Dan Tehan (Wannon, Liberal Party, Minister for Social Services) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

This bill makes a minor technical amendment to the Simplifying Student Payments Act 2017.

The Simplifying Student Payments Act supported regional and remote students by amending the rules governing when a person will be regarded as independent for the purposes of youth allowance. It intended to reduce the period young people from regional and remote areas of Australia have to earn the amount required to satisfy the workforce independence provisions from 18 months to 14 months. This measure commenced from 1 January 2018.

The reduction to 14 months was an election commitment by the government and part of a package to support regional students' access to education.

Students whose family home is in a regional or remote location can access youth allowance on the basis of being independent under concessional workforce participation arrangements.

One way in which students can demonstrate they have supported themselves is through a period or periods of employment over 14 months since leaving secondary school, with earnings totalling at least 75 per cent of wage level A of the national training wage. This is $24,836 for the 2017-18 financial year.

In addition, to access these arrangements students' parental income must be below $150,000, they must be undertaking full-time study and they must be required to live away from home to study.

This measure recognised 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.

The reduced period from 18 months to 14 months allows students to qualify for youth allowance four months sooner than under previous arrangements.

Students are now able to take a gap year at the end of secondary school and, subject to them satisfying the other qualification requirements for youth allowance, receive payment as independent the following year. Students who are considered independent for youth allowance purposes do not have their rate of payment affected by parental income, as is the case for dependent recipients.

Previously, students who qualified for youth allowance under these arrangements may have commenced study prior to qualifying for student payments or have taken two gap years in order to satisfy the 18-month criteria before commencing study and qualifying for payment.

The longer students are disengaged from study after completing secondary school, the less likely they will be to commence or complete tertiary study.

It is estimated that over the forward estimates approximately 3,700 regional and remote students will qualify for youth allowance as independent under the 14-month period. Approximately 2,500 would become eligible for payment as independent four months earlier than under the previous 18-month period.

Approximately 1,200 would become eligible for payment as independent, who otherwise would not have met the independence criteria. This includes students who choose to take a gap year, who may have not undertaken a gap year otherwise.

These young people are expected to change their employment and study patterns in order to earn the required amount in 14 months.

Despite this measure commencing on 1 January 2018, an unintended consequence of the act meant that a small group of approximately 300 students have not been able to take advantage of the reduced 14-month period.

Young people who were receiving youth allowance prior to 1 January 2018 were unintentionally left behind. This group remained under the old 18-month rule.

For example, a young person who finished school in 2016 and worked throughout 2017 hoping to qualify as independent and went on youth allowance as a dependent recipient, would have the 18-month period apply to them.

For a young person from a regional area who requires the full rate of youth allowance in order to move away from home to study, having the 18-month period apply to them could mean that they have to delay university for an extra year.

This bill will correct the unintended consequence of the act and will mean that the 14-month period is available for all students seeking independence for youth allowance under the workforce independence provisions for regional and remote tertiary students.

This bill will ensure that the 14-month period is applied consistently to all tertiary students from regional areas.

Debate adjourned.