John McVeigh (Groom, Liberal Party, Minister for Regional Development, Territories and Local Government) Share this | Hansard source

This bill, the Social Services Legislation Amendment (Student Reform) Bill 2018, will introduce changes to improve access to youth allowance for regional, rural and remote students who have to move away from home to study. It will also make technical amendments regarding approved courses for student payments. Schedule 1 of the bill will increase access to youth allowance for regional students who have to move away from home to study. It forms part of a package of measures announced in the budget that respond to the independent review of regional, rural and remote education.

The requirement that students engage in employment over an 18-month period after they have finished school meant that many students were deferring their university studies for two years. In 2016, the government announced it would reduce the 18-month self-supporting period to a 14-month period. This means that students can now satisfy the 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. This reduction responded to evidence that the longer students are disengaged from study the more likely they are not to recommence studying. To be assessed as independent under these criteria, students are also be required to live away from home to undertake full-time study. Their combined parental income must be less than $150,000 a year and 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 threshold was set in 2011 and it has remained at $150,000 since its introduction. This threshold is the same, regardless of family size. This doesn't reflect increasing wages or the extra costs associated with raising a larger family. The criterion aims to support regional students, but, due to the normal effects of income growth, fewer families fall under the $150,000 threshold. To address this decline, the bill will increase the threshold 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 threshold for the youth allowance regional workforce independence criteria will be $170,000, which is a significant increase from $150,000. These increases will commence from 1 January 2019.

This bill will mean that more regional students will get more youth allowance in their pockets. This is because students who qualify as independent for youth allowance do not have their payment reduced by parental income testing. This bill will therefore provide greater access to youth allowance for regional students. It is expected the number of students who qualify for youth allowance under the criteria will increase by some 75 per cent, from 3,029 to over 5,300. In summary, this bill allows for the implementation of measures that will help students from regional, rural and remote Australia who must move away from home to study.

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