Christian Porter (Pearce, Liberal Party, Minister for Social Services) Share this | Link to this | Hansard source

We are at the Social Services Legislation Amendment (More Generous Means Testing for Youth Payments) Bill 2015, and I thank all of the members opposite for their contributions on this bill. The bill will implement the government's 2015 budget measure that will provide more consistent and more generous support for families with dependent young people who qualify for certain youth income support payments.

With a financial commitment from the government of $262.7 million over the forward estimates, this bill will bring extra support for families as their children move into young adulthood, particularly rural and regional families whose children continue to study beyond year 12. The measure will, from 1 January 2016, include removing the family assets test and the family actual means test from the youth allowance parental means test arrangements. The additional tests are complex and can create a disincentive for people to increase their income and improve their capacity to support their families. Removal of the tests will align the youth allowance parental means test arrangements with those applying to family tax benefit part A, which do not include a family assets test or family actual means test.

The measure will also result in a more consistent level of support for families as young people move from family tax benefit part A to an individual income support payment. The parental income test exemptions for youth allowance will also be aligned with existing arrangements for family tax benefit part A. Removing the family assets test youth allowance will allow around 4,100 additional dependent youth allowance claimants to qualify for the first time, accessing average annual payments of more than $7,000 a year. Removing the family actual means test will also see around 1,200 more people receiving youth allowance for the first time, as well as increasing payments for around 4,860 existing students by approximately $2,000 a year.

The changes will reduce the significant regulatory burden on around 30,000 families subject to the family actual means test and around 200,000 families subject to the family assets test. The removal of the family actual means test means families will no longer need to document their expenditure and savings in detail or require the services of an accountant. The removal of the family assets test means families will no longer need to list and value their assets. The change means farming families will not have farm assets counted towards the means test for their dependent children claiming youth allowance.

A further beneficial component of this budget measure will apply from 1 July 2016, that being to expand the family pool for the youth parental income test to include a notional family rate of family tax benefit part A for all of the children for whom the parents have financial responsibility. This will apply to families that have dependent children receiving individual youth payments that parentally income tested and also younger dependent siblings and will result in a lower rate of reduction to the dependent child youth allowance that is currently the case. The current rules unfairly reduce assistance to families as young people move to parentally income tested youth income support payments by imposing excessive withdrawal rates.

The measure will reduce sudden drops in family assistance as young people move from family tax benefit part A and onto youth allowance or certain other youth payments. Including all FTB in the family pool for the youth parental income test will allow around 13,700 families with dependent children in both the FTB part A and youth systems to become eligible for an average increase in payment of around $1,100 a year. Around 5,800 families who currently miss out on payments due to the combined high taper rates will also become eligible for an average payment of around $1,300 a year. Additionally, in a two-stage process from 1 January 2016, maintenance income will be removed from the Youth Allowance parental income test assessment and from 1 January 2017 a separate maintenance income test for the treatment of child support will be applied, like the test that currently applies to family tax benefit part A. The change will align treatment of child support benefit families who have children both in the youth payment system and in the family tax benefit system. These families are currently penalised by double counting the contribution of non-resident parents through child support in some circumstances.

The measures were adopted following an examination of issues by an interdepartmental committee on access to higher education for regional and remote students at the urging of Senator Bridget McKenzie, the member for Wannon and the member for Forrest, who have urged the government to do more to improve access to education for regional and remote students. Removing complex and unnecessary means tests and improving the operation of the parental income test is a good first step in responding to the concerns around parental means testing and the levels of student assistance available that were identified in the interdepartmental committee's interim advice.

This bill is boosting assistance for working families, smoothing the transition to individual payment for young people and better supporting them into study to build their careers, develop economic opportunities and contribute to our economy. I commend the bill to the House.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.