Bills Digest No. 189 1997-98 Student and Youth Assistance Amendment Bill 1998


Numerical Index | Alphabetical Index

WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

CONTENTS

Passage History
Purpose
Background
Main Provisions
Concluding Comments
Endnotes
Contact Officer & Copyright Details

Passage History

Date Introduced: 25 March 1998

House: House of Representatives

Portfolio: Schools, Vocational Education and Training

Commencement: Royal Assent, subject to provisos.

Purpose

To make a range of minor amendments to the loan scheme available to tertiary students known as the Austudy Supplement.

Background

The Austudy/Abstudy financial 'Supplement' was introduced on 1 January 1993. Legislative provisions relating to it are contained in Part 4A of the Student and Youth Assistance Act 1973 (the SYA Act).

The scheme was designed to give tertiary students an additional income support option, in addition to application for Austudy or Abstudy payment. The loan scheme involves students 'trading in' a certain amount of their Austudy payment in order to receive a greater amount of Austudy Supplement, in a $1 for $2 trade. In this way students have been able to increase their total payment income per fortnight.

This Bill makes a number of relatively minor fine-tunings of the scheme, and involves no major departures from the overall policy position already set within Part 4A of the SYA Act.

 The government has indicated that the precise detail of this Bill will depend to some extent on the passage of the Social Security Amendment (Youth Allowance) Bill 1997:

The measures in the Student and Youth Assistance Amendment Bill apply to Austudy and Abstudy beneficiaries who either have a Financial Supplement loan or who are eligible to obtain one. Subject to the passage of the Youth Allowance legislation, the Government will move appropriate amendments to the Bill to reflect the impending repeal of the Austudy scheme.(1)

Main Provisions

The amendments to be made by this Bill are contained in a single Schedule containing 25 items.

Commencement

Clause 2 provides the details of the commencement of the proposed Act. The general principle is that the Act is to commence upon Royal Assent. However Items 19 and 20 are to be taken to have commenced by 1 July 1998 if the Act does not receive Assent by that date. In addition Item 7 relating to the cooling off period is to commence on 1 January 1999.

Schedule 1

Schedule 1 makes amendments to the Student and Youth Assistance Act 1973. Clause 3 of the Bill indicates that the schedule amends that Act and other Acts where necessary. Other legislation that the Bill touches upon includes the Higher Education Funding Act 1988 and the Bankruptcy Act 1966.

Clarification and refinement amendments

Item 2 repeals subsection 7(8) of the Act and inserts new subsections 7(8) to 7(14) in order to qualify the existing section, in order to prevent misuse of section 7(8) by persons seeking to avoid conviction in the event of their having fraudulently obtained Austudy benefits by making a repayment of the benefits.

Item 3 aims to correct a misleading reference in the section 12A of the Act relating to the discounting of the loan debt available where a student makes early repayments. At present the reference to a 15% discount is potentially misleading as the discount applied in practice is an amount of money, not a percentage.

Item 4 aims to remove another misleading expression, found in section 12C of the Act. This is the phrase " , or apart from this Part would qualify," in subparagraph 12C(1)(b)(I) which suggests that Part 4A might prevent students from qualifying for Austudy or Abstudy.

Item 5 amends section 12F(1)(a) of the Act in order to make a minor amendment to bring the legislation into accordance with administrative practice. The effect will be to require the Secretary to determine whether an applicant for Austudy or Abstudy is eligible for the Supplement.

Item 6 amends section 12G of the Act to remove drafting which does not reflect the policy intention that a student may apply for the Supplement only while an 'eligible student', unless prevented from applying by circumstances beyond his or her control.

Cooling off period

Item 7 inserts proposed sections 12KA and 12KB into the Act. The sections will introduce a 14 day 'cooling off' period for applications for the Supplement. This will enable students to reconsider their application for the Supplement and to, if they wish, withdraw their application without penalty.

The proposed section 12KB allows for a student who wishes to receive Supplement payments sooner to elect to waive his or her right to withdraw an application.

Cessation of Supplement payments in certain circumstances

Item 8 sets out a new section to replace the existing explanatory section, being section 12P. Division 4 of Part 4A already allows for the cessation of Supplement payments in certain circumstances.

However the proposed item 9 will insert new sections 12QA, 12QB and 12QC, in order to provide for the situations where:

  • a person is found to be eligible only for a reduced maximum amount of supplement and has already been paid that total amount; or
  • a student fails to notify the Secretary, as required, of relevant changes in circumstances within the prescribed period and thereby is overpaid; or
  • a student provides false or misleading information and thereby is overpaid.

Correction of provisions relating to discount for early repayments

Items 15,16,17,18 relate to certain proposed corrections of provisions relating to the precise amount of discount available for early repayments of the Supplement during the contract period under section 12ZA. Items 15 and 16 amend section 12ZA(7) of the Act which provides for calculation of the discount available.

The amendments contained within item 17 are designed to bring the SYA Act in line with the policy intention that if a person repays a Supplement debt in full during the contract period, she or he should be entitled to the same 15% discount regardless of whether payments are made in instalments or in one lump sum. At present the drafting of the formulas within section 12ZA are such that the discount provided is unlikely to precisely equal fifteen percent.

Repayment of Supplement through the tax system

Division 6 of the SYA Act provides for the repayment of Supplement payments through the tax system, in much the same manner as Higher Education Contribution Scheme (HECS) repayments.

Item 19 amends section 12ZK of the Act which relates to compulsory repayments in respect of accumulated Supplement debt.

According to the Second Reading speech delivered by Dr Kemp, these provisions:

bring up the arrangements for the compulsory repayment of financial supplement debts up to date by inserting the minimum, intermediate and maximum prescribed amounts for the year ending 30 June 1998 and formulae to determine these amounts for later years.(2)

Further, the proposed amendments in item 19 are designed to remove any possible inconsistency existing between the indexation procedure applied to HECS and Supplement (FS) debts.

Concluding Comments

The amendments relating to cessation of loan payments, repayment of debts, and discounts for early repayment are minor amendments. They largely mirror the arrangements presently existing in the HECS scheme.

The proposed 14 day cooling off period is likely to be beneficial for students. It will provide students with a wider range of options in decision making.

Endnotes

  1. Second Reading Speech, as provided by the Department, 2.
  2. Dr Kemp, Second Reading Speech, Hansard, 25 March 1998, 1039.

Contact Officer and Copyright Details

James Prest
7 May 1998
Bills Digest Service
Information and Research Services

This paper has been prepared for general distribution to Senators and Members of the Australian Parliament. While great care is taken to ensure that the paper is accurate and balanced, the paper is written using information publicly available at the time of production. The views expressed are those of the author and should not be attributed to the Information and Research Services (IRS). Advice on legislation or legal policy issues contained in this paper is provided for use in parliamentary debate and for related parliamentary purposes. This paper is not professional legal opinion. Readers are reminded that the paper is not an official parliamentary or Australian government document.

IRS staff are available to discuss the paper's contents with Senators and Members
and their staff but not with members of the public.

ISSN 1328-8091
© Commonwealth of Australia 1998

Except to the extent of the uses permitted under the Copyright Act 1968, no part of this publication may be reproduced or transmitted in any form or by any means, including information storage and retrieval systems, without the prior written consent of the Parliamentary Library, other than by Members of the Australian Parliament in the course of their official duties.

Published by the Department of the Parliamentary Library, 1998.



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