AUSTUDY Regulations (Amendment) 1995 No. 393
EXPLANATORY STATEMENT
Statutory Rules 1995 No. 393
Issued by authority of the Minister for Schools, Vocational Education and Training
Student and Youth Assistance Act 1973
AUSTUDY Regulations (Amendment)
The Student and Youth Assistance Act 1973 (the Act) provides the legislative authority for the AUSTUDY scheme and for a debt management regime for the AUSTUDY, ABSTUDY and Assistance for Isolated Children schemes. The schemes pay financial assistance directly to students or parents.
Section 56 of the Act provides that the Governor-General may make regulations for the purposes of the Act.
The changes to AUSTUDY made by the amending regulations are outlined below. The references in brackets are references to the amending regulation.
A. Changes announced in the 1995 Budget
"At home" rate for independent students aged 22-24
• A new "at-home" rate is introduced. The rate is $20 a week less than the existing independent rate for people aged 22 to 24. It applies to students who are eligible for the independent rate of AUSTUDY only because of their age (ie they are at least 22 years of age) and who live at home with their parents. Students who are eligible in 1995 for the independent rate because of their age and who live with their parents will continue to be eligible for the independent rate in 1996. The new rate does not apply to students who are also eligible to get the special rate of living allowance. (subregulations 7.2 and 7.4)
AUSTUDY/Dependent Spouse Allowance
• Consistent with the restructuring of Commonwealth income support payments m remove the notion of "dependency" between spouses, the AUSTUDY Dependent Spouse Allowance, which is currently paid to students in respect of their dependent spouses, is abolished. The spouse will be able to apply to the Department of Social Security for parenting allowance in his or her own right. (regulation 9)
B. Changes to implement other government decisions
AUSTUDY drought relief concessions
• As part of the 1994 drought relief assistance measures, AUSTUDY parental and spouse income test concessions were extended to families living in "exceptional circumstances" drought affected areas and receiving payments under the Drought Relief Payments Scheme (DRP) which are made while the area is an "exceptional circumstances" drought affected area and for a six month recovery period thereafter. These concessions are extended until the end of the year in which the family ceases getting a DRP. At the same time, the AUSTUDY assets test was changed to exempt farm assets for families living in "exceptional circumstances" drought affected areas who were not getting the DRP. This concession is extended until the end of the year in which the drought recovery period ends. (regulations 4 and 16 and subregulation 14.2)
C. Other changes
• The "reverse current income" rule takes account of increases in parental/spouse income of 25% or more in the financial year ending in the year of study. The rule is modified so that it does not apply to people whose increased income, despite being 25% or more, remains below the parental income test threshold plus 25%. This change ensures that low income earners are not disadvantaged. (regulations 13 and 15)
• A requirement, for the purposes of subsection 7(1) of the Act, that a student must tell the Department if he or she ceases to be an Australian citizen or a permanent resident of Australia is introduced into the regulations. (subregulation 19.2)
• Amendments to align AUSTUDY and family payment income and assets tests thresholds, and to provide the rates of living allowance, fares allowances and fringe benefit interest rates for 1996. (regulations 17, 21 and 22 and schedule 1)
• Other amendments to make a number of editorial corrections and minor clarifications to the existing AUSTUDY regulations.
The regulations commence on the date of gazettal.
Attachment A contains a more detailed explanation of the amendments.
Authority: Section 56 of the Student and Youth Assistance Act 1973
Attachment A
DETAILS OF THE AUSTUDY REGULATIONS (AMENDMENT)
The detailed explanation of the changes to the AUSTUDY regulations is set out in amending regulation order. (For example, amending Regulation 3 amends regulation 4 of the AUSTUDY regulations.) To aid understanding, the AUSTUDY provision amended and the reason for the amendment are briefly outlined. Following the outline is an explanation of the amendment.
Regulation 1 Amendment
Subregulation 1.1 provides that the AUSTUDY Regulations are amended as set our in these regulations.
These regulations commence on gazettal in accordance with section 48 of the Acts Interpretation Act 1901.
Regulation 2 Application of amendments
Subregulation 2.1 provides that the amendments to the regulations made by regulations 7, 9, 17, 21 and 22 and subregulations 14.1 and 19.2 of these regulations apply only in relation to AUSTUDY applications for a period starting on or after 1 January 1996. This application provision is necessary because the processing of student assistance applications for the year, or part of the year, commencing 1 January 1996 began in November 1995.
Regulation 3 Regulation 4 (Citizenship)
Background
Section 7 of the Student and Youth Assistance Act 1973 (the Act) provides that AUSTUDY can be paid to Australian citizens or permanent residents of Australia. "Permanent resident of Australia" is defined in subsection 3(1) of the Act as "a person who, under the regulations, is to be. treated, for the purposes of this Act, as permanently resident in Australia". Subregulation 4(1) of the AUSTUDY regulations provides that a permanent resident is a person who is accepted as a permanent resident of Australia in terms of subsection 58(2) of the Migration Act 1958. Following a rewrite of migration legislation, this is no longer correct.
Amendment
The amendment to subregulation 4(1) made by subregulation 3.1 updates the cross reference to subregulation 1.03 of the Migrant Regulations 1994 to ensure that the regulations arc accurate and that permanent residents remain eligible to get AUSTUDY.
Regulation 4 Regulation 18A (What is excluded from assets? (e) farm assets in "exceptional circumstances drought affected area")
Background
In September 1994, the Government announced a package of drought relief measures available to assist farm families living in "exceptional circumstances" drought affected areas. One measure in the package was the removal of the AUSTUDY farm assets test for families while they are living in declared "exceptional circumstances" drought affected areas and not getting a drought relief payment.
Students from families that advise the Department of Employment, Education and Training (DEET) that they are living in "exceptional circumstances" drought affected area receive, if that advice is confirmed by a state or territory Rural Assistance Scheme authority, a 100% discount for farm assets. This concession applies while the area is an "exceptional circumstances" drought affected area and for a six month recovery period thereafter.
Regulation 18A was inserted into the regulations in 1994 to provide the assets rest concession. The Government has now decided that the concession will apply until the end of the year in which the drought recovery period ends.
Amendments
The amendment to regulation 18A made by subregulation 4.1 provides that the assets test concession described above applies until the end of the yew in which a drought recovery period ends.
Subregulation 4.2 provides that "drought recovery period" means a period of six months after the day a Rural Adjustment Scheme Authority decides the area is no longer an "exceptional circumstances" drought affected area.
Regulation 5 Regulation 19 (How are business assets treated?)
Background
Regulation 10 of Statutory Rules 1993 No 367 amended regulation 19 by removing a restriction that companies and trusts had to be controlled by "family members". This placed those entities on the same footing as partnerships. Although references to control by family members were omitted, the definition of "family member" remained.
Amendment
The amendment to subregulation 19(1) made by subregulation 5.1 removes the superfluous definition of "family member".
Regulation 6 Regulation 22 (Excluded: (b) students getting certain pensions and allowances)
Background
Division 3 of the regulations provides that certain students are excluded from getting AUSTUDY. Subregulation 22(2) provides that a student cannot get AUSTUDY for a period in the year before the start of a course he or she intends to undertake if the student, or the student's spouse, gets certain benefits or allowances under the Social Security Act 1991, or the youth training allowance, at either the single or "married" rate.
The Government has progressively restructured income support arrangements to remove the notion of dependency between spouses. Accordingly, the notion of dependency between spouse is to be abolished from the regulations.
Amendments
'The amendments to subregulation 22(2) made by subregulations 6.1 and 6.2 remove the notion of dependency between spouses by omitting references to "spouse" and the "married rate".
Regulation 7 Regulation 61 (What is the maximum living allowance?)
Background
Regulation 61 provides the maximum rates of living allowance payable to students, including the independent rate, the special rate and the sole parent rate.
(a) Sole parent rate
In 1992, the AUSTUDY sole parent rate was $8,630 a year. In 1993, to align with the Sole Parent Pension which had been reduced as a result of a restructure of family payment arrangements, the sole parent rate was reduced to $7,980 a year. To avoid disadvantage to AUSTUDY clients, recipients of the higher sole parent rate in 1992 had their sole parent rate preserved at the 1992 level. Paragraph 61(ab) was added to the regulations to provide for the preserved rate which will not be paid after 1995 because it is now a lesser amount than the indexable sole parent rate. Accordingly, paragraph 61 (ab) is to be omitted.
(b) "At-home" rate for independent students
The Government announced in the 1995 Budget the introduction of an "at-home" rate for students aged 22 to 24 years who are eligible for the independent rate under AUSTUDY regulation 68 only and who live at home with their parents. Regulation 68 provides that a student qualifies as independent from his or her 22nd birthday.
The new rate is to be $20 a week less than the usual age related independent rate. Students who are eligible to get the independent rate because of their age before 1 January 1996 will continue to get that rate until the end of their course.
Amendments
(a) Sole parent rate
The amendment to regulation 61 proposed by subregulation 7.1 omits paragraph 61 (ab).
(b) "At-home" rate for independent students
The amendment to regulation 61 made by subregulation 7.2 provides the new maximum rate of living allowance for students aged 22 to 24 years who are independent under regulation 68 only and who normally live with their parents.
The amendments to regulation 61 made by subregulation 7.3 provides the maximum standard, independent and away from home rates of living allowance for 1996.
The amendments to regulation 61 made by subregulation 7.4 inserts new subregulation 61(3) to provide that "parent" means any natural or adoptive parent of the student, a spouse of the student's parent, or any other adult on whom the student is wholly or substantially dependent (except the students spouse) and that "normally lives" has the same meaning as it has in subregulation 85(4). Subregulation 7.4 also inserts new subregulation 61(4) to ensure that students who were eligible for the independent rate in relation to a course before 1 January 1996 will continue to be eligible for that rate until the end of the course.
Regulation 8 Regulation 63 (Who gets special rate living allowance?)
Background
Regulation 63 provides the special rate of living allowance which was introduced to help reduce financial disincentives for people aged 21 and over to study after receiving adult (21+) rates of Commonwealth income support.
Subparagraph 63(1)(ab)(ii) provides for the special rate to be extended to a student where the relevant income support payment was made to a former partner at the married rate.
The Government has restructured income support allowances to remove, the concept of "dependency" between spouses. Consistent with this, the notion of dependency between spouses is to be abolished from the AUSTUDY regulations.
Amendments
The amendment to regulation 63 made by subregulation 8.1 omits "partner allowance, or another allowance, benefit or payment of a kind referred to in paragraph (a) at the rate set for a married person, because the person was the spouse of the student" from subparagraph 63(1)(ab)(ii). This removes from the regulation a superfluous reference to partner allowance and the notion of dependency between spouses.
The proposed amendment also omits note 2 from regulation 63.
Regulation 9 Regulation 64 (Is them additional allowance for a spouse?)
Background
Regulation 64 provides for the payment of a Dependent Spouse Allowance (DSA) to students who have a dependent spouse and at least one dependent child.
The Government has restructured income support allowances m remove the concept of "dependency" between spouses. Consistent with this restructuring, the Government announced in the 1995 Budget that the DSA will be abolished on the basis that the dependent spouse would be able to apply for the parenting allowance in their own right
Amendment
Subregulation 9.1 gives effect to this by omitting regulation 64.
Regulation 10 Regulation 74 (Independent student: (g) unreasonable to live at home)
Background
Regulation 74 provides that a student can qualify as independent through it being unreasonable for him or her to live at home if the student does not live with his or her parents because the student's physical or mental health would be substantially at risk from domestic violence, sexual harassment, extreme family breakdown or another similar and exceptional circumstance.
The note to regulation 74 provides that "parent" for the purposes of regulation 74 is defined in subregulation 85(2). This definition is broader than is intended to apply in regulation 74 and is inconsistent with the definition that applies in relation to the youth training allowance.
Amendments
The amendments to regulation 74 made by regulation 10 clarify that "parent" in paragraphs 74(a), (b) and (c) means natural or adoptive parents.
Note 1 to regulation 74 is no longer be necessary and is omitted.
Regulation 11 Regulation 75 (Independent student: (h) refugee)
Background
Regulation 67 identifies the conditions for getting the independent rate of living allowance, one of which is "refugee" as described in regulation 75.
Subregulation 75(1) provides that a person qualifies as independent through being a refugee if the person is the holder, within the meaning of the Migration (1993) Regulations, of a Group 1.3 entry permit (permanent resident (refugee and humanitarian)). Following a rewrite of the Migration legislation, the cross reference to the Migration Regulations is no longer correct.
Amendment
The amendment to regulation 75 made by subregulation 11.1 corrects the cross reference to refer to a visa or entry permit under the Migration Act 1958 granted because the person demonstrated that he or she is a refugee or has other humanitarian needs. This is a housekeeping amendment that does not alter the effect of the provision.
Regulation 12 Regulation 85 (Whose income is taken into account?)
Background
Part 5 of the AUSTUDY regulations provides for the parental income test set out in regulations 84 to 88. Regulations 89 to 92 provide concessions to the parental income test.
Subregulation 85(1) provides that the parental income test takes account of the income of the student's parents. Subregulation 85(2) describes who is a "parent".
(a) "Spouse" in relation to a parent
Subregulation 85(2) describes a "parent" as any natural or adoptive parents with whom the student normally lives; a spouse of a student's parent if the student normally lives with the spouse; any other adult on whom the student is wholly or substantially dependent (but not the student's spouse), or the natural or adaptive parent with whom the student last lived, if the student does not live with either parent and if there is no supporting adult.
The note to regulation 85 provides that "spouse" is defined in subregulation 93(2). Subregulation 93(2) defines a "spouse" in relation to a student as a person to whom the student is married and not separated from or a person with whom the student lives in a de facto relationship. While the intention is that "spouse" in relation to a parent is a person to whom the parent is married and not separated from or a person with whom the parent lives in a de facto relationship, a separate definition of "spouse" in relation to a student's parent will the point.
(b) "Normally lives with"
The parental income test requires that the student "normally live" with their natural or adoptive parents and, as appropriate, the parent's partner. While "normally live" with is taken to mean maintain a permanent home with even though they may live away while studying, or are temporarily absent from the home on a holiday, regulation 85 is silent on this point. The proposed amendment will clarify the intention.
Amendments
The amendment to regulation 85 made by subregulation 12.1 adds new subregulation 85(3) to provide a definition of "spouse" in relation to a student's parent. Subregulation 12.1 also adds new subregulation 85(4) to clarify that "normally lives" means maintains a permanent home with despite occasionally living away from that home temporarily.
Regulation 13 Regulation 86 (What is parental income?)
Background
A dependent student's AUSTUDY entitlements is normally income tested against parental income for the financial year ending before the year of study. A "current income" concession can be applied where a substantial and long lasting fall m income occurs in the financial year ending in the year of study that would make it unreasonable to base AUSTUDY on the normal period.
AUSTUDY regulation 86 sets out what is parental income. Subregulation 86(7) provides that if parental income in the financial year ending in the year of study is at least 25% greater than parental income in the financial year ending before the year of study, then the student's entitlement will be reassessed on the increased amount. This is known as "reverse current income".
Students whose parents have incomes below the AUSTUDY income test threshold are harshly treated by this rule because an increase of 25% or more still leaves them with relatively low income.
Amendment
The amendment to regulation 86 made by subregulation 13.1 means that the "reverse current income" rule does not apply:
• where parental income for the year of study is less than the threshold figure beyond which a student cannot get the maximum living allowance; and
• where that income increases in the year by at least 25%, but the increased amount does not exceed the threshold figure plus 25%.
These regulations make a similar amendment to the spouse income test in regulation 94 (What is the spouse's income?). (See regulation 15).
Regulation 14 Regulation 91 (Concession to the parental income test: (c) pensions and allowances)
Background
Regulation 91 provides a concession to the parental income test where a student's parent gets certain income support payments.
(a) Dependent Spouse Allowance (DSA)
Paragraph 91(1)(d) provides that the parental income test is not applied while a parent gets AUSTUDY or ABSTUDY and DSA.
The Government has restructured income support allowances to remove the concept of "dependency" between spouses. Consistent with this restructuring die AUSTUDY DSA Will no longer be available. Rather, the spouse will be able to apply for parenting allowance in his or her own right.
The parental income test will not be applied while a parent receives AUSTUDY and his or her spouse also Sets parenting allowance.
(b) Drought Relief Payments Scheme (DRP)
Paragraph 91(1)(ac) provides that the parental income test is not applied while a parent gets a DRP. The DRP is paid while the family lives in an "exceptional circumstances" drought affected area and for a six month drought recovery period. The Government has decided to extend the concession to the, end of the yew in which the parent is receiving a DRP.
Amendments
(a) Dependent Spouse Allowance
The amendments to the AUSTUDY regulations made by subregulation 14.1 recasts paragraph 91(1)(d) to be consistent with the amendment to regulation 64 (see subregulation 9.1). The amendment also substitutes a reference to the parenting allowance under Chapter 2 of the Social Security Act 1991. The amendment proposed by subregulation 14.1 also recasts subparagraph 91(1)(d)(ii). The amendments do not alter the effect of the provision.
(b) Drought Relief Payment Scheme (DRP)
The amendment to subregulation 91(1) made by subregulation 14.2 provides that the concession to the parental income test applies until the end of the year in which the student's parent is receiving a DRP.
A note to advise that "spouse" in relation to a student's parent is defined in subregulation 85(3) is inserted into the regulations.
Regulation 15 Regulation 94 (What is the spouse's income?)
Background
Regulation 94 describes spouse income for the purposes of the spouse income test.
Amendment
The amendment to regulation 94 made by subregulation 15.1 limits the application of "reverse" current income to cases where the income of the student's spouse after the increase is at least 25% higher than the relevant AUSTUDY income test threshold for spouse income. This proposal mirrors the amendment made by regulation 13.
Regulation 16 Regulation 97 (Concession to the spouse's income test: (b) pensions and allowances)
Background
Regulation 97 provides that the spouse income test is not applied where the student's spouse gets a payment under the Drought Relief Payment Scheme (DRP). 'The Government has decided to extend the concession to the end of the year in which the drought recovery period ends.
Amendment
The amendment to regulation 97 made by subregulation 16.1 provides that the concession to the spouse income rest continues to apply until the end of the year in which the students spouse is receiving a DRP.
Regulation 17 Regulation 101 (How much is the fares allowance?)
Background
Regulation 99 provides that tertiary students who receive a living allowance at the away from home rate may qualify for fares allowance for travel between their parents' permanent home and the institution at which they are studying.
Amendments
The amendments to regulation 101 made by regulation 17 brings the fares allowance rates for 1996 in line with the present Commonwealth public service private vehicle rates.
Regulation 18 Regulation 108 (Insufficient information or evidence about a Student)
Background
Regulation 108 provides the Departments powers to obtain additional Information or evidence. Subregulation 108(1) provides that an authorised person may request further information or evidence from a student or another person. Subregulation 108(2) provides that the request must be in writing and must contain advice that benefits cannot commence or that benefits will cease (as the case may be) if the request is not satisfied within 14 days.
Sections 343, 344 and 345 of the Act provide that information gathering powers relating to a students entitlement to a student assistance payment are vested in the Secretary. It is appropriate to have information gathering powers contained in the Act only.
Amendments
The amendments to regulation 108 made by subregulation 18.1 repeal subregulations 108(1), (2) and (3) and substitute new subregulation 108(1) which provides that a notice under section 343 of the Act must state that a benefit cannot be paid, or that a benefit will cease, if the information requested is not given within the period of time specified in the notice.
The amendment to regulation 108 made by subregulation 18.2 is a housekeeping change to reflect the effect of the omission of subregulations 108(1), (2) and (3). It does not change the effect of the provision.
A note is added to the regulations to advise that section 347 of the Act sets out the requirements for a notice under section 343 of the Act
Regulation 19 Regulation 109 (What changes in circumstances must the Department be told about?)
Background
Subsection 7(1) of the Act provides that AUSTUDY may be granted to Australian citizens and permanent residents of Australia. Section 48 of the Act provides that if a prescribed event happens in relation to a person who is receiving, or is entitled to receive, an amount under this Act, the person must notify DEET, in accordance with the regulations, of the happening of the event within seven days. Regulation 109 contains the prescribed events for the purpose of section 48 of the Act.
It is possible for a person to cease being an Australian citizen or a permanent resident of Australia. It is not automatic in either case for DEET to be advised of a person's changed status. It is possible that an AUSTUDY recipient whose status has changed will continue to be paid AUSTUDY after they are no longer eligible. Regulation 109 does not currently require a person to notify DEET if they are no longer an Australian citizen or a permanent resident in Australia.
Amendments
The amendment to regulation 109 made by subregulation 19.1 rewords the provision to remove the reference to a specific number of days. This is a housekeeping amendment which does not change the effect of the provision.
The amendment to regulation 109 made by subregulation 19.2 adds a requirement that the student must tell DEET if he or she ceases to be an Australian citizen or a permanent resident of Australia.
A note to the regulation is added to the regulations to advise that "permanent resident of Australia" is defined in subregulation 4(2).
Regulation 20 Regulation 113 (Definitions)
Background
Subregulation 12.1 amends regulation 85 to provide a definition of "spouse" in relation to a student's parent.
Amendments
The amendment to regulation 113 made by subregulation 20.1 adds to the index the definition of "spouse", in relation to a student's parent. The amendment also clarifies that the existing "spouse" definition is "spouse", in relation to a student.
Regulation 21 Schedule 6 - (Fringe Benefits)
Background
AUSTUDY regulations 86 and 94 provide for the parental and spouse income tests respectively. Both of these tests include as income the value of fringe benefits specified in Schedule 6 to the AUSTUDY regulations.
The fringe benefits include low interest loans which are valued by comparing the actual rate of interest for the loan against a 'notional rate' as at 1 April of the fringe benefit year in accordance with clause 16 of Schedule 6.
Amendments
The amendment to Schedule 6 made by subregulation 21.1 provides the notional interest rates for the fringe benefits year commencing on 1 April 1995.
Regulation 22 Further amendments - rates and thresholds
Background
AUSTUDY is subject to income and, as appropriate, assets tests. Income and asset test thresholds and the ram of living allowance are indexed annually according to movements in the Consumer Price Index.
Amendments
The amendments to the regulations made by subregulation 22.1 provides the 1996 rates of living allowance and the income and assets tests thresholds. The rates and thresholds are set out in Schedule 1.
Regulation 23 Further amendments - references to the Student Assistance Act 1973
Background
On 1 January 1995, the Student Assistance (Youth Training Allowance) Amendment Act 1994 amended the Student Assistance Act 1973 by, among other things, altering its title to the Student and Youth Assistance Act 1973.
Amendments
The amendments to the regulations made by subregulation 23.1 removes references to the Student Assistance Act 1973 and replaces them with correct references to the Student and Youth Assistance Act 1973. The references are listed in Schedule 2.