House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Tertiary Education, Skills, Science and Research, Minister for Small Business, The Honourable Chris Bowen, MP)

Schedule 1-OS-HELP assistance for study in Asia

Part 1-Amendments

Summary

These amendments seeks to broaden the entitlement requirements of OS-HELP assistance, increase the maximum amount of OS-HELP assistance for students undertaking overseas study in Asia and to provide a supplementary payment for students studying an Asian language in preparation for their overseas study in Asia.

Explanation of the changes

Item 3 makes amendments to current paragraph 118-1(1)(b) to ensure students will be entitled to OS-HELP assistance if the student has not received OS-HELP assistance in relation to more than one other period of 6 months.

Given Item 7 provides for a supplementary amount for Asian language study, this amendment has been made to make it clear that a student will be still be eligible for both an OS-HELP assistance amount for overseas study and an amount for language study even if they have received either of these amounts in one other period of 6 months.

Item 4 makes amendments to current paragraph 118-1(1)(c) in order to allow a student to be entitled to OS-HELP assistance if the student is enrolled in a course of study , rather than an undergraduate course of study . The effect of this amendment is to expand the entitlement of OS-HELP assistance to students undertaking postgraduate courses.

Item 6 amends current paragraph 118-1(1)(f) by reducing the required Equivalent Full Time Student Load (EFTSL) remaining in a student's course of study upon returning from overseas from 0.5 EFTSL to 0.125 EFTSL. The effect of this amendment is to expand the entitlement of OS-HELP assistance so that a student may still be entitled to OS-HELP assistance if they have 0.125 EFTSL (generally the equivalent of one unit of study) to complete after the study outside of Australia.

Item 7 inserts new section 118-2 entitled "Entitlement to supplementary amount for Asian language study" which provides a series of requirements that a student must meet in order to be entitled to a supplementary amount for Asian language study. In relation to a period of six months, a student will be entitled to a supplementary amount if the student is otherwise entitled to OS-HELP assistance, the assistance is for overseas study in Asia and the student undertakes an intensive study in an Asian language in preparation for undertaking that overseas study. In addition, the student will be required to apply to a home provider for a supplementary amount and the home provider will also have to select the student for receipt of a supplementary amount in order for the student to be entitled to a supplementary amount.

Please note that if a student is entitled to a supplementary amount for Asian language study this will be in addition to the OS-HELP assistance the student may receive for overseas study.

New section 118-2 also provides that a student is not entitled to a supplementary amount of Asian language study in relation to a period of 6 months if the student applies to the home provider for the assistance after the student has already completed the intensive study in an Asian language. Please note that this will not prohibit a student from being eligible for a supplementary amount for Asian language study if the student is currently enrolled and undertaking a course at the time the application is made.

New section 118-2 further provides that the OS-HELP Guidelines may specify circumstances in which a student undertakes intensive study in an Asian language in preparation for undertaking overseas study in Asia.

Item 8 makes an amendment to current subparagraph 118-10(a)(i) by removing the requirement that a student be enrolled with an overseas higher education institution or at an overseas campus of a higher education provider in full time study. This amendment is to allow students to meet the overseas study requirements by undertaking activities which may not otherwise be considered as being enrolled in one of these institutions, such as undertaking overseas work placements. Instead, students will be required to be undertaking full time study and fulfil the other requirements of current section 118-10 by undertaking study outside Australia that counts towards the course requirements of the course of study that the student is enrolled in with the home provider.

Current section 118-15 contains provisions in relation to the selection of students for receipt of OS-HELP assistance. Items 10, 11, 12 and 13 make the necessary amendments to current section 118-15 so that these provisions will apply to the selection of students for a supplementary amount for Asian language study as well as to the selection of students for receipt of OS-HELP assistance.

Item 14 repeals current section 121-1 and substitutes new section 121-1. The purpose of new section 121-1 is to replicate the provisions in current section 121-1 with respect to determining an amount of OS-HELP assistance for overseas study as well as the amount of OS-HELP assistance for a supplementary amount for Asian language study. For both forms of OS-HELP assistance the amount determined by the higher education provider must not exceed the amounts specified in the student's application or the maximum OS-HELP (overseas study) or maximum OS-HELP (Asian language study) amount, depending on which form of assistance is applied for.

Depending on which form of assistance is applied for, new section 121-1 also provides that the determination must also not be less than the higher education provider's minimum OS-HELP (overseas study) amount or minimum OS-HELP (Asian language study) amount, if the provider has a minimum OS-HELP (overseas study) amount or a minimum OS-HELP (Asian language study) amount.

Item 15 repeals current section 121-5 and substitutes new section 121-5. This amendment provides that the maximum OS-HELP (overseas study) amount for a period of 6 months is $7,500 for study undertaken in Asia and $6,250 for overseas study in all other locations. A higher maximum amount for study in Asia is provided for under this amendment to ensure that students are given greater assistance and incentive to undertake study in Asia. The maximum OS-HELP (overseas study) amount will be indexed under Part 5-6 of HESA.

New section 121-5 further provides that the OS-HELP Guidelines may specify whether overseas study undertaken at a particular place is undertaken in Asia. It is envisaged that the OS-HELP Guidelines will reflect the classifications used by the Australian Bureau of Statistics' Standard Australian Classification of Counties.

Please note that the $6,250 payment for OS-HELP (overseas study) in all other locations replicates current section 121-5 which provides that the maximum OS-HELP amount for a period of six months is $5,000 which is indexed under Part 5-6 of HESA. The sum of $6,250 is an estimate of the value of $5,000 as indexed under Part 5-6 of HESA on 1 January 2014.

Items 16 and 17 amend current section 121-10 so that this provision applies specifically to OS-HELP (overseas study) amounts. This amendment will provide that a higher education provider may determine in writing its minimum OS-HELP (overseas study) amount and that this determination has effect until it is replaced by a later determination or is revoked.

Item 18 inserts new sections 121-15 and 121-20 in order to provide for the maximum OS-HELP (Asian language study) amount and the minimum OS-HELP (Asian language study) amount respectively.

New section 121-15 provides that the maximum OS-HELP (Asian language study) amount for a period of 6 months is $1,000. The maximum OS-HELP (Asian language study) amount is indexed under Part 5-6 of HESA. Please note that new section 121-15 replicates current section 121-5 but with respect to the maximum OS-HELP (Asian language study) amount.

New section 121-20 provides that a higher education provider may determine, in writing its minimum OS-HELP (Asian language study) amount and that the determination will have effect until it is replaced by a later determination or is revoked. Please note that new section 121-20 replicates current section 121-10 but with respect to the minimum OS-HELP (Asian language study) amount.

Item 19 inserts new subsection 124-1(2A) which provides that the OS-HELP Guidelines may provide that a student who is entitled to a supplementary amount for Asian language study may be paid an amount for that language study, and an amount for the overseas study at different times determined in accordance with the OS-HELP Guidelines.

As the required Asian language study must occur in preparation for overseas study in Asia, this new subsection has been inserted given that the costs for the two different types of study may occur at different times. This new subsection allows the OS-HELP Guidelines to allow for these payments to occur at different times.

This clause also inserts new subsection 124-1(2B) which provides that if a student receives both an amount for overseas study and an amount for language study then these amounts will be taken to be a separate loan for the purposes of current section 137-15. In this circumstance, a student will incur two debts in relation to OS-HELP assistance, where the debt will be incurred on the day which the higher education provider pays an amount lent to the student (as per current subsection 137-15(3)).

Item 23 amends the table in current subsection 198-5(1) to provide that the maximum OS-HELP (overseas study) amount and the maximum OS-HELP (Asian language study) amount are amounts that are to be indexed under Part 5-6 of HESA.

Items 1 and 2 make consequential amendments to section 65-1 and 115-1 respectively due to the amendments contained in Item 8 .

Items 5, 21 and 22 make consequential amendments to sections118-1, 140-5 and 140-25 respectively due to the amendments contained in Item 4 .

Item 9 inserts a note at the end of section 118-10 which provides an explanation of the amendment contained in Item 8 .

Item 20 inserts a note at the end of subsection 137-15(1) which refers the reader to subsections 124-1(2A) and (2B) draw the reader's attention to the amendment made in Item 19 .

Items 24 to 28 make the necessary amendments to the definitions contained in Schedule 1 by repealing redundant definitions or inserting new definitions as a result of the amendment made in Part 1 of Schedule 1 of the Bill.

Part 2-Application of amendments

Summary

Part 2 of Schedule 1 of the Bill contains provisions relating to the application of the amendments contained within the Bill as well as provisions relating to the indexation of the maximum OS-HELP (Asian language study) amount and the maximum OS-HELP (overseas study) amount.

Explanation of the changes

Sub-item 29(1) provides that Part 3-4 of HESA, as amended by Part 1 of Schedule 1 of the Bill, only applies in relation to OS-HELP assistance paid to a to a student if the assistance is paid and the student is selected for receipt of assistance on or after 1 January 2014. In addition, the amendment will only apply if the student has not completed the overseas study (or the Asian language study, in the case that the student applies for the supplementary amount) before 1 January 2014. This is to ensure that while the additional assistance and expanded entitlements are not intended to commence until 1 January 2014, the Bill will still allow students to apply for the additional assistance and expanded entitlements in anticipation of receiving the assistance on or after 1 January 2014. This will ensure students can benefit from the amendments contained in Part 1 of Schedule 1 of the Bill immediately on or after 1 January 2014.

Sub-item 29(2) provides that to avoid doubt, sub-item 29(1) applies even if the student applied for OS-HELP assistance before 1 January 2014, the period of 6 months to which the assistance relates started before 1 January 2014, or the student started to undertake the overseas study to which assistance relates, or intensive study in an Asian language before, 1 January 2014. Please note, however, that as per sub-item 27(1), if the overseas or intensive Asian language study is completed by 1 January 2014, the student will be eligible to OS-HELP assistance as it currently operates in HESA, rather than as it will operate under the amendments contained in the Bill.

Sub-item 30(1) provides that indexation, under Part 5-6 of HESA, will not apply to the maximum OS-HELP (Asian language study) amount and the maximum OS-HELP (overseas study) amount on 1 January 2014. As these amounts have been amended in Part 1 of Schedule 1 of the Bill to reflect values that are appropriate for 1 January 2014, indexation is not required for these amounts.

Sub-item 30(2) provides that despite Part 5-6 of HESA, the maximum OS-HELP amount for a period of 6 months under section 121-5 of HESA, as in force immediately before the commencement of Item 30 is taken to be $6,250 for a student who is paid OS-HELP assistance on or after 1 January 2014 and either is selected for receipt of OS-HELP assistance before 1 January 2014 or completes the overseas study in respect of the period before 1 January 2014.

The effect of this sub-item is to ensure that in circumstances where the amendments contained in Part 1 of the Bill do not apply to assistance paid to a student, the maximum OS-HELP amount is taken to be $6,250.

The reason for this sub-item is that if the student is precluded from OS-HELP assistance as amended by the Bill due to the application requirements in Item 29 , then the student's assistance will be determined by the OS-HELP assistance provisions as it currently operates in HESA. Under current section 121-5, the student may be eligible for OS-HELP assistance up to $5,000 as indexed under Part 5-6 of HESA. The maximum OS-HELP (overseas study) amount overseas study in all other locations is $6,250 (as inserted by Item 15) and operates to reflect the maximum OS-HELP amount under current section 121-5. As the $6,250 amount is a current estimate of the value of $5,000 as indexed under Part 5-6, to avoid inconsistency of payments between students to which the amendments do and do not apply, this sub-item deems that the maximum OS-HELP amount for students to which the amendments do not apply is $6,250.