Bills Digest no. 37, 2017–18
PDF version [669KB]
Michael Klapdor
Social Policy Section
3 October 2017
Contents
Purpose of the Bill
Background
Relocation scholarship
Table 1: relocation scholarship rates
Education Entry Payment
Eligibility requirements
Number of recipients
Table 2: Education Entry Payment
recipients by main payment, 2016–17 financial year to September 2016
Previous attempts to abolish the Education
Entry Payment failed
Pensioner Education Supplement
Rate
Eligibility requirements
Number of recipients by payment type
Table 3: Pensioner Education
Supplement recipients by qualifying payment, September 2016
Attempts to abolish the Pensioner
Education Supplement
Committee consideration
Senate Community Affairs Legislation
Committee
Senate Standing Committee for the
Scrutiny of Bills
Policy position of non-government
parties/independents
Position of major interest groups
Australian Council of Social Service
National Social Security Rights
Network
Carers Australia
People with Disability Australia
Financial implications
Statement of Compatibility with Human
Rights
Parliamentary Joint Committee on
Human Rights
Key issues and provisions
Schedule 1—Relocation scholarship
payment
Numbers affected
Key provisions
Schedule 2—Education entry payment
Numbers affected
Key provisions
Table 4: Study loads corresponding to
PES and EdEP rates
Schedule 3—Pensioner education
supplement
Numbers affected
Key provisions
Table 5: study loads corresponding to
PES rates
Date introduced: 21 June 2017
House: House of Representatives
Portfolio: Social Services
Commencement: 1 January 2018 or, if the Act receives Royal Assent on or after 1 January 2018, on the first 1 January or 1 July to occur after Royal Assent.
Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.
When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the Federal Register of Legislation website.
All hyperlinks in this Bills Digest are correct as at October 2017.
Purpose of
the Bill
The purpose of the Social Services Legislation Amendment
(Better Targeting Student Payments) Bill 2017 (the Bill) is to amend the Social Security Act
1991 (SS Act) and the Veterans’
Entitlements Act 1986 (VE Act) to:
- limit
eligibility for the relocation scholarship provided to some Youth Allowance
recipients to those whose parental family home or usual place of residence is
in Australia, and to those who relocate for study in Australia only. Students
who relocate outside Australia to undertake part of their Australian course
will no longer qualify for the relocation scholarship
- introduce
new payment rates for the Pensioner Education Supplement (PES) and the
Education Entry Payment (EdEP) that correspond with different study loads
undertaken by recipients and
- no
longer pay the PES during semester breaks and end-of-year holidays.
The measures were announced in the 2017–18 Budget and are
expected to commence on 1 January 2018.[1]
The changes to relocation scholarship eligibility are
expected to provide savings of $1.9 million over five years.[2]
The changes to EdEP and PES rates will provide combined savings of $94.7
million over five years.[3]
Background
Relocation
scholarship
The relocation scholarship was introduced from April 2010
together with a separate scholarship, the student start-up scholarship.[4]
The scholarships were supplementary amounts provided to eligible recipients of
student assistance payments (such as Youth Allowance, ABSTUDY or Austudy).
These two scholarships replaced the Commonwealth Education Costs Scholarship,
the Commonwealth Accommodation Scholarship and the National Accommodation
Scholarship.[5]
A much larger group of students on income support were eligible for the new
scholarships but the overall value of the relocation scholarship combined with
the start-up scholarship was less than the previous Commonwealth Accommodation
Scholarship over the duration of the student’s course.[6]
The introduction of the student start-up and relocation
scholarships by the Rudd Government was based on a recommendation of the 2008 Review
of Australian Higher Education chaired by Denise Bradley (the Bradley
Review). The Bradley Review recommended that the Government continue and
enhance the Commonwealth Scholarships program by ‘providing benefits to all
eligible students on Austudy or Youth Allowance for education costs and
accommodation costs (for those who need to leave home) and by transferring
responsibility for the payment of benefits to Centrelink’ (rather than
scholarships being allocated to universities to administer).[7]
The relocation scholarship is payable to students studying
an approved scholarship course receiving student income support who are
considered dependent and judged to have to live away from home for study, as well
as independent students disadvantaged by personal circumstances.[8]
Vocational education and training courses at higher education institutions are
not considered approved scholarship courses.[9]
When first introduced, any dependent student who needed to
live away from home for study could be eligible for the relocation scholarship.
From 2015, students relocating between or within major cities for study were no
longer eligible for a relocation scholarship.[10]
When first introduced, the rate of the relocation scholarship
was $4,000 for the first year of study and $1,000 for the second and subsequent
years of study. From 2012, different rates were introduced for major city and
regional students’ second and third years of study (based on where they were
relocating from). In 2012, the rate for the first year of study for all
students was reduced to its 2010 rate (the scholarship is normally indexed to
movements in the Consumer Price Index once a year on 1 January). The historical
rates of the scholarship are set out in Table 1.
Table 1: relocation
scholarship rates
| Date |
First year of study |
Second year of study |
Third year of study |
Fourth year of study |
| All students |
Major cities |
Regional |
Major Cities |
Regional |
All students |
| 2010 |
$4,000 |
$1,000 |
$1,000 |
$1,000 |
$1,000 |
$1,000 |
| 2011 |
$4,124 |
$1,031 |
$1,031 |
$1,031 |
$1,031 |
$1,031 |
| 2012 |
$4,000 |
$1,000 |
$2,000 |
$1,000 |
$2,000 |
$1,000 |
| 2013 |
$4,048 |
$1,012 |
$2,024 |
$1,012 |
$2,024 |
$1,012 |
| 2014 |
$4,145 |
$1,036 |
$2,073 |
$1,036 |
$2,073 |
$1,036 |
| 2015 |
$4,269 |
$1,067 |
$2,135 |
$1,067 |
$2,135 |
$1,067 |
| 2016 |
$4,333 |
$1,083 |
$2,167 |
$1,083 |
$2,167 |
$1,083 |
| 2017 |
$4,376 |
$1,094 |
$2,189 |
$1,094 |
$2,189 |
$1,094 |
Source: DSS, ‘5.2.6.120
Relocation scholarship historical rates’, Guide to social security law,
version 1.234, DSS website, 3 July 2017.
The student start-up scholarship, introduced at the same
time as the relocation scholarship, was converted into an income-contingent
loan program (the student start-up loan) from 1 January 2016.[11]
Education
Entry Payment
The EdEP is paid to eligible income support recipients to
assist with the up-front costs of study.[12]
It is a taxable lump sum payment, worth $208, paid once a year.[13]
The EdEP was introduced from 1 January 1992, initially for
recipients of the Sole Parent Pension (now known as Parenting Payment Single).[14]
Access to the EdEP was gradually expanded to other payments: to Disability
Support Pension and Widow B Pension in 1993,[15]
to Newstart Allowance in 1994,[16]
and to Carer Payment,[17]
Widow Allowance, Wife Pension, Parenting Allowance (now known as Parenting
Payment Partnered) and Partner Allowance in 1995,[18]
with a view to encouraging these payment recipients to participate in education
and study.
Eligibility
requirements
Currently, a person may be eligible for the EdEP if they:
- are
receiving Newstart Allowance, Parenting Payment Partnered, Partner Allowance or
Widow Allowance and have received payment continuously for at least 12 months
- have
started or will start an approved education course and
- have
not received an EdEp in the last 12 months.
A person may also be eligible for the EdEP if they are
receiving Carer Payment, Disability Support Pension, Parenting Payment Single,
Special Benefit (in some cases), Widow B Pension or Wife Pension and they:
- are
eligible to receive the PES (see next section) and
- have
not already received an EdEP in the current calendar year.[19]
In all cases, the person must be studying an approved
course in Australia.
Recipients of some veterans’ payments may also be eligible
for the EdEP. Invalidity Service Pension, Partner Service Pension and Income
Support Supplement recipients may be eligible for the EdEP if they are below
the veterans’ pension age, are enrolled in either a full-time or part-time
course of study that is the subject of a determination under section 5D of the Student
Assistance Act 1973, have not received an EdEP in the current calendar year
and are qualified to receive the social security PES.[20]
Number of
recipients
In the 2015–16 financial year there were 68,967 recipients
of the EdEP.
Table 3 shows the number of EdEP recipients by qualifying
payment in the financial year 2016–17 to September 2016. As the EdEP is
only paid once a year, generally around the time study commences, the table is
useful only as an indication of which payments are the main recipients of the
EdEP.
Table 2:
Education Entry Payment recipients by main payment, 2016–17 financial year to September
2016
| Main payment |
Number of recipients |
| Age Pension |
<5 |
| Austudy |
131 |
| Carer Payment |
826 |
| Disability Support Pension |
2,986 |
| Newstart Allowance |
2,762 |
| Parenting Payment Partnered |
119 |
| Parenting Payment Single |
4,805 |
| Special Benefit |
<5 |
| Widow Allowance |
5 |
| Wife Pension (DSP) |
<5 |
| Youth Allowance (Other) |
<5 |
| Youth Allowance (Student) |
21 |
| Other |
0 |
| Total |
11,662 |
Source: Senate Community Affairs Committee, Answers to
Questions on Notice, Social Services Portfolio, Additional Estimates 2016–17, Question
SQ17-000041.
Previous attempts
to abolish the Education Entry Payment failed
The Abbott Government announced in the 2014–15 Budget that
it would abolish the Education Entry Payment and the PES.[21]
Five different Bills were introduced to the Parliament
with proposals to abolish the two payments before the Government announced in
the 2017–18 Budget that it would no longer proceed with the measures:[22]
Pensioner
Education Supplement
The PES was introduced on 1 January 1987, together the
introduction of the new AUSTUDY Scheme for students.[28]
The introduction of the AUSTUDY Scheme saw a rationalisation of financial
assistance for students—in particular, a restriction on students receiving
either a social security pension or allowance at the same time as a range of
student income supplement payments (such as the Tertiary Education Assistance
Scheme). The PES was largely intended as a make-up payment for those students
in receipt of a pension who would otherwise have had their overall payments
reduced.[29]
It has continued as a supplementary payment for pensioners undertaking approved
study.
Rate
The current rate of the PES is:
- $31.20
per fortnight for those with a study-load of less than 50 per cent of the
normal full-time study load (unless the person is receiving Disability Support
Pension, Invalidity Service Pension, War Widow/er Pension with a dependent
child or, an allowance payment and has a partial capacity to work)
- $62.40
per fortnight for all other students.[30]
Eligibility
requirements
To be eligible for the PES, a person must meet residency
requirements, be at least 16 years of age or be considered independent and be
in receipt of a qualifying payment:
- Carer
Payment
- Disability
Support Pension
- Parenting
Payment Single
- Parenting
Payment Partnered (in limited circumstances)
- Widow
B Pension
- Widow
Allowance
- Wife
Pension (where the partner receives Disability Support Pension)
- Newstart
Allowance and Youth Allowance where the person has transferred from Parenting
Payment Single or Disability Support Pension (in certain circumstances)
- Newstart
Allowance where the recipient is a single principal carer
- Special
Benefit where the recipient is a single parent
- Invalidity
Service Pension
- Partner
Service Pension (where the recipient’s partner receives Invalidity Service
Pension) and
- War
Widow/er’s Pension or Defence Widow/er’s Pension if the recipient has a
dependent child.[31]
The person must also be undertaking qualifying study.
Qualifying study means that a person is enrolled in a course or is a continuing
student intending to enrol in a course, the course is an approved course of
education or study, the recipient is a full-time student or concessional
study-load student and the person’s progress is considered satisfactory.[32]
Approved courses are determined by the Minister for Social
Services in the Student
Assistance (Education Institutions and Courses) Determination 2009 (No. 2)
and include secondary and tertiary courses.
Full-time study is defined as at least 75 per cent of the
normal amount of full-time study required for the course of education or study.[33]
For tertiary students, this would be the full-time study load required under
the administration guidelines for the Higher Education Support Act 2003,
the amount defined by the institution, an amount equivalent to the average
amount of full-time study required to complete the course in the minimum time,
or, a minimum of 20 contact hours a week.[34]
A concessional study-load student is a person undertaking
at least 66 per cent or 25 per cent of the normal amount of full-time study for
their particular course of education or study.[35]
Only single parents, carers or students with a substantial disability may
qualify for PES at the 25 per cent part-time study load.[36]
The 66 per cent study-load concession generally only applies to
non-school students. For tertiary students studying a Higher Education
Contribution Scheme (HECS), the HECS load would be 0.33 or more each semester.
For non-HECS courses and other secondary courses, the percentage is 66 per cent
or more of the study-load normally required by the institution for a full-time
student.[37]
Number of
recipients by payment type
Table 3 shows the number of PES recipients by qualifying
payment as at September 2016.
Table 3:
Pensioner Education Supplement recipients by qualifying payment, September 2016
| Main payment |
Number of recipients |
| Age Pension |
<5 |
| Austudy |
0 |
| Carer Payment |
3,336 |
| Disability Support Pension |
15,430 |
| Newstart Allowance |
2,619 |
| Parenting Payment Partnered |
<5 |
| Parenting Payment Single |
16,276 |
| Widow Allowance |
33 |
| Wife Pension (DSP) |
8 |
| Other |
Not for publication |
| Total |
37,717 |
Source: Senate Community Affairs Committee, Answers to
Questions on Notice, Social Services Portfolio, Additional Estimates 2016–17, Question
SQ17-000041.
Attempts to
abolish the Pensioner Education Supplement
See section on attempts to abolish the EdEP above.
Committee
consideration
Senate
Community Affairs Legislation Committee
The Bill was referred to the Senate Community Affairs
Legislation Committee for inquiry and report by 7 September 2017.[38]
The committee published its report on 1 September 2017 making one
recommendation: that the Bill be passed.[39]
The Committee acknowledged the impact of the changes on
some students ‘however notes that since the introduction of these payments
individuals wishing to undertake study have access to more targeted support,
such as HECS-HELP, FEE-HELP and VET FEE-HELP tuition loan programs’.[40]
Australian Labor Party (ALP) senators issued a dissenting
report and rejected the recommendation of the majority report. ALP senators
welcomed the Government’s decision to no longer abolish the EdEP and PES
entirely but stated that ‘there is still significant concern regarding the
impact of these cuts on income support recipients who are undertaking study,
who are predominantly women and people with disability’.[41]
The Australian Greens also issued a dissenting report
recommending that the Bill not be passed. The Australian Greens stated that the
Bill, if passed, ‘will place added financial pressure on income support
recipients who are studying and render it more difficult for them to continue
their studies and find work in the future’.[42]
Senate
Standing Committee for the Scrutiny of Bills
The Senate Standing Committee for the Scrutiny of Bills
had no comment on the Bill.[43]
Policy
position of non-government parties/independents
Shadow Minister for Families and Social Services Jenny
Macklin described the measures in the Bill, together with other budget
measures, as ‘nasty cuts’.[44]
As discussed above, Australian Labor Party senators recommended the Bill be
opposed by the Senate in their dissenting report to the Senate Community
Affairs Committee’s majority report on the Bill.[45]
The Australian Greens also recommended the Bill not be passed
in their dissenting report.[46]
It is unclear what the position of other non-government
parties and independents is on the Bill.
Position of
major interest groups
Australian
Council of Social Service
The Australian Council of Social Service (ACOSS) is opposed
to the relocation scholarship changes, stating ‘there appears to be no clear
policy rationale behind the tightening eligibility’ and ‘ACOSS’ view is that
social security payments should be paid on the basis of financial need and not
guided by arbitrary conditions’.[47]
ACOSS is also opposed to the changes affecting the PES and EdEP stating that
‘costs of study are unlikely to be less with 50%+ study load’ and ‘costs of
commencing study remain the same regardless of study load, and therefore there
is no rationale for having a tiered rate of EEP [EdEP]’.[48]
ACOSS also suggested that the changes to PES and EdEP
rates ran counter to the Government’s ‘Investment Approach’ to welfare which is
aimed at early interventions to prevent long-term income support receipt:[49]
These education payments provide much needed assistance that
improves people’s prospects. It is counterintuitive to develop an Investment
Approach policy to improve support to people seeking to improve their
employment prospects, and at the same time cut assistance that actually helps
people on low incomes get meaningful and sustainable employment.[50]
National
Social Security Rights Network
The National Social Security Rights Network (NSSRN) is
opposed to each of the measures in the Bill.
In regards to the relocation scholarship eligibility
changes, the NSSRN stated:
Relocation scholarships should be generally available to all
low income students who move away from home to study, regardless of the
location of the family home or where the student chooses to study. This is
consistent with the original intention of the payment and provides support on
an equitable basis. The scholarship should respond to the need for support with
the costs of moving away from home without additional restrictions.[51]
In regard to the changes to EdEP rates, the NSSRN stated
‘at $208 per year this payment is unlikely to meet all the additional costs of
study for many students, regardless of study load. Put another way, proposing a
tiered rate structure for a payment based on study load might make some sense
if many people were being overcompensated’.[52]
The NSSRN also suggested the PES rate structure was not
properly aligned with actual costs faced by different students:
Any rate structure is a compromise, as it only has an
approximate fit with the costs faced by different students. However, our view
is that the current rate structure strikes a better balance than this proposal,
especially in how it acknowledges the challenges facing students with
disability.[53]
Carers
Australia
Carers Australian is opposed to the changes to the PES and
EdEP, stating: ‘reducing the amount of EEP and PES payments based on small
changes in course loads, and suspending payments during semester breaks and
holiday periods, as proposed in the Bill, will adversely affect the capacity of
carers to continue their studies’.[54]
People with
Disability Australia
People with Disability Australia (PWDA) is also opposed to
the changes to the PES and EdEP stating the change to payment rates ‘is deeply
unfair and will cause substantial financial pain to people in receipt of social
security payments who are studying’.[55]
PWDA stated in its submission to the Senate Community Affairs Committee inquiry
into the Bill:
If the Bill is passed those on the lowest incomes, including people
with disability, will be further pushed into poverty and financial hardship. It
will make it harder for people with disability to start or to continue
undertaking education. Plans to cut these payments are counter to the
Government’s focus on increasing employment opportunities through further
education. Whilst expectations for pensioners to undertake education increase,
the very means of supporting access to education for pensioners are being cut.[56]
Financial
implications
According to the Explanatory Memorandum, the changes to
the relocation scholarship eligibility requirements will provide savings of
$1.9 million over five years.[57]
The changes to EdEP and PES rates will provide combined savings of $94.7
million over five years (neither the Explanatory Memorandum nor the budget
papers disaggregated the savings estimate for each payment).[58]
Statement of Compatibility with Human Rights
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the
Bill’s compatibility with the human rights and freedoms recognised or declared
in the international instruments listed in section 3 of that Act. The
Government considers that the Bill is compatible.[59]
Parliamentary
Joint Committee on Human Rights
The Parliamentary Joint Committee on Human Rights (PJCHR) questioned
whether the relocation scholarship measure in the Bill is a ‘permissible
limitation on the right to social security’.[60]
The PJCHR found that the statement of compatibility with human rights had
identified the purpose of the measure as ‘to simplify and streamline the
delivery’ of the relocation scholarship. However, the PJCHR stated:
... ‘simplifying’ and ‘streamlining’ do not constitute
legitimate objectives for the purposes of international human rights law and do
not acknowledge the extent of the payment reduction. Rather, a legitimate
objective must address a pressing or substantial concern, and not simply seek
an outcome regarded as desirable or convenient.[61]
The PJCHR sought the advice of the Minister for Social
Services which was provided on 25 August 2017.[62]
The PJCHR found that, based on the additional information provided by the
Minister, the measure was ‘likely to be compatible with the right to social
security’.[63]
However, the PJCHR noted that ‘information in support of the Minister’s
statement as to the financial barriers facing students whose parental home or
usual place of residence is overseas, or who study overseas, would have been of
assistance’ in assessing the measure.[64]
Key issues
and provisions
Schedule
1—Relocation scholarship payment
Schedule 1 will limit eligibility for the relocation
scholarship payment provided to some Youth Allowance recipients to those whose
parental family home or usual place of residence is in Australia, and to those
who relocate for study in Australia only. Students who relocate outside
Australia to undertake part of their Australian course will also no longer be
qualified for the relocation scholarship.
The Explanatory Memorandum to the Bill states that these
two groups of students currently qualify for the relocation scholarship as the
criteria used to assess remoteness (that is, whether a student is moving from
or to a major city or regional area) classifies anything not considered a
‘major city of Australia’ as regional or remote location and ‘this includes
locations outside of Australia’.[65]
The Explanatory Memorandum describes this as ‘a loophole in the current
legislation’.[66]
The measure will provide limited expenditure savings to
Government but will prevent payment of the relocation scholarship to students
whose parental home or usual place of residence is overseas, and those who move
overseas to undertake a component of their Australian course.
Numbers
affected
The Government estimates that fewer than 450 students each
year will not be eligible for the relocation scholarship as a result of the
changes: fewer than 300 students per year with parental homes outside of
Australia and fewer than 150 students studying outside of Australia.[67]
Key
provisions
Item 1 inserts proposed subsections 592K(7A),
(7B) and (7C) into the SS Act which
set out additional circumstances in which a person would be deemed ineligible
for the relocation scholarship.
Proposed subsection 592K(7A) would make a person
ineligible for the relocation scholarship where, on the day the person
commenced their course, the home of each parent was outside Australia. Where a
person had one parent living outside Australia and another parent in Australia,
they would not be precluded from the relocation scholarship under this
provision (but would need to meet the other eligibility requirements).
Proposed subsection 592K(7B) would make a person
ineligible for the relocation scholarship where they are considered independent
for Youth Allowance purposes and, on the day six months before the person
commences their course, their usual place of residence was outside Australia.
As independent young people are only eligible for Youth Allowance where they
are considered disadvantaged by personal circumstances, this would preclude
some disadvantaged young people who have recently returned from overseas for
whatever reason from receipt of the relocation scholarship.[68]
Proposed subsection 592K(7C) would make a person
ineligible for the relocation scholarship where their place of study is, at the
time of qualification, outside Australia. The location of their place of study
is worked out using principles in a legislative instrument provided for by
subsection 592K(8) (the Explanatory Memorandum refers to a non-existent
subsection 592J(8)).[69]
Schedule
2—Education entry payment
Schedule 2 introduces new payment rates for the EdEP, with
lower rates payable for those not undertaking full-time study. The new tiered rate
structure will be:
- $208
per annum (the current rate) for study loads between 76 per cent and 100 per
cent of a normal full-time study load
- $156
per annum for study loads between 51 per cent and 75 per cent of a normal
full-time study load
- $104
per annum for study loads between 26 per cent and 50 per cent of a normal
full-time study load
- $52
per annum for study loads of 25 per cent of a normal full-time study load.
The Government’s rationale for the changes is set out in
the Explanatory Memorandum:
The amendments made ... by Schedule 2 better target education
entry payment by tailoring the rate of payment to the study load undertaken by
the student. This is intended to better reflect the costs students incur as
part of their study. Students undertaking part-time study loads do not
generally incur the same study costs as those undertaking full-time study loads
and it is proposed the education entry payment rates reflect this.[70]
The Government has not provided evidence to show how the
new payment rates reflect the initial costs students face commencing different
study-loads. Given that the EdEP has been around the same rate since it was
first introduced in 1992 (it was increased from $200 to $208 in 2000 with the
introduction of the Goods and Services Tax), it is difficult to see how the rate
has any relation to the actual costs associated with commencing study.[71]
While the measure will provide savings for the Government,
it will lower the level of support available to those students receiving income
support who are unable to undertake full-time study. This will reduce the
incentive to undertake study (especially when combined with the similar changes
to the PES) for those without capacity to undertake full-time studies such as
people with disability and those with caring responsibilities.
Numbers
affected
The Government estimates that around 56,100 EdEP
recipients will be paid a lower rate.[72]
Key
provisions
Item 1 of Schedule 2 inserts proposed section 665AA
into the SS Act to define normal amount of full-time study
for the purposes of the EdEP paid to Parenting Payment Single recipients. A
normal amount of full-time study will be:
- for
a course of study which is within the meaning of the Higher Education
Support Act 2003 and which has Commonwealth supported students (as
defined in that Act) enrolled in the course–a full-time student load for that
course
- for
a course outside the meaning of the Higher Education Support Act 2003 or
which does not have Commonwealth supported students enrolled, and for which the
education institution defines an amount of full-time study that would be
typically undertaken by a full-time student–the amount defined by the
institution or
- for
any other course of study–an amount equivalent to the average amount of
full-time study person would have to undertake in order to complete the course
in the minimum amount of time needed to complete it.
Item 2 repeals and substitutes section 665B which
sets out the rate of EdEP to be paid to the recipient based on the fortnightly
rate of PES payable (as amended by Schedule 3 of the Bill). This will link rates
of PES and EdEP payable to those eligible for both supplementary payments based
on their study load. The equivalent rates are set out in Table 4.
Table 4:
Study loads corresponding to PES and EdEP rates
| Study load (% of full-time) |
PES rate (per fortnight) |
EdEP rate (annual) |
| 76–100% |
$62.40 |
$208 |
| 51–75% |
$46.80 |
$156 |
| 26–50% |
$31.20 |
$104 |
| 25% |
$15.60 |
$52 |
| Less than 25% |
$0 |
$0 |
The rate of EdEP is based on the
rate of PES payable for the first day of the current calendar year for which
the PES is payable.
Similar amendments to item 2 are
made to relevant sections providing for the rate of EdEP payable to other
pension payment recipients:
- item
3 amends the EdEP rate for Disability Support Pension (section 665F)
- item
4 amends the EdEP rate for Widow B Pension (section 665J)
- item
5 amends the EdEP rate for Special Benefit (section 665N) and
- item
12 amends the EdEP rate for Carer Payment (section 665ZFB).
Rates of EdEP for other qualifying payments are worked out
based on the percentage of the normal amount of full-time study (the percentage
is the relevant percentage) that the Secretary of the Department
of Social Services is satisfied that the person will be undertaking on the
first day of the calendar year the person undertakes study in that course.[73]
The rates of EdEP corresponding to study load for these payments are the same
as those set out in Table 4.
Amendments are made to the relevant sections providing for
the rate of EdEP payable to different payment types to require that the relevant
percentage be worked out and showing the corresponding payment rate:
- item
8 amends the EdEP rate for Newstart Allowance (section 665V)
- item
11 amends the EdEP rate for Widow Allowance (section 665ZD)
- item
14 amends the EdEP rate for Wife Pension (section 665ZM)
- item
17 amends the EdEP rate for Partner Allowance (section 665ZR) and
- item
20 amends the EdEP rate for Parenting Payment Partnered (section 665ZV).
Items 22–25 amend the VE Act to
make similar adjustments to the rate of EdEP paid to certain recipients of the
Partner Service Pension, Invalidity Service Pension or Income Support
Supplement.
Schedule 3—Pensioner
education supplement
Schedule 3 will introduce a new rate structure for the
PES, with lower rates payable for those not undertaking full-time study. The
Schedule will also prevent payment of the PES during semester breaks and
holiday periods.
The new rate structure will be:
- $62.40
per fortnight (the current rate) for study loads between 76 per cent and 100
per cent of a normal full-time study load
- $46.80
per fortnight for study loads between 51 per cent and 75 per cent of a normal
full-time study load
- $31.20
per fortnight (the current part-rate) for study loads between 26 per cent and
50 per cent of a normal full-time study load
- $15.60
per fortnight for study loads of 25 per cent of a normal full-time study load.
The proposed changes will also apply to the PES paid under
the ABSTUDY Scheme and the Assistance for Isolated Children Scheme.[74]
The Explanatory Memorandum to the Bill states that the
amendments will ‘better align rates of payment with the person’s actual study
load’.[75]
As with the EdEP changes, the Government has not provided
any evidence to demonstrate the different costs faced by students with
different study loads, nor how the proposed PES rates are related to those
costs.
The measures will provide savings to the Government but
will lower the level of support available to those students receiving income
support who are unable to undertake full-time study. The changes, combined with
the EdEP measures in Schedule 2, will reduce the incentive to undertake study
for those without capacity to undertake full-time studies such as people with
disability and those with caring responsibilities.
Numbers
affected
The Government estimates that around 31,000 full-rate PES
recipients and 1,200 part-rate recipients each year will be paid lower rates
under the changes to the rate structure.[76]
All PES recipients, approximately 39,700 people will no longer receive the PES
during semester breaks or holiday periods.[77]
Key
provisions
Item 1 repeals subsections 1061PB(3) to (5) of the SS
Act and inserts proposed subsections 1061PB(3) and (4). The current
subsections set out when a person is taken to have been undertaking qualifying
study for the purposes of the PES from 1 January, 1 July and until 31 December.
The subsections allow certain PES recipients, depending on their course of
study, to be considered as undertaking qualifying study for the whole calendar
year. The proposed subsections provide that an individual will not be not be
considered to be undertaking qualifying study on a day ‘if the day does not
fall within a study period’ or on a day ‘if the day falls within a period of
vacation that occurs during a study period’.
The term ‘study period’ is not clearly defined. The
proposed subsections give an example of ‘a semester’ but it is not entirely clear
how teaching breaks within a semester might be treated (although it appears
that they may be covered by proposed subsection 1061PB(4) and would therefore not
be considered to be a period where the person was undertaking qualifying study)
and how other types of study calendars would be accounted for. The NSSRN
suggested that the proposed provision would apply to holiday breaks during a
semester when students continued to undertake activities related to study:
including completing assignments and attending campus.[78]
It is also unclear how the Department of Human Services
will verify study periods—whether these will be provided by claimants or by
education institutions.
Item 2 repeals and substitutes section 1061PZG
which sets out the new rate schedule for PES. The rate is worked out by first
determining the person’s relevant percentage of the normal amount
of full-time study (as defined at section 1061PF). The person’s relevant
percentage corresponds to the payment rate set out in proposed subsection
1061PZG(4)—the relevant rates are set out in Table 5.
Table 5: study
loads corresponding to PES rates
| Study load (% of full-time) |
PES rate (per fortnight) |
| 76–100% |
$62.40 |
| 51–75% |
$46.80 |
| 26–50% |
$31.20 |
| 25% |
$15.60 |
| Less than 25% |
$0 |
[1]. Australian
Government, Budget
measures: budget paper no. 2: 2017–18, pp. 143–145.
[2]. Explanatory
Memorandum, Social Services Legislation Amendment (Better Targeting Student
Payments) Bill 2017, p. 1.
[3]. Ibid.,
p. 2.
[4]. Social Security
and Other Legislation Amendment (Income Support for Students) Act 2010.
[5]. L
Buckmaster, D Daniels and C Dow, Social
Security and Other Legislation Amendment (Income Support for Students) Bill
2009, Bills digest, 42, 2009–2010, Parliamentary Library, Canberra,
2009, p. 18.
[6]. Ibid.,
pp. 18–19.
[7]. D
Bradley, Review
of Australian higher education: final report, (Bradley Review),
Department of Education, Employment and Workplace Relations, Canberra, 2008,
recommendation 5, pp. xix, 56.
[8]. Including
having a dependent child in their care; being an orphan; having parents who are
unable to exercise their responsibilities because they are in prison, missing
or mentally handicapped or living in a nursing home; being a refugee (unless
they have a parent living in Australia or are wholly or substantially dependent
on someone else in the long term); being a young person in state care; where it
is considered unreasonable to live at home; or, being specially disadvantaged.
Department of Social Services (DSS), ‘3.8.15.10
Qualification for relocation scholarship’, Guide to social security law,
version 1.234, DSS website, 3 July 2017.
[9]. Ibid.
[10]. Social Services
and Other Legislation Amendment (2014 Budget Measures No. 6) Act 2014.
[11]. Department
of Human Services (DHS), ‘Student
Start-up Loan’, DHS website, 14 July 2017.
[12]. DSS,
‘1.2.7.60
Education Entry Payment (EdEP): description’, Guide to social security
law, version 1.234, DSS website, 3 July 2017.
[13]. DSS,
‘5.1.7.50
Education Entry Payment (EdEP): current rate’, Guide to social security
law, version 1.234, DSS website, 3 July 2017.
[14]. Social Security
Legislation Amendment Act (No. 3) 1991; D Daniels, Social
security payments for people caring for children, 1912–2008: a chronology,
Background note, Parliamentary Library, Canberra, 2009, p. 43.
[15]. Social Security
Legislation Amendment Act (No. 3) 1992.
[16]. Social Security
(Budget and Other Measures) Legislation Amendment Act 1993.
[17]. Social Security
(Non-Budget Measures) Legislation Amendment Act 1995.
[18]. Social Security
(Parenting Allowance and Other Measures) Legislation Amendment Act 1994.
[19]. DSS,
‘1.2.7.60
Education Entry Payment (EdEP): description’, op. cit.
[20]. Department
of Veterans’ Affairs, ‘5.3
Education Entry Payment (EdEP)’, Compensation and support policy library,
DVA website, 19 May 2011.
[21]. Australian
Government, Budget
measures: budget paper no. 2 2014–15, pp. 197, 206.
[22]. Australian
Government, Budget
measures: budget paper no. 2: 2017–18, pp. 77–78.
[23]. Parliament
of Australia, ‘Social
Services and Other Legislation Amendment (2014 Budget Measures No. 2) Bill 2014
homepage’, Australian Parliament website.
[24]. Parliament
of Australia, ‘Social
Services and Other Legislation Amendment (2014 Budget Measures No. 4) Bill 2014
homepage’, Australian Parliament website.
[25]. Parliament
of Australia, ‘Social
Services Legislation Amendment (Fair and Sustainable Pensions) Bill 2015
homepage’, Australian Parliament website.
[26]. Parliament
of Australia, ‘Social
Services Legislation Amendment (Budget Repair) Bill 2016 homepage’,
Australian Parliament website.
[27]. Parliament
of Australia, ‘Social
Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill
2017 homepage’, Australian Parliament website.
[28]. Student Assistance
Amendment Act 1986.
[29]. J
Prest and P Yeend, Social
Security Legislation Amendment (Youth Allowance Consequential and Related
Measures) Bill 1998, Bills digest, 156, 1997–98, Department of the Parliamentary
Library, Canberra, 1998.
[30]. DSS,
‘5.1.7.30
PES: current rate’, Guide to social security law, version 1.234, DSS
website, 9 November 2015.
[31]. DSS,
‘3.8.3.10
Qualification for PES’, Guide to social security law, version 1.234,
DSS website, 3 July 2017.
[32]. DSS,
‘1.1.Q.40
Qualifying study (Austudy, YA, PES, FAA)’, Guide to social security law,
version 1.234, DSS website, 4 January 2016.
[33]. DSS,
‘1.1.F.230
Full-time study (YA, Austudy, PES)’, Guide to social security law,
version 1.234, DSS website, 4 January 2016.
[34]. Ibid;
Higher Education
Support Act 2003: Administration Guidelines 2012.
[35]. DSS,
‘3.8.3.40
Concessional study-load students’, Guide to social security law,
version 1.234, DSS website, 6 February 2017.
[36]. Ibid.
[37]. Ibid.
[38]. Details
of the inquiry are on the Committee’s
website. See: Senate Community Affairs Legislation Committee, ‘Social
Services Legislation Amendment (Better Targeting Student Payments) Bill 2017’,
Inquiry homepage.
[39]. Senate
Community Affairs Legislation Committee, Social
Services Legislation Amendment (Better Targeting Student Payments) Bill 2017,
The Senate, Canberra, 1 September 2017, p. 6.
[40]. Ibid.
[41]. Australian
Labor Party Senators, Dissenting
report, Social Services Legislation Amendment (Better Targeting Student
Payments) Bill 2017, The Senate, Canberra, 1 September 2017, p. 7.
[42]. Australian
Greens, Dissenting
report, Social Services Legislation Amendment (Better Targeting Student
Payments) Bill 2017, The Senate, Canberra, 1 September 2017, p. 16.
[43]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, 8, 2017, The Senate, Canberra, 9 August 2017, p. 20.
[44]. J
Macklin (Shadow Minister for Families and Social Services), Turnbull
targets pensioners and families with more cuts, media release,
21 June 2017.
[45]. Australian
Labor Party Senators, op. cit.
[46]. Australian
Greens, op. cit.
[47]. Australian
Council of Social Service (ACOSS), Submission
to Senate Community Affairs Legislation Committee, Inquiry into the Social
Services Legislation Amendment (Better Targeting Student Payments) Bill 2017,
August 2017, [p. 1].
[48]. ACOSS,
‘Social security’,
ACOSS website, May 2017.
[49]. DSS,
‘Australian
Priority Investment Approach to Welfare’, DSS website, 4 October 2016.
[50]. ACOSS,
Submission, op. cit., [p. 4].
[51]. National
Social Security Rights Network (NSSRN), Submission
to Senate Community Affairs Legislation Committee, Inquiry into the Social
Services Legislation Amendment (Better Targeting Student Payments) Bill 2017,
August 2017, p. 2.
[52]. Ibid.,
p. 3.
[53]. Ibid.
[54]. Carers
Australia, Submission
to Senate Community Affairs Legislation Committee, Inquiry into the Social
Services Legislation Amendment (Better Targeting Student Payments) Bill 2017,
August 2017, p. 3.
[55]. People
with Disability Australia, Submission
to Senate Community Affairs Legislation Committee, Inquiry into the Social
Services Legislation Amendment (Better Targeting Student Payments) Bill 2017,
August 2017, [p. 1].
[56]. Ibid.
[57]. Explanatory
Memorandum, op. cit., p. 1.
[58]. Ibid.,
p. 2.
[59]. Ibid.,
pp. 22–31.
[60]. Parliamentary
Joint Committee on Human Rights, Scrutiny
report, 8, 2017, The Senate, 15 August 2017, p. 45.
[61]. Ibid.
[62]. Parliamentary
Joint Committee on Human Rights, Scrutiny
report, 10, 2017, The Senate, Canberra, 12 September 2017, p. 70.
[63]. Ibid.,
p. 74.
[64]. Ibid.,
p. 73.
[65]. Explanatory
Memorandum, op. cit., p. 5.
[66]. Ibid.
[67]. Ibid.,
p. 24.
[68]. See
footnote 8 for list of circumstances.
[69]. Explanatory
Memorandum, op. cit., p. 7.
[70]. Ibid.,
p. 9.
[71]. DSS,
‘5.2.6.70
EdEP historical rates’, Guide to social security law, version 1.234,
DSS website, 11 August 2014.
[72]. Senate
Community Affairs Legislation Committee, Official
committee Hansard, 31 May 2017, p. 174.
[73]. In
practice, this will be determined by delegates of the Secretary; specifically,
officials in the DHS.
[74]. These
schemes are not provided for by legislation. The changes will be made via
amendments to the policy guidelines to the schemes.
[75]. Explanatory
Memorandum, op. cit., p. 19.
[76]. DSS,
Submission
to Senate Community Affairs Legislation Committee, Inquiry into the Social
Services Legislation Amendment (Better Targeting Student Payments) Bill 2017,
August 2017, p. 4.
[77]. Ibid.
[78]. NSSRN,
op. cit., p. 4.
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