Students need financial help to get through their studies. Indigenous Australians and low socio-economic status (SES) students particularly need help; but all students need greater assistance. Many students have to work excessive hours and this is impacting negatively on their study. A significant amount of tertiary students are even going without food because of lack of income.

All Commonwealth Government allowances for students should be above the poverty line. This is not the case at present. For example, students under 25 receiving Youth Allowance, and living in a share house, can be living about 38% below the Henderson poverty line.

The eligibility criteria for Youth Allowance for rural students are too tight and can create a barrier for remote young people contemplating study.

For the recent apology to Indigenous Australians to translate into positive action we need to look at the positive role that tertiary education can play in assisting Indigenous people to find decent work, and other opportunities.

Better income support would assist students to become more involved in the learning community as well as taking the financial pressure off so more time can be committed to study.

As a start, the Commonwealth should provide adequate income support so that all can participate in the learning and broader community life of the tertiary institution. There should be better income support of tertiary students in the following areas:

• the age of independence for Youth Allowance recipients should be reduced from 25 to 18 so that students are not assessed on the basis of their parents’ income and assets;
• the Youth Allowance threshold of earned income before penalty should be raised, to match CPI, from $6000 to at least $8000; and,
• scholarships providing financial support should not be included as accessible income when evaluating eligibility for income support.

Also, extra measures should be considered to assist Indigenous students and those attending tertiary education from remote and regional areas.

Update – posted July 09 (see directly below)

Student income support update
Information mainly sourced from Michael Klapdor and Dr Matthew Thomas budget analysis

January 2010 Update

The information below is now not accurate. The lowering the age of independence progressively for student income support has been blocked; as has the increases to the personal income test free area for students. The changes to assessable income in the area of privately funded equity or merit based scholarships have suffered a similar fate.  All of these measures were part of the Senate rejected Social Security and Other Legislation Amendment (Income Support for Students) Bill. There is no effective change to Youth Allowance/Austudy or privately funded scholarships of any nature.

The age of independence
JustAct asked that, ‘the age of independence for Youth Allowance recipients should be reduced from 25 to 18 so that students are not assessed on the basis of their parents’ income and assets.’ The current age of independence is 25 years. Young people can be considered independent at an earlier age if they meet certain criteria establishing that they should not be considered to be dependent upon or able to receive assistance from their parents. Under the new student income support arrangements, young income support recipients will automatically be considered independent if they are aged 24 years in 2010, 23 years in 2011 and 22 years from 2012 onwards. The changes are expected to benefit around 24 000 new and existing recipients over the next four years. This falls short of recommendation of 18 years but is a good step in the right direction.

Youth Allowance threshold
JustAct asked that ‘the Youth Allowance threshold of earned income before penalty should be raised, to match CPI, from $6000 to at least $8000.’ Under current arrangements, personal income above $236 per fortnight ($6136 per year) result in 50 cents in the dollar being deducted from Youth Allowance and ABSTUDY payments, and amounts earned over $316 result in 60 cents in the dollar being deducted. Over the three years from 2010–2011 to 2012–2013, the personal income test free area for students will increase from $236 per fortnight to $400 per fortnight ($10,400 per year). The first $80 earned over $400 will incur a reduction in students’ income support payments of 50 cents in every dollar. Any amount earned over $480 will result in 60 cents in every dollar being deducted. Thus, this measure will enable students to earn much more from work to supplement their Youth Allowance and ABSTUDY payments. This means that Youth Allowance threshold is significantly higher ($10,400 per year) than what JustAct was calling for (at least $8000). This is a really good outcome.

Student scholarships
JustAct asked that, ‘scholarships providing financial support should not be included as assessable income when evaluating eligibility for income support.’ Previously only Government scholarships were classed as tax exempt, and were not included in assessable income. Privately funded scholarships were included as assessable income. Commencing 1 January 2010, privately funded equity or merit based scholarships will not be counted as assessable income until reaching the value of $6702 (this threshold will be increased yearly). This applies to Youth Allowance, Abstudy and Austudy. This is a very good step forward.

For more information go to the Youth Allowance website (go to fact sheet on scholarships).

This is not ‘expert advice’. You should seek advice about your personal circumstances. If you need further independent advice on Commonwealth income support go to the National Welfare Rights Network website and find out contact details for help in your part of Australia.