident in Australia for the duration of the VET unit of study.

This Schedule amends these requirements to enable certain New Zealand citizens who are Special Category Visa holders to access HELP assistance and VET FEE-HELP assistance.

Item 3

The amendments to be made by Schedule 1 of this Bill streamline the eligibility requirements for Commonwealth assistance, and also provide for the merging of the FEEâHELP and HECS-HELP loan schemes for all higher education students. From the commencement of Schedule 1 (1 January 2016), the entitlement to HECS-HELP assistance will be governed by Part 3-3 (which currently relates to FEE-HELP). The entitlement to OS-HELP and to SA-HELP will continue to be governed by Parts 3-4 and 3-5 respectively.

Currently, section 104-1 provides that a student is entitled to FEE-HELP assistance for a unit of study (which will become an entitlement to HECS-HELP assistance following the merger) if he or she meets certain criteria, including that the student meets the citizenships or residency requirements in section 104-5. Under subsection 104-5(1), a student will meet the citizenship or residency requirements if he or she is:

an Australian citizen; or
a permanent humanitarian visa holder who will be resident in Australia for the duration of the unit; or
a permanent visa holder resident in Australia for the duration of the unit, which is being undertaken (or is to be undertaken) as part of a bridging course for overseas-trained professionals.

This Item adds new subsections 104-5(2A) and (2B).

New subsection 104-5(2A) provides that a student will also meet the citizenship or residency requirements for a unit of study if he or she:

is a New Zealand citizen; and
holds a special category visa under the Migration Act 1958; and
both first began to be usually resident in Australia at least 10 years before the test day (see new subsection 104-5(2B)) and was a dependent child when he or she first began to be usually resident in Australia; and
has been present in Australia for a period or periods totalling 8 out of the last 10 years immediately before the test day; and
has been present in Australia for a period or periods totalling 18 months out of the last 2 years immediately before the test day.

New subsection 104-5(2B) provides that the test day (for the purposes of subsection 104-5(2)) is the earlier of the following:

· if the student has previously made a successful request for Commonwealth assistance under Chapter 3 in respect of a unit of study that formed part of the same course of study â the day that the person first made the request; or

· otherwise â the day when the student made the request for Commonwealth assistance with respect to the unit.

Item 1

Because the amendments to be made by Schedule 1 will not commence until 1 January 2016, this Item inserts the amendments to be made to section 104-5 into section 90-5(2) as new subsections 90-5(2A) and (2B). Section 90-5, which currently sets out the citizenship or residency requirements for HECS-HELP assistance, is to be repealed by Item 73 of Schedule 1).

This will enable the extension of HECS-HELP assistance to certain New Zealand citizens who are Special Category Visa holders to commence from 1 January 2015, which is when Schedule 10 will commence.

Items 2 and 4

These Items make minor consequential renumbering amendments to sections 90-5 and 104-5.

Items 6, 9 and 9

Section 118-5 sets out the citizenship or residency requirements governing the entitlement to OS-HELP assistance (which provides assistance to students for periods when they study overseas). Section 126-5 sets out the citizenship or residency requirements governing the entitlement to SA-HELP assistance (which provides assistance for the student and amenities fee). Clause 44 of Schedule 1A sets the citizenship or residency requirements governing the entitlement to VET FEE-HELP assistance for VET unit of study.

These Items will make amendments to sections 118-5 and 126-5 and clause 44 of Schedule 1A in similar forms to those that apply in the case of HECS-HELP assistance, which enables certain New Zealand citizens who are Special Category Visa holders to access OS-HELP assistance, SA-HELP assistance and VET FEE-HELP assistance (as long as the person meets other applicable requirements).

Items 5 and 8

These Items make minor consequential renumbering amendments to sections 118-5 and 126-5.

Items 10 and 11

These Items add a definition of dependent child into the Dictionary at Schedule 1 of HESA. Under this definition, a person is the dependent child of someone if the person:

is aged under 18 years old; and
does not have a spouse or de facto partner (which has the meaning provided for in the Acts Interpretation Act 1901).

A child for the purpose of this definition includes, but is not limited to, a child within the meaning of the Family Law Act 1975.

Item 12

This Item is an application provision, the effect of which would apply the Schedule 10 amendments to units of study with a census date on or after Schedule 10 commences (i.e. 1 January 2015).

ATTACHMENT A

Regulation Impact Statement

2014-15 Budget Higher Education Reforms

Title	Higher Education and Research Reform Amendment Bill 2014
Database	Explanatory Memoranda
Date	02-12-2014 06:04 PM
Source	House of Reps
System Id	legislation/ems/r5325_ems_829f5750-c9d5-40bc-9a7c-069cb8bec583