Joint Media Release with The Hon Kate Ellis MP, Minister for Youth
In response to the Bradley Review of Australian Higher Education, the Rudd Government has introduced a package of significant reforms to student income support and expanded eligibility for scholarships. These reforms are cost neutral over the next four years.
In these difficult economic times, the Government understands the importance of supporting young people to enhance their skills for the future.
A key aim of the Government’s Education Revolution is to raise the aspirations of students who would previously never have considered going to university.
To support participation in higher education, particularly amongst low SES students, the Government will reform the student income support system to better target and boost the level of assistance to those in need.
These reforms will increase access to student income support and provide stronger and more equitable assistance for the students who need it most.
To increase access to income support, the parental income test for dependants under Youth Allowance and ABSTUDY will be increased from $32 800 to $42 559 (for 2009-10). This aligns the income test with the maximum rate of Family Tax Benefit Part A.
In 2010 this measure is expected to benefit 67 800 new recipients who will now qualify for student income support and a further 34 600 existing recipients who will receive higher payments.
The age of independence for the purposes of receiving student income support will also be progressively lowered from 25 years in 2009 to 22 years in 2012.
In 2010, a new Student Start-up Scholarship of $2254 will also be introduced to replace the current Commonwealth Education Costs Scholarship.
Unlike the existing Commonwealth Education Costs Scholarship, the Student Start-up Scholarship will be available to all higher education students receiving student income support through Youth Allowance, Austudy and ABSTUDY.
An additional 146 600 university students will receive the Student Start-up Scholarship. Existing Commonwealth Scholarships recipients will be grandfathered.
The Government will also introduce a Relocation Scholarship of $4000 in the first year of study and $1000 in later years, to assist eligible university students receiving Youth Allowance or ABSTUDY with the costs of moving for study. This would replace the current Commonwealth Accommodation Scholarship and would support students who need to relocate for study, wherever they live.
This will benefit thousands of dependent students who have to move away from home to study and support disadvantaged independent students who are unable to live in the family home.
These new scholarships will also help ensure students from low income backgrounds have the assistance they need for textbooks and specialised equipment.
Students will no longer need to wait to see whether they have been offered a Commonwealth Scholarship via a university. Instead, they will apply for, and receive, their scholarship through Centrelink.
The package of reforms will also assist students by:
- relaxing the personal income test to $400 per fortnight and indexing this to cost of living increases so students can earn more from part-time work before their income support payments are reduced - this measure will apply from 1 January 2011
- extending student income support to all masters by coursework programs from 1 January 2012
- relaxing the means testing of equity and merit-based scholarships provided by universities and philanthropic organisations (this means that scholarships awarded by universities, up to the combined value of the Commonwealth Education Costs Scholarship and the Commonwealth Accommodation Scholarship will not affect student income support payments)
- removing the OS HELP loan fee to provide more support to Australian students who study abroad.
As part of these measures, the workforce participation criteria for independence under Youth Allowance and ABSTUDY will be tightened in line with the recommendations of the Bradley Review, which found that 49 per cent of student income support recipients come from families with incomes of more that $80,000.
Students who have worked full-time for a minimum of 30 hours a week on average for at least 18 months in a two-year period since leaving school will still be considered independent – but students who have undertaken part-time work or earned over $19 532 over 18 months will not.
This change will ensure that only students who are genuinely independent can receive student income support. The other individual circumstance criteria are not being changed.