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Date Introduced: 25 March 1998
House: House of Representatives
Portfolio: Schools, Vocational Education and Training
Commencement: Royal Assent, subject to
To make a range of minor amendments to the loan
scheme available to tertiary students known as the Austudy
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
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
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)
The amendments to be made by this Bill are
contained in a single Schedule containing 25 items.
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 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
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
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;
- 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
Correction of provisions relating to discount for early
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
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.
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.
- Second Reading Speech, as provided by the Department,
- Dr Kemp, Second Reading Speech, Hansard, 25 March
7 May 1998
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