Second Reading Speech
Mr TEHAN (Wannon-Minister for Social Services)I move:
That this bill be now read a second time.
This bill implements measures that it will make it easier for regional, rural and remote students who have to move away from home to study to get youth allowance.
Youth allowance is subject to partner, personal and parental income testing. 'Independence' for youth allowance purposes means that a student's payment is not reduced by parental income testing.
The bill will improve access to youth allowance for regional students who must relocate to study and responds to the Halsey review of regional, rural and remote education.
The independent review identified that young people in regional Australia are half as likely to have completed a university degree as their city counterparts.
The independent review's report contains 11 recommendations to improve the quality of education and training for students in regional, rural and remote Australia, including:
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- improving the availability, affordability and accessibility of vocational education and training for regional, rural and remote students;
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- reducing the financial burden for regional, rural and remote students who move away from home for further study and training;
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- supporting regional, rural and remote students to make successful transitions from school to university, training and employment; and
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- reviewing income support that is available for regional, rural and remote students who must move away from home, to ensure they are able to commence tertiary study immediately following school completion.
This bill directly addresses these particular recommendations.
The youth allowance regional workforce 'independence' criteria were introduced in 2011 to address lower participation rates of regional students in tertiary education.
These criteria enable students from regional, rural and remote areas to qualify as 'independent' for youth allowance purposes if they support themselves through paid work.
In 2016, the government announced it would reduce the period or periods of employment for regional, rural and remote students under the youth allowance regional workforce 'independence' criteria from 18 months to 14 months.
This reduction responded to stakeholder concerns that the 18-month period was resulting in regional students taking two years off to work in order to earn their 'independence' status prior to attending university.
Reducing the period to 14 months has meant students can satisfy the youth allowance regional workforce 'independence' criteria by taking a single gap year, rather than having to take two gap years. For example, if a student finished school in November 2016 they could commence university in February 2018, following their gap year, and receive youth allowance payments.
To be assessed as 'independent' under these criteria, students must also:
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- be required to live away from home to undertake full-time study;
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- their combined parental income must be less than $150,000 for the appropriate tax year; and
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- the student's family home must be categorised under the remoteness structure as inner regional Australia, outer regional Australia, remote Australia, very remote Australia or on Norfolk Island.
The $150,000 parental income cut-off to access these criteria was set in 2011 and it has remained at $150,000 since its introduction. In addition, this parental income cut-off is the same regardless of family size. This doesn't reflect increasing wages or the extra costs associated with raising a larger family.
This bill will increase the parental income cut-off from $150,000 to $160,000. In addition, it will introduce a $10,000 'per child' amount, which will increase the parental income cut-off for larger families.
This means that for the average two-child family the parental income cut-off for the youth allowance regional workforce 'independence' criteria will be $170,000-a significant increase from $150,000. If this bill passes, these increases will commence from 1 January 2019.
In addition, feedback from some students has indicated that when they finish school their parental income may be under the cut-off, but by the time they have completed their self-supporting period their parental income may have increased, thereby preventing them from qualifying as 'independent', resulting in these students feeling they have effectively wasted a gap year.
This bill will provide students with the option to make the year in which the parental income is assessed the financial year preceding the beginning of the self-supporting period.
With this change, students will know before they decide to take a gap year whether their parental income will be under the cut-off.
As a result of all these changes, it is expected that the number of students who qualify for youth allowance under these criteria will increase by 75 per cent from 3,029 to over 5,300. I'll just repeat that: from 3,029 to over 5,300.
Secondly, this bill allows for the implementation of a component of the 2018-19 budget measure acknowledging '50 Years of ABSTUDY'by making some technical amendments to the Social Security Act 1991 and the Social Security (Administration) Act 1999.
These amendments address minor legislative anomalies relating to the Maintenance Income Test reconciliation process and the calculation of the Maintenance Income Test Reducible Amount.
Schedule 2 in this bill makes a minor amendment to strengthen the rules relating to courses approved for student payments. The amendment is technical in nature and reflects current arrangements for student payments.
Courses approved for student payments are outlined in the Student Assistance (Education Institutions and Courses) Determination 2009 (No.2) (the determination) which is made under the Student Assistance Act 1973.
Schedule 2 will broaden the legislative instrument making power for the determination. This will better allow student payment recipients undertaking courses that lose approval for student payments to retain access to their payment until they finish their course.
The purpose of this amendment is to strengthen the minister's power under subsection 5D(1) to provide for students to continue receiving student payments if their course loses approval part-way through their study.
This will provide greater certainty, as it will allow for students to continue being eligible for payment until the end of the course, unless there is a break in their payment entitlement. This ensures that students are not unfairly disadvantaged if their course loses approval for student payments.
This bill will provide greater certainty to all Australians who want to undertake study, particularly those from regional and remote communities. It is important that we provide these students with the opportunities to further their education and find work.
Debate adjourned.