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

I move:

That this bill be now read a second time.

The government is committed to ensuring the long-term sustainability of Australia's welfare system. This bill introduces a package of measures announced in the 2017-18 budget that act on this commitment by better targeting student payments. This bill:

Several supplementary payments within the social security payments system are directed to students and are designed to encourage people to undertake further education and training to enhance their employment and career prospects. However, these supplementary payments should be better targeted and designed for a specific purpose to ensure that they are reflective of students' circumstances and the intent of the payments.

Relocation Scholarship payments

From 1 January 2018, or the first 1 January or 1 July following royal assent, this bill will restrict the Relocation Scholarship to students relocating within Australia and students studying in Australia. This measure is consistent with the simplification of the payment system and aims to streamline the delivery of the Relocation Scholarship and better reflect its policy intent.

The Relocation Scholarship primarily assists students from regional and remote areas of Australia moving away from home to study. This is in recognition that regional and remote students face additional costs in pursuing tertiary education and have much lower participation rates in higher education than students from major cities areas of Australia.

The Relocation Scholarship is a supplementary payment for dependent and some independent youth allowance and Abstudy living allowance recipients who are required to live away from home to undertake higher education studies. The scholarship commenced in 2010 and is an annual lump-sum payment.

The rate of the Relocation Scholarship paid to qualified students depends on their circumstances. In 2017, students receive $4,376 in their first year of study and $1,094 in each following year. In recognition of the additional costs of study, students from regional and remote areas receive $2,189 in their second and third years of study. These amounts are indexed in January each year.

The legislation and administration of the Relocation Scholarship is complex. At present, students with a parental home or usual place of residence overseas are eligible for the Relocation Scholarship regardless of whether they are relocating to a major city of Australia or to a regional or remote area.

Continuing to pay the Relocation Scholarship to students moving away from an overseas home to Australia is not consistent policy with the purpose of the scholarship, which is to assist regional and remote students with additional costs that they face. It is also not consistent policy to pay the Relocation Scholarship to students who relocate to study part of their Australian course overseas.

Under this measure students will no longer be eligible for the Relocation Scholarship where each of their parents' homes is overseas or where the student's usual place of residence is located overseas. Students studying a component of their Australian degree overseas will also no longer be eligible for the Relocation Scholarship while they are overseas.

Where a student's parents return to Australia to live or the student returns to Australia to continue studying after undertaking part of their course overseas, the student's eligibility for the Relocation Scholarship will be retested and, depending on the circumstances, the student may become eligible for the scholarship.

Youth allowance recipients receiving the Relocation Scholarship prior to the commencement of this measure with a home overseas will continue to receive the Relocation Scholarship after this date if, on the day they started their current course, their home was overseas.

Students studying part of their Australian course overseas will have their qualification for the Relocation Scholarship retested after this measure commences, including students who had previously received a Relocation Scholarship whilst studying overseas.

Commonwealth supported students who undertake part of their Australian course overseas often relocate for short periods of time—for example, on exchange for a semester, someone may be able to access the Overseas Higher Education Loan Program (OS-HELP) loans to assist with airfares, accommodation or other travel or study expenses. In addition, youth allowance recipients undertaking overseas study as part of their full-time Australian course may be paid for the entire period of their overseas study as long as the study can be credited towards their Australian course. This measure will not affect students' ability to access these forms of assistance.

This measure will also apply to Abstudy living allowance recipients through the Abstudy Policy Manual.

In 2016, approximately 23,000 students received a Relocation Scholarship. It is estimated that fewer than 300 students per year with parental homes overseas will no longer be eligible for the Relocation Scholarship under this measure, and fewer than 150 students per year studying overseas will no longer be able to access the Relocation Scholarship.

This measure is estimated to result in savings of approximately $1.9 million over the forward estimates.

Pensioner education supplement and education entry payment

From 1 January 2018 or the first 1 January or 1 July following royal assent, this bill will align the education entry payment and pensioner education supplement payment rates with the actual study loads undertaken by eligible students, with four payment tiers introduced for each payment. Additionally, the pensioner education supplement will only be paid during the periods that students are actually studying.

Introduced in 1987, the pensioner education supplement is a fortnightly supplement to assist income support recipients with some of the ongoing costs of full-time or part-time study so that they may obtain skills and qualifications to participate in the labour market. The pensioner education supplement may be paid to eligible people receiving:

It is currently paid at two rates, $62.40 or $31.20 per fortnight, depending on an individual's primary income support payment and study load.

The education entry payment was introduced in 1993 to provide a lump sum payment to eligible income support recipients to assist with some of the up-front costs of education and training. Payment is made each 12 months or each calendar year, depending on the primary social security payment being received. Recipients may receive the education entry payment as well as the pensioner education supplement.

This bill will align the rates of the pensioner education supplement and education entry payment with the amount of study actually undertaken. Irrespective of their base income support payment, eligible students will be paid a pensioner education supplement of $62.40 per fortnight if they are undertaking a study load that is at least 76 per cent of the normal amount of full-time study. The rate of payment will then reduce incrementally to $46.80, then to $31.20 and then to $15.60 each fortnight to align with the minimum reduced and part-time study loads of 51 per cent, 26 per cent and 25 per cent respectively.

These same levels of study will also be applied to the education entry payment. The current payment of $208 a year will continue for students studying at least 76 per cent of the normal amount of full-time study. The lump sum payment would then be reduced incrementally to $156, $104 or $52 to align with reduced and part-time minimum study loads of 51 per cent, and 26 per cent and 25 per cent respectively.

These changes to the rates of the pensioner education supplement and education entry payment will not impact on a recipient's primary income support payment.

The new rates of the pensioner education supplement and education entry payment are fair and equitable. Students undertaking part-time study loads do not generally incur the same study costs as those studying full-time. It is appropriate for the rates of the pensioner education supplement and education entry payment to reflect this fact. In addition, the pensioner education supplement will be paid only when a recipient is actually engaged in study. That is the time when study costs are actually incurred.

Changes to the pensioner education supplement and education entry payment are estimated to result in savings of approximately $94.7 million over the forward estimates.

By better targeting student payments to ensure they are reflective of a student's circumstances, and the intent of the payments, the government will improve the long-term sustainability of Australia's welfare system so that it remains available for those who need it long into the future.

I commend the bill to the House.

Debate adjourned.