Bills Digest no. 4 2007–08
Social Security Legislation Amendment (2007 Budget
Measures for Students) Bill 2007
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
Financial implications
Main Provisions
Conclusion
Endnotes
Contact Officer & Copyright Details
Passage History
Social Security Legislation
Amendment (2007 Budget Measures for Students) Bill
2007
Date
introduced: 21 June
2007
House: House of Representatives
Portfolio: Education, Science and
Training
Commencement:
Schedule 2, Item
12 from immediately after the commencement of
Schedule 3 of the Families, Community Services
and Indigenous Affairs Legislation Amendment (Further 2007 Budget
Measures) Bill 2007, which is scheduled to commence from 1
January 2008. All other items from the date the Bill receives Royal
Assent.
Links:
The
relevant links to the Bill, Explanatory Memorandum and second
reading speech can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/.
When Bills have been passed they can be found at ComLaw, which is
at http://www.comlaw.gov.au/.
To provide the legislative
support for several government assistance measures for students
announced in the 2007-08 Budget. These measures feature allowing
Austudy payment recipients access to rent assistance and also
allowing student income support payments to be provided when the
course being studied is a Masters course.
The vast majority of regular income support and supplement
payments made by government to individuals are made by way of a
direct deposit into the recipient s account via an electronic
transfer of funds. The amendments to the Student Assistance Act
1973 (SAA) presented in Schedule 1 of the
Bill are to provide for the recovery of amounts incorrectly paid to
a financial institution. Some of the most common reasons for
incorrect payments arise from payment recipients providing the
incorrect account details or recipients changing their account and
the funds being sent to the out of date account.
The amendments will introduce provisions that are already
existent in the Social Security Act 1991 (SSA) and the
Veterans Entitlements Act 1986 (VEA) to recover amounts
incorrectly credited from financial institutions.
The amendments to the SSA presented in Schedule
2 are to essentially modify the qualification requirements
for youth allowance and Austudy payment to allow payment to a full
time student undertaking a Masters course. This initiative was
announced in the 2007-08 Budget.[1]
The provisions in Schedule 2 also extend access
to rent assistance to Austudy payment recipients. This initiative
was also announced in the 2007-08 Budget.[2]
The Financial Impact Statement in the Explanatory Memorandum
details that the cost of expanding access to youth allowance and
Austudy payment to Masters students is estimated to be $5.5 million
in 2007-08, $11.2 million in 2008-09, $12.5 million in 2009-10 and
$14.1 million in 2010-2011.[3]
The Financial Impact Statement in the Explanatory Memorandum
details that the cost of expanding access to rent assistance to
Austudy payment recipients is estimated to be $13.2 million in
2007-08, $24.0 million in 2008-09, $24.5 million in 2009-10 and
$25.1 million in 2010-2011.[4]
The government has said the purpose of extending access to youth
allowance and Austudy payment for Masters students is:
This measure ensures that low income students have
the financial assistance they require to complete a Masters degree
to obtain entry to a profession. It will assist students to acquire
the skills and training they need for careers which will, in turn,
make a significant contribution to the Australian economy. There is
an increasing trend to higher qualifications for professional
entry. It will also enhance Australia s international
competitiveness. It ensures that low income students have the
financial assistance they require to complete a professional
qualification requiring a Masters degree.
This Australian Government Budget initiative will
extend Youth Allowance and Austudy to students enrolled in an
approved Masters by course-work programme, which is required for
entry to a profession, or is the fastest pathway to professional
entry. This provision will also extend to students enrolled in a
Masters course-work programme where a university has diversified by
restructuring its course delivery.[5]
The government has said the purpose of extending access to rent
assistance to Austudy payment recipients is it:
will bring Austudy recipients into line with other
income support recipients, such as those receiving Youth Allowance
and Newstart. In a tightening rental market, accommodation costs
can discourage people from moving to centres where there are
greater education and training opportunities. This measure will
assist students from low income backgrounds, and those from rural
and regional areas, to overcome that barrier to acquiring much
needed skills.[6]
Youth allowance and Austudy payment for full time students were
introduced by the government in 1998 with their then
rationalisation of income support arrangements for students and
young people.[7]
Youth allowance and Austudy payment replaced several preceding
payments for students being:
- Youth training allowance (YTA), newstart allowance, and
sickness allowance for 16 to 20 year olds and most 15 year
olds,
- AUSTUDY Scheme payments for students aged 16-24 inclusive, and
older if the student commences a course prior to turning 25 years,
and 15 year olds receiving Austudy, and
- More than minimum Family Payment for secondary students aged
16-18 not receiving AUSTUDY Scheme payments.
One of the main changes with the 1998 rationalisation was the
scrapping of the old AUSTUDY Scheme. This program provided income
support under the SAA to virtually anyone who was a full time
student. There was then no limit on the amount or type of study
undertaken. Thus tertiary students undertaking their second, third
or fourth degree or doing a Masters or a PhD study could qualify
for payment from the AUSTUDY Scheme, so long as they were a full
time student. With the introduction of the Austudy payment in 1998,
this changed. Austudy payment is currently only paid for the first
undergraduate degree and there are study progress requirements.
There is basically no fetter on an educational institution as to
what it chooses to call a course. Generally Masters courses
describe post graduate study but in some cases the masters
component of a course could be a later part of a four year
undergraduate degree course. Also, as referred to in the Minister s
press release announcing the initiative in the 2007-08 Budget,
there is an increasing trend to higher qualifications for
professional entry.[8] For some professions, the acquiring of an undergraduate
degree is not sufficient to be recognised and registered to
practice.
Currently, rent assistance is not payable in addition to Austudy
payment. This is largely a carryover from the preceding AUSTUDY
Scheme, which also did not provide access to rent assistance. One
of the selling points for the rationalisation of the student
assistance arrangements introduced in 1998 and the provision of the
then new youth allowance to many young full time students was that
they were going to be able access rent assistance.[9] The government has said in the
past about the non payment of rent assistance to Austudy recipients
that:
Austudy recipients
have never been entitled to rent assistance. Austudy is the only income
support payment that does not attract rent assistance. While Austudy
recipients cannot get rent assistance,
the Government has included a generous personal income free area of
$236 per fortnight using any credit accumulated to offset high
income in other fortnights. This enables full time students on
Austudy to continue to be engaged in
the workforce and keep most of the money they earn from casual or
part time employment. There is also a higher rate of Austudy for long-term income support
recipients commencing full-time study or a New
Apprenticeship.[10]
The non payment of rent assistance to Austudy recipients has
been a long standing issue of concern. This was manifest in the
fact that the Senate Employment, Workplace Relations and Education
References Committee s 2005 inquiry into student income support had
as one of its terms of reference an examination of the
ineligibility of Austudy payment recipients to rent assistance. The
Committee did recommend that rent assistance be provided to Austudy
payment recipients.
Recommendation 9
The committee recommends that Rent Assistance be
made available for all recipients of Austudy, but not before a
costing is undertaken by the Department of Education, Science and
Training. The committee recommends that the costing be completed
before the end of 2005 and reported to the Parliament.[11]
See the details of the cost implications in the Background
above.
Item 2 inserts a new section 42A in the SAA to
provide for the recovery of amounts of Abstudy and Assistance for
Isolated Children (AIC) from financial institutions. These are the
two financial assistance payments paid direct to individuals under
the SAA. The other student assistance payments, being youth
allowance and Austudy payment, are provided under the SSA and this
Act already has these payment recovery provisions.
Item 2 removes the word Master from subsection
569(2) of the SSA, which otherwise lists classes of persons who do
not satisfy the activity test for Austudy payment. This will enable
persons undertaking Masters study to potentially qualify for
Austudy payment.
Items 13 to 16 inserts provisions into the
Austudy rate calculation provisions to include amounts of rent
assistance.
Item 18 inserts provisions to apply the rent
assistance parts of the Austudy rate calculator provisions from 1
January 2008.
Conclusion
The amendments to the SSA to potentially provide for the payment
of rent assistance to Austudy recipients and also to allow payment
of student income support payments (youth allowance and Austudy
payment) to persons doing a Masters course are beneficial. The
provision of rent assistance to Austudy payment recipients
addresses a long standing criticism of the government s income
support arrangements for students.
Endnotes
[1]. Department of Treasury, Budget Paper No. 2 - Budget
Measures 2007-08, Realising Our Potential extending income
support to masters students, Canberra, 8 May 2007, p. 119.
http://www.aph.gov.au/budget/2007-08/bp2/html/index.htm
[2]. Department of Treasury, Budget Paper No. 2 - Budget
Measures 2007-08, Realising Our Potential extending rent
assistance to Austudy recipients, Canberra, 8 May 2007, p.
118. http://www.aph.gov.au/budget/2007-08/bp2/html/index.htm
[3]. Financial Impact Statement, Explanatory Memorandum.
[4]. Financial Impact Statement, Explanatory Memorandum.
[5]. The Hon. Julie Bishop, MP, Minister for Education,
Science and Training, Extension of allowances for professional
Masters studies, media release, Canberra, Australia, 8 May
2007. http://www.dest.gov.au/ministers/bishop/budget07/bud08_07.htm
[6]. The Hon. Julie Bishop, MP, Minister for Education,
Science and Training, Rent assistance for mature age
students, media release, Canberra, Australia, 8 May 2007.
http://www.dest.gov.au/ministers/bishop/budget07/bud07_07.htm
[7]. James Prest, Peter Yeend and Susan McDonald, Social
Security Legislation Amendment (Youth Allowance) Bill 1997,
Bills Digest No. 76 1997-98, Parliamentary Library,
Canberra, Australia, 29 October 1997. http://www.aph.gov.au/library/pubs/bd/1997-98/98bd076.htm
James Prest and Peter Yeend, Social
Security Legislation Amendment (Youth Allowance Consequential and
Related Measures) Bill 1998, Bills Digest No. 156 1997-98,
Parliamentary Library, Canberra, Australia, 12 March 1998.
http://www.aph.gov.au/library/pubs/bd/1997-98/98bd156.htm#Contact
[8]. The Hon. Julie Bishop, MP, Minister for Education,
Science and Training, Extension of allowances for professional
Masters studies, op. cit.
[9]. James Prest, Peter Yeend and Susan McDonald, Social
Security Legislation Amendment (Youth Allowance) Bill 1997,
Bills Digest No. 76 1997-98, op. cit.
James Prest and Peter Yeend, Social
Security Legislation Amendment (Youth Allowance Consequential and
Related Measures) Bill 1998, Bills Digest No. 156 1997-98,
op. cit.
[10]. The Hon. Mal Brough, MP, Minister for Families,
Community Services and Indigenous Affairs, Answer to question on
notice No. 3186, question asked by Mr Steve Georganas, MP, on 27
March 2006, House of Representatives, Hansard, 11 May
2006, p. 179.
[11]. Employment, Workplace Relations and Education
References Committee, Student income support, Canberra,
Australia, June 2005, p. v.
http://www.aph.gov.au/Senate/committee/eet_ctte/studentincome04/report/index.htm
Peter Yeend
26 July 2007
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