Social Security and Student Assistance (Student Start-up Loan Debts and ABSTUDY Student Start-up Loan Overpayments) Determination 2026

EXPLANATORY STATEMENT

Issued by the authority of the Minister for Social Services

Social Security Act 1991

Student Assistance Act 1973

Social Security and Student Assistance (Student Start-up Loan Debts and ABSTUDY Student Start-up Loan Overpayments) Determination 2026

Purpose

The Social Security and Student Assistance (Student Start-up Loan Debts and ABSTUDY Student Start-up Loan Overpayments) Determination 2026 (the Determination) sets out circumstances in which:

an amount of a student start-up loan is a debt due to the Commonwealth under the Social Security Act 1991 (Social Security Act), for youth allowance and austudy payment purposes; and
an amount of an ABSTUDY student start-up loan is an ABSTUDY student start-up loan overpayment under the Student Assistance Act 1973 (Student Assistance Act).

Such a debt or overpayment will arise if, among other things, the circumstances determined by the Minister in a legislative instrument apply to the person (see paragraph 1223ABF(1)(b) and subsection 1223ABF(2) of the Social Security Act and paragraph 38A(1)(b) and subsection 38A(2) of the Student Assistance Act). The Determination determines those circumstances.

Broadly, a student start-up loan is treated as an income-contingent loan only if the person remains in their course for 35 days after being qualified for the loan or after the commencement of their course, whichever is later. The person is to meet the relevant youth allowance, austudy or ABSTUDY study requirements at the end of the relevant 35-day period to retain the benefit of the loan. For youth allowance and ABSTUDY recipients, this means undertaking full-time study. For austudy recipients, this means undertaking qualifying study.

The purpose of the Determination is to ensure that student start-up loans are targeted to people who have a genuine commitment to continuing their study.

Background

A student start-up loan is a loan provided to qualifying students under the Social Security Act or the Student Assistance Act, that is required to be repaid. Student start-up loans aim to increase participation in higher education by assisting students with the costs of commencing study, including the purchase of textbooks, computers and internet access.

A student start-up loan may be paid to students receiving youth allowance (student), austudy or ABSTUDY up to twice per calendar year. Students are able to apply for the loan on a voluntary basis. The loans are repayable under the same arrangements as Higher Education Loan Program debts. This means that while the loans are interest free, they are subject to indexation. Students are only required to begin repaying their loan once their earnings are above the repayment threshold.

Section 1061ZVDA of the Social Security Act and section 8B of the Student Assistance Act provide for student start-up loan debts and overpayments (respectively), if the person is paid a student start-up loan for a qualification period. However, where the requirements in section 1223ABF of the Social Security Act or section 38A of the Student Assistance Act are met, the amount of the loan is a debt or overpayment due to the Commonwealth under that provision, rather than an income-contingent student start-up loan debt under section 1061ZVDA of the Social Security Act or ABSTUDY student start-up loan debt under section 8B of the Student Assistance Act. Specific carve-outs in both of these provisions allow for the separate operation of section 1223ABF of the Social Security Act and section 38A of the Student Assistance Act, when a person is paid the amount of a student start-up loan to which they were not qualified, or they have ceased to be qualified for that loan, in relation to the study requirements.

In accordance with subsection 1223ABF(1) of the Social Security Act and subsection 38A(1) of the Student Assistance Act, the loan amount paid will be a recoverable debt or overpayment where the circumstances determined by the Minister under subsection 1223ABF(2) of the Social Security Act or subsection 38A(2) of the Student Assistance Act are satisfied. These provisions enable the Minister to determine circumstances, by legislative instrument, in which subsection 1223ABF(1) or subsection 38A(1) applies to a person who has not met, or who has ceased to meet, the relevant condition relating to student start-up loan qualification in subparagraph 1061ZVBB(1)(a)(iii) (youth allowance) or 1061ZVBB(2)(a)(iii) (austudy payment) of the Social Security Act, or subparagraph 7C(1)(iii) of the Student Assistance Act in relation to ABSTUDY. These conditions require the person to be qualified for youth allowance, austudy payment or ABSTUDY living allowance on the basis of undertaking relevant study requirements, including in relation to study load, and where the relevant course of education is an approved scholarship course.

For the purposes of the Determination, the circumstances in which a person will incur a debt are if:

they are not undertaking the relevant study load for their payment in an approved scholarship course 35 days after their qualification test day or course start date for a qualification period, whichever is later, or
their qualification test day is within 35 days of the course end date and they are not enrolled in the approved scholarship course on the course end date.

For youth allowance (students), recipients should be undertaking at least three-quarters of the normal amount of full-time study in respect of the course or in certain circumstances, undertaking at least two-thirds of the normal amount of full-time study in respect of their course (see subparagraphs 1061ZVBB(1)(a)(iii) and 540(1)(a)(i) and section 541B of the Social Security Act). For austudy payment, recipients should be a full-time or concessional study-load student in respect of their course (see subparagraph 1061ZVBB(2)(a)(iii), subsection 569(1) and section 569A of the Social Security Act). For ABSTUDY allowance recipients, recipients should be undertaking full-time study in respect of their course (see subparagraph 7C(1)(a)(iii) of the Student Assistance Act).

A person’s qualification test day for a qualification period is the earliest of the following (see subsection 1061ZVBB(3) of the Social Security Act and subsection 7C(2) of the Student Assistance Act):

the day the Secretary determines their claim
the last day of the approved scholarship course - if the course ends in the qualification period, or
the last day of the qualification period (30 June or 31 December).

The current legislative instrument, the Student Start-up Loan Debts and ABSTUDY Student Start-up Loan Overpayments Determination 2016, is due to sunset on 1 April 2026. The Determination repeals and remakes the previous determination in substantially the same terms. It clarifies the policy intention that a person should only receive a student start-up loan if they are undertaking the appropriate study requirements, including in relation to study load.

Authority

The Determination is made under subsection 1223ABF(2) of the Social Security Act and subsection 38A(2) of the Student Assistance Act. These provisions provide that the Minister may determine the circumstances in which an amount of a student start up loan is a debt due to the Commonwealth or an ABSTUDY student start-up loan overpayment.

Subsection 33(3) of the Acts Interpretation Act 1901 provides that where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend or vary any such instrument. The Minister has the power under subsection 1223ABF(2) of the Social Security Act and subsection 38A(2) of the Student Assistance Act to repeal the 2016 Determination and make the Determination.

The Determination is a legislative instrument for the purposes of the Legislation Act 2003 and is subject to disallowance.

Commencement

The Determination commences on the day after it is registered on the Federal Register of Legislation.

Consultation

The Department of Social Services consulted Services Australia on the text of the Determination because of the impacts on social security and ABSTUDY recipients. Services Australia supported the Determination.

The Department of Social Services did not consult with social security and ABSTUDY recipients likely to be affected by the Determination, given the Determination has been revised and serves the same purpose as the 2016 Determination. It confirms the policy intention that a person should only receive a student start-up loan if they are undertaking the appropriate study requirements for their payment.

Impact analysis

The Office of Impact Analysis advised that the Department of Social Services was able to self-assess and certify the Determination as operating effectively and efficiently, in lieu of an Impact Analysis for remaking the Determination with only minor amendments. That certification letter and process will be published on the Office of Impact Analysis’ website, consistent with the Government's requirements for sunsetting legislative instruments.

Availability of independent review

A decision made under the social security law, as informed by the Determination, is subject to internal and external review under Parts 4 and 4A of the Social Security (Administration) Act 1999.

Explanation of the provisions

Details of the Social Security and Student Assistance (Student Start-up Loan Debts and ABSTUDY Student Start-up Loan Overpayments) Determination 2026

Section 1 – Name

This section states how the instrument is to be cited, that is, as the Social Security and Student Assistance (Student Start-up Loan Debts and ABSTUDY Student Start-up Loan Overpayments) Determination 2026.

Section 2 - Commencement

This section provides that the Determination commences on the day after it is registered.

Section 3 - Authority

This section provides that the Determination is made under subsection 1223ABF(2) of the Social Security Act 1991 (Social Security Act) and subsection 38A(2) of the Student Assistance Act 1973 (Student Assistance Act).

Section 4 - Schedules

This section provides that each instrument that is specified in a Schedule to the instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms.

Schedule 1 repeals the Student Start-up Loan Debts and ABSTUDY Student Start-up Loan Overpayments Determination 2016 (see below).

Section 5 - Definitions

Section 5 defines terms that are used in the Determination.

Section 6 – Student start-up loan debts

Section 6 sets out circumstances for the purposes of subsection 1223ABF(1) of the Social Security Act. Section 1223ABF provides for social security debts in respect of student start-up loans. If a person is paid a student start-up loan for a qualification period and the circumstances set out in section 6 of the Determination apply to the person, then the amount of the loan is a debt due to the Commonwealth and the debt is taken to have arisen when the person was paid the loan.

Subsection 6(1) provides that subsection 1223ABF(1) of the Social Security Act applies to a person if the person is not undertaking full-time study (for youth allowance purposes, see section 541B of the Social Security Act) or qualifying study (for austudy payment purposes, see section 569A of the Social Security Act) in an approved scholarship course at the end of 35 days after the later of:

the person’s qualification test day for a qualification period; and
the person’s course start day in a qualification period.

Approved scholarship course is defined in section 592M of the Social Security Act. A qualification period is the 6 months that starts on either 1 January or 1 July in any year (see section 19AA of the Social Security Act).

Subsection 1061ZVBB(3) of the Social Security Act provides that a person’s qualification test day for a qualification period is the earliest of the following:

the day the Secretary determines the person’s claim for a student start-up loan for the qualification period,
if the approved scholarship course ends in the qualification period – the last day of the approved scholarship course, or
the last day of the qualification period.

If a person’s course starts in a qualification period (for example, the first semester of the first year of a three-year course), then the person’s course start day for the purpose of subsection 6(1) of the Determination will be the first day of the course. If a person continues a course in a qualification period (for example, the second semester of the second year of a three-year course), then the course start day for the purpose of subsection 6(1) of the Determination will be the day the course continues in that semester.

The effect of subsection 6(1) is that if a person’s claim for student start-up loan is granted before the person’s course start day for the relevant semester, then the person must meet the “undertaking full-time study” or “undertaking qualifying study” requirements (as applicable) for their course for 35 days after that course start day, otherwise the person will owe a debt to the Commonwealth for the amount of the student start-up loan. However, if a person’s claim for a student start-up loan was determined after the person’s course start day for the relevant semester, then the person must meet the “undertaking full-time study” or “undertaking qualifying study” requirements (as applicable) for their course for 35 days after the day the claim was determined, otherwise the person will owe a debt to the Commonwealth for the amount of the student start-up loan.

Example 1

Person A enrols in a Bachelor of Arts course as a first-year student in 2027. Person A is granted a student start-up loan on 21 February 2027. Person A’s course start day is 1 March 2027. Person A decides they no longer wish to continue with their Bachelor of Arts course and cease to be enrolled in that course on 30 March 2027. Person A does not enrol in another approved scholarship course. Person A owes a debt to the Commonwealth for the amount of the student start-up loan because they are not enrolled in an approved scholarship course at the end of 35 days after their course start day.

Example 2

Person B is a second-year student of a Bachelor of Science course. Their course start day for the second semester of the second year of that course is 28 July 2026. Person B is granted a student start-up loan on 10 August 2026. Person B decides they no longer wish to continue with a Bachelor of Science course and ceases to be enrolled in that course on 22 August 2026. Person B does not enrol in another approved scholarship course. Person B owes a debt to the Commonwealth for the amount of the student start-up loan because they are not enrolled in an approved scholarship course at the end of 35 days after their qualification test day. Person B’s qualification test day is the day their student start-up loan was granted (10 August 2026).

Example 3

Person C is a first-year student of a Bachelor of Arts course. Person C is a youth allowance (student) recipient and is granted a student start-up loan on 21 February 2027. Person C’s course start day is 1 March 2027. Person C reduces their study load from full-time to part-time on 30 March 2027 and ceases to qualify for youth allowance (student). Person C owes a debt to the Commonwealth for the amount of the student start-up loan because they are not undertaking full-time study in an approved scholarship course at the end of 35 days after their course start day.

Subsection 6(2) of the Determination provides for circumstances in which subsection 6(1) does not apply. The first circumstance is where the person’s qualification test day is the day the Secretary determines the person’s claim for a student start-up loan and the person completes the relevant approved scholarship course less than 35 days after that qualification test day. The second circumstance is where the person’s qualification test day is the last day of the approved scholarship course.

The effect of subsection 6(2) is that such a person will not owe a debt to the Commonwealth under section 1223ABF of the Social Security Act for the amount of the student start-up loan if the person completes the course in the qualification period before they are granted a loan for the qualification period. Instead, such a person would incur an income contingent student start-up loan for the amount of the loan received in respect of that last semester of study.

Subsection 6(3) of the Determination sets out a further circumstance in which subsection 1223ABF(1) of the Social Security Act applies to a person. The circumstance is where:

the person’s qualification test day is the day the Secretary determines the person’s claim for a student start-up loan; and
that qualification test day is less than 35 days before the person is expected to complete the relevant approved scholarship course; and
the person is not enrolled in the relevant approved scholarship course on the day that course ends.

Subsection 6(3) ensures that a person will owe a debt to the Commonwealth under section 1223ABF of the Social Security Act for an amount of a student start-up loan granted towards the end of a last semester of study if the person does not complete the course.

Example 4

Person D applies for a student start-up loan in their last semester of study. Their claim is determined on 9 November 2026, 10 days before their course is due to end on 19 November 2026. On 13 November 2026, Person D ceases to be enrolled in their course. As Person D did not remain enrolled in their course until the course end day, they owe a debt to the Commonwealth for the amount of the student start-up loan.

Example 5

Person E applies for a student start-up loan in their last semester of study. Their claim is determined on 10 October 2026, 10 days before their course is expected to end on 20 October 2026. However, Person E has an extension on their final assignment until 5 December 2026. Person E ceases to be enrolled in their course on 1 December 2026. As Person E did not remain enrolled in their course on the day the course ended (5 December 2026), they owe a debt to the Commonwealth for the amount of the loan.

Subsection 6(4) of the Determination defines the terms used in section 6. These terms are defined as having the same meaning as in specified provisions in the Social Security Act.

Section 7 - ABSTUDY student start-up loan overpayments

Section 7 is similar to the operation of section 6 but with respect to the circumstances that an amount of ABSTUDY student start-up is an ABSTUDY student start-loan overpayment for the purposes of section 38A of the Student Assistance Act.

Subsection 7(4) of the Determination defines the terms used in section 7. These terms are defined as having the same meaning as in subsection 3(1) of the Student Assistance Act.

However, the term “undertaking full-time study”, as used in subsection 7(1) of the Determination, is not defined in the Student Assistance Act. Further, the meaning of this term in the Social Security Act does not apply, as this is only relevant for the purposes of youth allowance (student) and not ABSTUDY.

Subparagraph 7C(1)(a)(iii) of the Student Assistance Act, which outlines the qualification criteria for an ABSTUDY student-start up loan, states that a person must be qualified for ABSTUDY living allowance because they are “undertaking full-time study in a course of education that is an approved scholarship course”. In subsection 7(1) of the Determination, the term “undertaking full-time study” is intended to be consistent with this criteria, and refer to a student who is qualified for ABSTUDY living allowance on the basis that they are undertaking full-time study, as that term is used in relation to ABSTUDY student start-up loans in the ABSTUDY Policy Manual.

Schedule 1 – Repeals

Item 1

Item 1 repeals the whole of the Student Start-up Loan Debts and ABSTUDY Student Start-up Loan Overpayments Determination 2016. The Determination remakes this sunsetting instrument in substantially the same terms.

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Social Security and Student Assistance (Student Start-up Loan Debts and ABSTUDY Student Start-up Loan Overpayments) Determination 2026

The Social Security and Student Assistance (Student Start-up Loan Debts and ABSTUDY Student Start-up Loan Overpayments) Determination 2026 (the Determination) is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The Social Security and Student Assistance (Student Start-up Loan Debts and ABSTUDY Student Start-up Loan Overpayments) Determination 2026 (the Determination) sets out circumstances in which:

an amount of a student start-up loan is a debt due to the Commonwealth under the Social Security Act 1991 (Social Security Act), for youth allowance and austudy payment purposes; and
an amount of an ABSTUDY student start-up loan is an ABSTUDY student start-up loan overpayment under the Student Assistance Act 1973 (Student Assistance Act).

The purpose of the Determination is to ensure that student start-up loans are targeted to people who have a genuine commitment to continuing their study.

Human rights implications

The Determination engages the right to social security and the right to education.

Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) recognises the right to social security and requires a social security scheme to be established under domestic law that provides a minimum essential level of benefits to all individuals and families that will enable them to cover essential living costs.

Article 13 of the ICESCR recognises the right of everyone to education. Article 13 recognises the important personal, societal, economic and intellectual benefits of education. Article 13 also provides that secondary education in all its different forms, including higher education, shall be made generally available and accessible to all by every appropriate means.

The Determination will only have effect where a person undertaking the relevant study requirements is granted a student start-up loan or ABSTUDY student start-up loan and they do not meet the specified study timeframes. The purpose of these requirements is to ensure that the loans are targeted to people who have a genuine commitment to continuing their study. As the purpose of the student start-up loan is to assist people with the up-front costs of study, such as textbooks, equipment and stationery, the Determination helps to ensure that people remain in study.

Where students do not continue to study an approved scholarship course according to their relevant study requirements, including study load, for the required timeframe, a debt to the Commonwealth or overpayment will be raised for the amount of the student start-up loan.

The Determination ensures the sustainability of the social security and student assistance system. It does not add any further restraints to a person’s ability to access payments such as youth allowance (student), austudy payment or ABSTUDY.

Conclusion

The Determination is compatible with human rights as it does not limit or interfere with the right to social security and the right to education. To the extent the Determination engages or limits these rights, this is for a legitimate objective and is reasonable, necessary and proportionate.

The Hon Tanya Plibersek MP

Minister for Social Services

Administered by Department of Social Services

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