Joint Media Release with the Hon Julia Gillard MP, Deputy Prime Minister

The Minister for Education, Julia Gillard today released a student income support estimator to help students plan their future study.

The estimator allows prospective students to enter their parents’ income level and family type to gain an estimate of the level of support they might expect to receive under the Rudd Government’s proposed changes to Youth Allowance.

The Rudd Government’s reforms will deliver more support for more students and target support to students who need it most.

Overall, around 68 000 more students will be able to access Youth Allowance in 2010 and almost 35 000 existing recipients will benefit from an increase to their payment.

Many students who were previously forced to gain eligibility through the old independence criterion will now automatically be eligible to receive Youth Allowance as a result of the increases to the Parental Income Test.

Already, the majority of students receive Youth Allowance based on their parents’ income.

Under the proposed system students that live away from home to study will be entitled to receive student income support at higher family income levels than students who stay at home.

For example, in families with two students aged 18 and over living away from home, parents can earn up to almost $141 000 — up from $79 000 under the current system.

For families with two students aged 18 and over living at home, the new parental income cut-off is almost $108 000 compared with the current cut-off of around $62 000.

Families on low incomes will be better off than under the current system and the changes will be of particular benefit to rural and regional students.

For example, a family earning $50 000 with two students who have to move away from home may receive $18 145 a year in Youth Allowance payments alone. Total support, including scholarships and rent assistance, could be up to $33 436 for this family type.

University students on student income support payments will also be entitled to new scholarships.

All university students receiving student income support, around 146 600 students, will receive an annual Student Start-up Scholarship of $2 254.

This compares with current arrangements where only 17.7 per cent of university students on income support receive a Commonwealth Education Costs Scholarship.

Students who need to live away from home to study may also be eligible for the new Relocation Scholarship of $4000 in the first year of study and $1000 each year following.

Currently, the number of scholarships are capped which means many rural and regional students often missed out on this much needed support.

In fact, less than 10 per cent of students have been benefiting from a Commonwealth Accommodation Scholarship and this number has increased since labour came into office as a result of our commitment to double the number of Commonwealth Scholarships by 2012.

The Government also estimates that the number of accommodation-related scholarships offered next year will increase by 75 per cent.

In total, eligible university students who have relocated to study would receive $6254 in the first year and $3254 in subsequent years on top of their Youth Allowance under the new arrangements.

The Government has taken the tough decision to tighten the eligibility rules in relation to the Independent rate of Youth Allowance and direct the savings to support for students that need it most by increasing the Parental Income Test.

The Rudd Government is determined to ensure that tax-payer funded support is going to students that need the most, including rural and regional students.

Further information about the amount of support available to students is attached.

The estimator and detailed fact sheets are available at: www.deewr.gov.au/youthallowance

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