The Minister for Education, Julia Gillard today released a student income support estimator to help students plan their future study. Check it out here.
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.
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.
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 (to replace the current Commonwealth Education Costs Scholarship received by just 17.7% of students)).
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 ( less than 10 per cent of students have been benefiting from a Commonwealth Accommodation Scholarship). The Government 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 tightened the eligibility rules in relation to the Independent rate of Youth Allowance and direct the savings to support for students by increasing the Parental Income Test.
Many of these changes will start from 1 January 2010, subject to the passage of legislation. Please use this information and the estimator as a guide only and check with Centrelink for full advice about the assistance you can get in your individual circumstances.
1.Includes both the annual value of student income support payments and the value of scholarships.
2. Basic rate excludes Rent Assistance. This is the rate calculated by the Estimator.
3.Students renting privately and living away from home may also be eligible for Rent Assistance (RA). The amount available will depend upon individual circumstances. The maximum rate of payment for a single student with no dependent children is currently $111.20 per fortnight, or an extra annual amount of $2891 per eligible student. Columns which include RA are based on the maximum RA payment.
Article by Christie Lewis
Christie is Practice Manager at Alan Lewis Accountants . Besides accounting, her passion is for all things small business (and blogging, of course). You can contact Christie directly at christie@lewistaxation.com.au.
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