Opposition seeks changes to eligibility for Youth Allowance for inner regional students

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Opposition seeks changes to eligibility for Youth Allowance for inner regional students

Posted 29/10/2010 by Luke Buckmaster

Youth Allowance phamplet
The House of Representatives has passed by 74 votes to 70 a motion by Opposition whip Nola Marino ‘requiring’ the Government to introduce legislation that would make it easier for students in inner regional areas to qualify for independent Youth Allowance. Meanwhile, in the Senate, National Party Senator, Fiona Nash, has introduced a private members bill that seeks to introduce a measure along the same lines as that proposed in Ms Marino’s motion.

This issue has its origins in substantial changes to student assistance that the Rudd-Gillard Government introduced through the Social Security and Other Legislation Amendment (Income Support for Students) Bill 2009.

As explained in the Parliamentary Library Bills Digest, the bill sought to make a number of changes to student income support in order to increase the accessibility of higher education. These changes formed part of the government response to the Review of Higher Education conducted by Emeritus Professor Denise Bradley. The measures were wide ranging and included changes to income tests and criteria for establishing independence for Youth Allowance and AUSTUDY and expansion of the Commonwealth Scholarships program.

 The main area of contention in the bill was the change to eligibility for independent status under Youth Allowance. Under the proposed change, applicants for Youth Allowance would no longer be able to claim that they are ‘independent’ based on part-time employment or wages. The attainment of ‘independent’ status means that applicants for Youth Allowance are exempt from the parental means test that normally applies to that payment.

Under the previous work participation requirements for independence, a person was required to have:
  • worked full-time for at least 18 months in the previous two years or
  • worked part-time for at least two years since leaving school or
  • have been out of school for at least 18 months and earned at least 75 per cent of the maximum rate of pay under Wage Level A of the Australian Pay and Classification Scale in an 18 month period.
 Under the changes, the second and third of the above criteria were to be abolished, preventing many young people who previously took a ‘gap’ year between finishing high school and commencing university studies or who were employed after finishing school, from claiming to be independent and thus escape the parental income test on their payments.

This change was intended to close a loophole under which students from higher income families have been able to access Youth Allowance—an issue highlighted by the Bradley Review.

Ultimately, the Bill did not pass until an agreement was reached between the Government and the Opposition. This agreement meant that students who live away from our major cities and regional centres and have to move would be eligible under the previous independence test. This test would be restricted to those who leave home to study, whose parents earn less than $150 000 a year and who live in ‘Very Remote’, ‘Remote’ or ‘Outer Regional’ areas as defined by the Australian Bureau of Statistics (known as Australian Standard Geographical Classification (ASGC) Remoteness Structure (RA) or AGSC-RA).

 The amendments were paid for by a reduction in annual start-up scholarships to $2128 in order to keep the changes cost neutral. According to the then Minister, Julia Gillard, the changes were expected to allow an additional 1900 students access to independent Youth Allowance.

Despite the above agreement, the Opposition committed during the recent election campaign to ‘relax the eligibility criteria for the Independent Youth Allowance which will be extended to students in the Inner Regional Category’. This category includes cities such as Bathurst, Goulburn, Lismore, Wagga Wagga, Taree, Albury-Wodonga, Shepparton,  Ballarat, Bendigo, Rockhampton, Bundaberg, Bunbury, Launceston and Hobart.

The text of Ms Marino’s motion reflects the Opposition election commitment and is as follows:

 The order of the day having been read for the resumption of the debate on the motion of Ms Marino—That this House:
 (1) require the Government:
(a) urgently to introduce legislation to reinstate the former workplace participation criteria for independent youth allowance, to apply to students whose family home is located in inner regional areas as defined by the Australian Bureau of Statistics instrument Australian Standard Geographical Classification; and
(b) to appropriate funds necessary to meet the additional cost of expanding the criteria for participation, with the funds to come from the Education Investment Fund; and
(2) send a message to the Senate acquainting it of this resolution and requesting its concurrence, 9:16:47 AM.
 According to the Explanatory Memorandum, the objective of Senator Nash’s bill, the Social Security Amendment (Income Support for Regional Students) Bill 2010, is to ‘require the same eligibility criteria for Independent Youth Allowance to apply to all four ASGC-RA zones’—that is, to include Inner Regional students.

The Explanatory Memorandum suggests that the financial impact of this change is approximately $90 million per annum. Further, it says that the change is ‘to be budget neutral, with funding to be appropriated from the Education Investment Fund’.

Under Section 53 of the Constitution, the Senate cannot initiate money bills, so the question of funding will be faced in the House of Representatives if the bill proceeds.

It is unclear how many additional students would become eligible for independent Youth Allowance under the changes. In response to an Estimates Question on Notice, the Department of Employment, Education and Workplace Relations estimated that as at 24 April 2009, there were around 13 387 inner regional higher education students who live away from home in receipt of Youth Allowance.

The effect of Ms Marino’s motion is unclear. In relation to the effect of motions, House of Representatives Practice states that:

 ... the effect of such orders and resolutions of the House on others outside the House may be a limited one. 
It adds though that:

 ... this is not to say that the opinions of the House are to be disregarded, as it is incumbent upon the Executive Government and its employees and others concerned with matters on which the House has expressed an opinion to take cognisance of that opinion when contemplating or formulating any future action.
At the very least, it may be that the successful motion gives an indication of voting intentions should Senator Nash’s bill proceed to a vote in the House.

(Image sourced from: centrelink.gov.au)

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