Warren Snowdon (Lingiari, Australian Labor Party, Minister for Defence Science and Personnel) Share this | Hansard source

Let me firstly make the observation that DVA, as the member for Fadden should know, or at least the shadow minister for veterans' affairs should know, has arrangements in place to advise VCES students of their options where FTB exceeds VCES allowances. The background to this is important.

From 1 January 2012 the government increased the maximum rate of FTBA for 16- to 18-year-olds in full-time secondary study from $52.64 to $214.06. It is currently $220.64 per fortnight. That equated it to the 13- to 15-year-old rate, which was a 2010 election commitment recognising the cost of older teenagers. The increased rate is to be payable until the end of the calendar year in which the child either turns 18 or leaves full-time secondary study, whichever is earlier. The end of year FTBA supplement will also be payable to families with children aged 16 to 18 at $726.35 pro rata once a tax return is lodged.

This change meant that new applicants for youth allowance could no longer be paid for a secondary student aged 16 and over and are asked to apply for FTB. However, Centrelink when wrote to existing youth allowance recipients very few applied for FTB—fewer than 10,000 from 85,000 letters sent out. DVA's VCES and MRCAETS rate of $223 per fortnight for 16- and 17-year-olds living at home is set at the same rate as Centerlink's youth allowance. The rate of FTBA, including the annual FTBA supplement is now more than the annual amount of youth, VCES and MRCAETS allowances payable for a secondary student aged 16 to 17 except for those on living away from home and homeless rates. This means it is more beneficial for some families after means testing to receive FTB than education assistance under VCES or MRCAETS—that is, they will be better off receiving a comparable payment from Centrelink than from DVA.

Also available from Centrelink is family tax benefit part B, which is targeted at single income and low-second-income-earning families. This may be paid up to $100.66 per fortnight. The FTB part B supplement is up to $354.05 per family per year. Under the children's scheme, Abstudy postgraduate award scheme or the VCES there is a similar preclusion to that of FTB. This means that dependants over 16 who apply for FTBA will be able to retain their orphan pension if the criteria are met. Those who have lost their orphan pension owing to receiving another payment will likely seek to have it reinstated. There were approximately 200 recipients of orphan pension in 2012. It was expected that this number would increase by 72 with those applying for FTB. Statistics indicate that only nine orphans have switched to FTB.

There is currently no preclusion in the MRCA that presents a payment for education assistance being made at the same time as a payment for an eligible young person. The reasons VCES and MRCAETS cannot be aligned for FTB rates of education allowance under the VCES and MRCAETS are linked to rates of youth allowance. However, unlike youth allowance, education allowances under the VCES and MRCAETS are not means tested. Aligning FTB is a difficult and is a different program to redesign. We are talking about a very small number, relatively speaking, of people. As I said earlier, DVA has put in place arrangement to advise VCES students of their options where FTB exceeds VCES allowances. That is a simple fact and something that I know you would appreciate.

I will conclude by returning to an earlier contribution to make sure that there is no misunderstanding. I have no difficulty at all with people arguing that they want to change an indexation rate for their retirement benefit. I have a great deal of difficulty in equating it to an age pension. I will read what Nick Minchin said when he was the coalition minister for finance:

This claim (to change indexation) was properly rejected by the Howard Government, of which I was a member.

There is no inherent logic to the proposition that a public sector employment employment-related superannuation payment should be indexed in exactly the same fashion as a means-tested welfare benefit, in this case the age pension.

I rest my case. It is something so logical even those opposite should see it.

Proposed expenditure agreed to.

Education, Employment and Workplace Relations

Proposed expenditure $4,202,808,000

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