Bills Digest 58 1996-97 Student and Youth Assistance Amendment (Waiting Period) Bill 1996


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WARNING:
This Digest is prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments.

This Digest was available from 28 November 1996.

CONTENTS

Passage History

Student and Youth Assistance Amendment (Waiting Period) Bill 1996

Date Introduced: 30 October 1996
House: House of Representatives
Portfolio: Employment, Education, Training and Youth Affairs
Commencement: At Royal Assent.

Purpose

The Student and Youth Assistance Amendment (Waiting Period) Bill 1996 (the Bill) seeks to amend the Student and Youth Assistance Act 1973 (the Act) to:

  • implement a 104-week waiting period for access to AUSTUDY benefits in respect of (most categories of) migrants (including New Zealand citizens) who arrive in Australia on or after 1 January 1997; and
  • for those categories of migrants who are to be subject to the waiting period, to provide for limited exemptions from it in certain circumstances.

Background

The Bill seeks to implement some of the cost-saving measures in the Employment, Education, Training and Youth Affairs portfolio announced in this year's Budget. The Government anticipates that the introduction of a 104-week waiting period for newly-arrived migrants is going to lead to savings of $5.6 million dollars in the 1996-97 financial year. In the 1997-98 and 1998-99 financial years, the Government expects to save $12.3 million and $12.6 million, respectively. The 1996-97 Budget allocation for education assistance and support is approximately $1.694 billion.(1)

Policy rationale

The policy decision to impose a 104-week waiting period for AUSTUDY upon most groups of newly-arrived migrants appears to have been a recent one, and possibly inspired by the Social Security Legislation Amendment (Newly Arrived Resident's Waiting Periods and Other Measures) Bill 1996, which proposes to implement a similar waiting period in relation to social security benefits. Coalition policy documents since Fightback! clearly set out its policy to implement a 2-year waiting period for social security benefits; however, no waiting period for AUSTUDYis mentioned specifically in the published material. Nor had any of various inquiries into the AUSTUDY scheme recommended a waiting period.(2)

It should be noted that the introduction of a waiting period was recommended by Bob Birrell and Ian Dobson, in July 1996. In 1994, Birrell and Dobson conducted a study into AUSTUDY dependence amongs overseas-born students, the findings of which were published that year in the journal People and Place.(3) The results of the study indicated that, in apparent contrast to the overall low rate of welfare dependency amongst Hong Kong-born migrants, the rate of AUSTUDY dependence amongst Hong Kong-born university students was 51.2 per cent, marginally lower than that of Australian-born students (51.8 per cent).(4) In this context, the authors noted that many of these children would have gained permanent residency with their families under the Business Migration Program. To qualify for migration under this program, applicants had to establish that they could bring into Australia at least $500,000 for investment purposes, as well as additional funds to set up residence.(5) One of the explanations offered by the authors as to the seemingly high rate of AUSTUDY dependence amongst Hong Kong and Malaysian-born students was that the families of these students had arranged their financial affairs in such a manner as to meet the AUSTUDY assets test.

The publication of this article coincided with a number of media reports about the 'rorting' of the AUSTUDY scheme by students (local as well as overseas-born) whose families were able to minimise their taxable income and arrange their assets in such a manner as to pass the relevant means tests.(6)

Arguments for the Bill

These include:

  • migrants who enter Australia under the general migration program (as opposed to refugee and humanitarian migrants) should be able to support themselves anyway (ie by gaining employment, or through sponsorship and assurances of support provided by relatives)
  • the Bill provides a disincentive to wealthy overseas families from arranging their financial affairs to minimise their taxable income in Australia, so that they meet the AUSTUDY means test.

Arguments against the Bill

These include:

  • in the absence of the waiting period, persons who would be most likely to apply for AUSTUDY within the first two years of their arrival would be the dependent high school and university-aged children in migrant families. Given that they may not have had much of a say in their parents' decision to migrate to Australia, it would appear to be unfair to penalise them for a decision made by their parents
  • a reason commonly cited for the success of Australia's migrant settlement program is the fact that the children of migrants, by virtue of their ease of access to education, have been able to attain upward mobility and make a significant contribution to Australian society. Access to AUSTUDY facilitates access to education. Imposing barriers to this may lead to the development of a 'migrant underclass', which would in itself lead to the undermining of social cohesion, and thus, the success of the Australia's migrant settlement program.

Exemptions from the requirement to wait 104 weeks

The Bill provides for exemptions from the waiting period in respect of the following categories of migrants:

  • refugee and humanitarian migrants and their partners and dependent children;
  • a migrant who was the holder of a subclass 820 (Extended eligibility (spouse)) visa before 1 January 1997. This is a two-year temporary visa that is issued to a person who makes an on-shore application for permanent residency on the basis that he or she is a spouse (married or de facto) or fiance of an Australian citizen or lawful permanent resident.
  • a migrant who was the holder of a subclass 826 (Interdependency) visa before 1 January 1997. This visa is a two-year temporary visa issued to a person who makes an on-shore application for permanent residency on the ground that he or she is in an interdependency relationship with an Australian citizen or lawful permanent resident.

Proposed subsection 6A sets out further exemptions to the requirement to wait 104 weeks, in relation to migrants who hold, at 1 January 1997, any of the following categories of visa:

  • a subclass 832 (Close ties) visa. People who are able to apply for this visa include: 'eligible New Zealand citizens'(7), former Australian citizens, former Australian permanent residents, and 'innocent' illegals;
  • a subclass 833 (Certain unlawful non-citizens) visa. This visa can be obtained by 'innocent illegals';(8)
  • a visa in a class of visas determined by the Minister of Employment, Education, Training and Youth Affairs for the purposes of proposed paragraph 6A(e). It is unclear as to which, if any, visa classes might be determined.

Note:The list of exemptions set out in the Bill appears to differ from that provided in both the Minister's Budget Press Release.(9) on the subject, as well as from the list provided by the Department of Employment, Education and Training in its Budget 96 - Questions and Answers publication posted on the Internet (consulted at the time of writing).(10) The Budget Press Release and the Internet list note only one exemption - people who have held a subclass 820 visa.

The Bill also proposes the exemption of members of the immediate family of the holders of exempt visas. The provisions governing this exemption are discussed in greater detail in the Main Provisions section of this Digest.

Further exemption - Change in circumstances residents

The Bill provides for further exemptions from the waiting period, in respect of a 'change of circumstances resident'. People who fall within this category are listed in proposed subsection 6F(2). Proposed subsection 6F(3) provides for when subsection (2) ceases to apply and the person is again subject to the 104 week waiting period. 'Change of circumstances residents' are to receive AUSTUDY allowance at the Student Homeless Rate.

Proposed section 6F will be discussed in greater detail in the 'Main Provisions' part of this Bills Digest.

Main Provisions

Item 2 inserts a number of provisions after existing section 6. Proposed section 6A sets out a series of terms for the purposes of Part 2 of the Student and Youth Assistance Act; this Part deals with eligibility for AUSTUDY.

Proposed section 6B sets the criteria for deciding, for the purposes of the 104 week waiting period, whether the person is residing in Australia. Subsection 6B(1) provides that a person is not to be treated for the purposes of residing in Australia unless the person intends to remain permanently in Australia. Proposed subsection 6B(2) lists matters that must be taken into account by the decision-maker in deciding whether a person intends to remain permanently in Australia. These include:

  • the nature of the accommodation used by the person in Australia;
  • the nature and extent of the family relationships the person has in Australia;
  • the nature and extent of the person's employment, business or financial ties with Australia;
  • the nature and extent of the person's assets located in Australia;
  • the frequency and duration of the person's travel outside Australia;
  • any other matter relevant to determining whether the person intends to remain permanently in Australia.

Comment

This provision appears designed to target the family members of 'astronauts', ie those migrants who, upon obtaining permanent residency in Australia, return home, but leave their children here to study as local students (ie. in HECS-funded university places, and eligible for AUSTUDY), to return home after gaining their degrees. However, depending on how the criteria are applied, they could conceivably be applied in such a manner as to determine that, say, an independent migrant (who, since gaining Australian permanent residency, who has not yet invested in property in Australia, and may have returned overseas to visit his or her family) does not intend to remain in Australia.

The section does not provide any guidance as to the weight that a decision-maker must give to each of the matters set out in proposed subsection 6B(2); the provision states only that the decision-maker must take the factors into account.

In the absence of further policy guidance, decision-makers may give different emphases to different criteria. This may lead to different decisions in relation to similar fact situations, thus possibly undermining the consistency of the decision-making process. Alternatively, in the situation where a policy has been formulated for the application of the criteria, the danger arises of the policy being applied inflexibly, regardless of the factual circumstances of the particular case.

Furthermore, given that proposed subsection 6B(2) does not state that these criteria are exhaustive, a decision-maker may take into account other factors, and this may lead to different outcomes in relation to similar factual situations.

The criteria for deciding whether a person intends to remain permanently in Australia, and therefore whether the person resides in Australia for the purpose of ultimately qualifying for AUSTUDY are subjective. They will also be subject to review, both internally (DEETYA) and externally (the Student Assistance Review Tribunal and the Administrative Appeals Tribunal).

Item 2 also proposes the insertion of section 6C, which defines 'refugee' for the purpose of the Act.

Item 2 also proposes the insertion of section 6F. Subsections 6F(1) and (2) define when a person is a 'change of circumstances resident' and is therefore not subject to the AUSTUDY waiting period. A person is a 'change of circumstances' resident if they are under 21 years of age, and:

  • became an orphan after entering Australia; or whose parents, or only parent:
  • began serving a sentence of life imprisonment, or at least 10 years, after the person entered Australia; or
  • became mentally incapacitated after the person entered Australia, and are likely to remain so for an indefinite period; or
  • started living in a nursing home after the person first entered Australia, and are likely to continue living in a nursing home for an indefinite period; or
  • went missing after the person entered Australia.

A person may also become a 'change of circumstances resident' if:

  • he or she can no longer with his her or her parents, because to do so would seriously endanger the person's physical or mental well-being;
  • he or she no longer lives with his or her parents or parent, but is in the lawful custody, control or guardianship of another person;
  • he or she no longer lives with his or her parents, and has become too old to be in the lawful custody, control or guardianship of another person.

Comment

It should be noted that, currently, applications for the Student Homeless Rate (SHR) of AUSTUDY on the basis of a 'change in circumstances' are established against the student's natural or adoptive parents, even if the parents are not living in Australia. The AUSTUDY Policy Guidelines state:

SHR cannot be paid where a student is fleeing an abusive relative or sponsor in Australia and there has been no case for SHR established against the parent(s) regardless of the parents' location.

Migrants who entered Australia under a Sponsorship and/or Assurance of Support agreement need to establish that their sponsor and/or assuror cannot provide support. Support from relatives, community organisations, sponsors and assurors should be thoroughly investigated to determine whether SHR is payable.(11)

There is no indication that applications for SHR by persons subject to the waiting period will be assessed any differently.

Proposed subsection 6F(3) provides when subsection 6F(2) will cease to apply to a person, so they are again subject to the waiting period.

Comment

Proposed subsection 6F is unclear in a number of respects. First, it does not specify what happens in respect of the 104 week waiting period when the circumstances of a 'change of circumstances resident' are altered so that he or she is no longer a 'change of circumstances resident'. Is the period for which the person received AUSTUDY counted for the purposes of the waiting period? Or is that period discounted, and the clock 'reset' to the time before the person became a 'change of circumstances resident'? For example:

B, who is 17 years of age, arrives in Australia on 2 July 1997. On 2 February 1998 (after approximately 26 weeks' residency in Australia), B's circumstances change so that she is entitled to AUSTUDY. On 2 July 1998, B's circumstances change again, so that she is no longer entitled to AUSTUDY. At this stage, B has been resident in Australia for 52 weeks.

What is the length of the remaining waiting period? Is it 52 weeks, or 78 weeks? It may be appropriate to amend the Bill to insert transitional provisions to deal with the situation described above.

In addition, the provision does not make clear what happens when person has been a 'change of circumstances' resident for more than 104 weeks, but then his or her circumstances subsequently change so that he or she would otherwise not be a 'change of circumstances resident'. Given that the person would have been resident in Australia for more than 104 weeks, it would appear that they would no longer be subject to the waiting period, but this is not entirely clear. In this regard, it might be appropriate to introduce an 'avoidance of doubt' provision.

Exemptions to the waiting period in respect of immediate family members of 'refugees'

Proposed subsection 8(2) provides that subsection 8(1) does not apply to, among others, a refugee (as defined in section 6C) or a person who was a family member of a refugee when the refugee arrived in Australia. [Emphasis added.]

As noted above, proposed section 6A defines a number of terms for the purposes of this Part; the terms defined include 'family member', which, in relation to a person, means a partner of that person, or a dependent child of that person. As well, the word 'partner' is defined, as, 'in relation to a person who is a member of a couple, means the other member of the couple.''

Proposed sections 6D and 6E respectively provide definitions of 'dependent child', and 'member of a couple'. A child is a 'dependent child' of another person:

  • if the other person is a parent of the child and the child is either: under 18 and wholly or substantially in the parent's care and control (whether alone or jointly with someone else); or is 18 or older and financially, psychologically or physically dependent on the parent (whether alone or jointly with someone else).

A person is a 'member of a couple':

  • if he or she is legally married to another person and is not living separately and apart from the other person on a permanent or indefinite basis; or
  • the person is in a heterosexual relationship, is not legally married to his or her partner, are over the age of consent applicable in the State or Territory in which they live, and they are not in a 'prohibited relationship' for the purposes of the Marriage Act 1961(12). In addition, the relationship between the parties must be a 'marriage-like relationship' (ie they do not live separately and apart from each other on a permanent or indefinite basis).

Comment

These provisions may operate to exclude family members of refugees from the exemption provisions, thereby leaving them subject to the 104-week waiting period. In some cases, particularly in the context of refugee and humanitarian migrants, it is possible that members of their families will not be covered by the exemption due to the absence of the necessary relationship at the time of the 'primary' migrant's arrival. The following examples, cited in the Senate Legal and Constitutional Legislation Committee's inquiry into the Social Security (Newly Arrived Resident's Waiting Periods and Other Measures) Bill 1996 as examples of the likely operation of similar provisions in that Bill, are illustrative:

  • a refugee wants to sponsor a fiance or someone they have married after coming to Australia;
  • a refugee learns that minor children from whom he or she has been separated, and thus were not categorised as 'dependants' at the time of their application, are alive and in need of their support.(13)

In addition, unlike the Social Security (Newly Arrived Resident's Waiting Periods and Other Measures) Bill, the current Bill does not provide for the Secretary of the Department of Employment, Education Training and Youth Affairs to exercise his discretion to treat another person as a family member for the purposes of this part.

Item 2 also proposes the insertion of subsection 6G. This provision defines a 'post-1996 Australian resident' (and therefore possibly liable to be subject to the waiting period) as either:

  • a person who first entered Australia as a permanent resident or on a permanent visa after 1997; or,
  • a person who last entered Australia on or after 1 January 1997 and subsequently became an Australian resident. (This takes into account the fact that New Zealand citizens will still be required to establish that they intend to remain permanently in Australia.)

Item 2 also proposes the insertion of subsection 6H. This section provides a definition for 'pre-1997 Australian resident'. This is an Australian resident other than a New Zealand citizen who is not a 'post-1996 Australian resident'. Essentially, a New Zealand citizen is taken to be a 'pre-1997 Australian resident' provided that he or she has lived in Australia continuously for the last 26 weeks, or has, during the last 52 weeks, not been absent from Australia for a period of, or periods totalling, more than eight weeks.

Item 3 proposes amendments to existing subsection 7(1), to ensure that the discretion of the Secretary of DEETYA to approve payment of AUSTUDY benefit to an applicant is only exercisable subject to the satisfaction of the requirements in sections 7, 8,9 and the Regulations.

Item 4 proposes the insertion of new paragraph 7(1)(a), to make clear that the Secretary may grant a benefit to an Australian citizen, a pre-1997 Australian resident, or (where the criteria allow) to a post-1996 Australian resident.

Item 5 proposes the insertion of subsection 7(1A) after subsection 7(1), to prevent the Secretary from exercising his discretion to grant AUSTUDY benefit to a person who is subject to the 104-week waiting period, and that waiting period has not ended.

Item 6 proposes the insertion of sections 8 and 9 after existing section 7. Proposed subsection 8(1) makes post-1996 Australian residents subject to a waiting period. Proposed subsection 8(2) lists those persons who are exempt from the waiting period:

  • a refugee (the definition of 'refugee' in proposed section 6C should be noted);
  • a person who was a family member of a refugee when the refugee arrived in Australia;
  • an 'exempt resident' (as defined in proposed section 6A); and
  • a person while that person is a 'change of circumstances' resident.

Proposed section 9 sets the duration of the waiting period in relation to those who are liable. Proposed subsection 9(1) provides that where the person is not a New Zealand citizen, the waiting period is 104 weeks from the day on which the person entered Australia, or was granted a permanent visa, whichever is the later.

Proposed subsection 9(2) provides that where the person is a New Zealand citizen, the waiting period is 104 weeks from the day on which the person became an Australian resident.

Proposed subsection 9(3) takes into account the situation where a person is refused a permanent visa on initial application, but this decision is later overturned on review. In this case, the 104 week period is taken to have begun on the day on which the initial decision-maker decided not to grant the visa to the person.

Comment - the status of New Zealand citizens

It should be noted that these provisions treat New Zealand citizens differentially to other migrants. The reason for this is that, unlike other persons who require permanent visas to stay in Australia permanently, most New Zealand citizens do not need a visa to travel to Australia. Rather, they are granted a 'special category visa' upon their arrival in Australia, which allows them to stay in Australia indefinitely (as long as they remain a New Zealand citizen) and affords them the rights available to persons with permanent visas.

As the 'special category visa' is given to all those New Zealand citizens eligible for it, irrespective of their intended length of stay, Governments consider that other mechanisms have been required in order to ensure that the benefits to which other permanent residents are entitled are given only to those New Zealand citizens who intend to settle in Australia permanently. Therefore, at present, New Zealand citizens are required to have been resident in Australia for at least 26 weeks before they are able to access AUSTUDY benefit. In relation to those New Zealand citizens who arrive in Australia and are given a special category visa after 1 January 1997, the Explanatory Memorandum to the Bill states that it is proposed to abolish the 26 week residency requirement, as they will be subject to the 104-week waiting period.(14)

Endnotes

  1. Portfolio Budget Statements 1996-97, Employment, Education Training and Youth Affairs Portfolio, p.119.
  2. House of Representatives Standing Committee on Employment, Education and Training, Student Financial Assistance, Canberra, AGPS, March 1991; Chapman, Bruce, and Smith, Damian, AUSTUDY: towards a more flexible approach: an options paper, Department of Employment, Education and Training, AGPS, 1992; and Senate Employment, Education and Training References Committee, Report of the Inquiry into AUSTUDY, Canberra, June 1996.
  3. Bob Birrell and Ian Dobson, 'High cost of abolishing student financial aid', The Australian, 1 July 1996.
  4. Birrell, Bob and Dobson, Ian, 'Austudy Dependence Amongst Students in Australia', (1994) People and Place, Vol 2, No.4, p.34.
  5. ibid, p.35.
  6. For example, 'Probe points to Austudy fraud', West Australian, 13 February 1995; Geoffrey Maslen, 'Free degrees', The Bulletin, 11 July 1995
  7. An 'eligible New Zealand citizen' is a New Zealand citizen who holds a special category visa, usually lives in Australia, and on their last entry into Australia, satisfied relevant health and public interest criteria.
  8. An 'innocent' illegal migrant is someone who is over the age of 18, ceased to hold a substantive visa (ie became an 'unlawful non-citizen') before he or she turned 18, and, the Minister for Immigration and Ethnic Affairs determines that the person had, before turning 18, spent the greater part of his or her 'formative years' in Australia. In addition, the applicant must not be a member of, nor live with, the family with whom they entered Australia. Finally, they must not have held a transit visa immediately before becoming an unlawful non-citizen.
  9. Minister for Employment, Education, Training and Youth Affairs, Senator The Hon Amanda Vanstone, 'Changes to student assistance based on genuine need', Press Release, V67/96, 20 August 1996. It should be noted that the 1997 AUSTUDY Policy Guidelines Manual (dated 10 October 1996) also cites the same single exemption; those persons who have held subclass 820 visas.
  10. Budget 96-Questions and Answers, at: http://www.deetya.gov.au/budget/qanda/q&a2.htm#7-1
  11. Department of Employment, Education, Training and Youth Affairs, 1997 AUSTUDY Policy Guidelines Manual, p. 6-70. It should be noted that where a student is applying for SHR on the basis of a change in their circumstances that has resulted in them becoming an orphan or a State Ward, or where their parents are no longer able to exercise their responsibilities.
  12. A 'prohibited relationship' for the purposes of section 23B of the Marriage Act 1961 are relationships between parents and children, grandparents and grandchildren, and between siblings. In all cases, adopted children and adoptive parents are treated as if they were biological parents and children.
  13. Submission by the Refugee Resettlement Working Group, Senate Legal and Constitutional Legislation Committee Report, Social Security Legislation Amendment (Newly Arrived Resident's Waiting Periods and Other Measures) Bill 1996, p.43.
  14. Explanatory Memorandum, Student and Youth Assistance Amendment (Waiting Period) Bill 1996, pp.4-5.

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26 November 1996
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ISSN 1323-9031
© Commonwealth of Australia 1996

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Published by the Department of the Parliamentary Library, 1996.

This page was prepared by the Parliamentary Library, Commonwealth of Australia
Last updated: 22 November 1996

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