EXPLANATORY STATEMENT
Issued by the authority of the Minister for Social Services
Social Security Act 1991
Social Security (Fares Allowance for Private Transport) Determination 2026
Purpose
The Social Security (Fares Allowance for Private Transport) Determination 2026 (the Determination) provides new rates for fares allowance under the Social Security Act 1991 (the Act), to assist eligible tertiary students with the cost of travel by private transport when they are required to study away from home.
The Determination specifies that the new fares allowance rates for travel by taxi and other vehicles are based on the rate of cents per kilometre for cars for an income year determined by the Commissioner of Taxation in a legislative instrument from time to time for taxation purposes. This provides a consistent rate for all private vehicles, regardless of their engine type, and is intended to be indexed regularly in line with the consumer price index.
Background
Fares allowance
Fares allowance is provided in Part 2.26 of the Act.
Fares allowance is paid to eligible tertiary students to cover travel costs associated with their study if they need to live away from home to study.
Fares allowance is available to certain students who are either a full-time or concessional study-load tertiary student and receiving either youth allowance, austudy payment or pensioner education supplement. This includes dependent youth allowance students and certain independent youth allowance students, students required to live away from their permanent home to study where their partner or dependent child remains at home, and external students who need to attend the educational institution where they are enrolled for a compulsory component of their course.
Fares allowance covers the cost of travel for an eligible student from their permanent home to their educational institution at the beginning of the academic year and return at the completion of study for the year. One return journey during the year is also available for some students. Fares allowance is only available for travel within Australia.
Fares allowance is normally paid for the least expensive mode of public transport that is reasonable, in accordance with section 1061ZAAJ of the Act.
However, section 1061ZAAK provides for fares allowance for private transport. If the Secretary is satisfied that it is not practicable for the person to make any part of the journey by public transport, the amount of fares allowance for the entire journey is worked out using section 1061ZAAK (subsection 1061ZAAK(1)). Further, if the Secretary is satisfied that it is not practicable for the person to make a part of the journey by public transport, the amount of fares allowance for that part of the journey is worked out using section 1061ZAAK (subsection 1061ZAAK(2)).
The term “public transport” does not include a taxi (subsection 19A(2) of the Act). Accordingly, section 1061ZAAK generally applies to determine fares allowance rates for journeys made by students by taxi (subsection 1061ZAAK(3)), or another vehicle (subsection 1061ZAAK(4)). Such “another vehicle” may be the student’s own private car or their parents’ car, for example.
Fares allowance rates
The rate of fares allowance for taxi journeys is specified in subsection 1061ZAAK(3) of the Act at 63 cents per kilometre. This amount does not reflect the contemporary costs of travel by taxi.
Subsection 1061ZAAK(4) provides a table which specifies the rate of fares allowance for other vehicles. The rate depends on the kind of engine in the vehicle used, and the capacity of the vehicle’s engine, and is either 50, 60 or 61 cents per kilometre. The specified rates were last updated with effect from 1 January 2003, and are not aligned with the current costs of travel by private vehicle. Further, the table in subsection 1061ZAAK(4) does not provide for travel by electric or hybrid vehicles, which may also be used by students travelling in Australia.
Under subsection 1061ZAAK(8) of the Act, the Minister may vary the rate for taxi journeys in subsection 1061ZAAK(3), or amend the table, or omit and substitute another table, in subsection 1061ZAAK(4) in relation to the rates for journeys by other vehicles.
New fares allowance rates
The Determination updates the fares allowance rates for travel by taxi and other vehicles by linking these to the relevant rate of cents by kilometre for cars for an income year determined by the Commissioner of Taxation (or their delegate) for taxation purposes.
This determination is made by legislative instrument under subsection 28-25(4) of the Income Tax Assessment Act 1997, for the purposes of subsection 28-25(1) of that Act. Subsection 28-24(4) provides that the Commissioner may, by legislative instrument, determine rates of cents per kilometre for cars for an income year. This relates to calculating tax deductions for car expenses using the “cents per kilometre” method. This rate does not depend on the type of engine, and applies to petrol, electric and hybrid vehicles.
The current instrument, the Income Tax Assessment (Cents per Kilometre Deduction Rate for Car Expenses) Determination 2024 (2024 Income Tax Determination), specifies that the rate of cents by kilometre for cars for income years commencing on or after 1 July 2024 is 88 cents per kilometre. In general, a new instrument is made by the Commissioner of Taxation prior to a new income year to repeal the previous instrument and determine a new rate which is indexed according to the private motoring index of the consumer price index.
The Determination relies on paragraph 14(1)(a) of the Legislation Act 2003, which provides that unless the contrary intention appears, a legislative instrument may make provision in relation to a matter by applying, adopting or incorporating the provisions of an Act or a disallowable legislative instrument, as in force from time to time. The Determination applies the determination made by the Commissioner of Taxation under subsection 28-25(4) of the Income Tax Assessment Act 1997, as in force from time to time, for the purposes of sections 4 and 5 of the Determination. The determination made by the Commissioner of Taxation is a disallowable legislative instrument for the purposes of the Legislation Act 2003. The current instrument, the 2024 Income Tax Determination and any subsequent legislative instrument made by the Commissioner of Taxation under subsection 28-25(4), are publicly and freely accessible on the Federal Register of Legislation (www.legislation.gov.au).
It is intended that the fares allowances rates for journeys or parts of journeys by taxi under subsection 1061ZAAK(3) of the Act, and other vehicles under subsection 1061ZAAK(4) of the Act, are worked out by applying the relevant rate determined by the Commissioner of Taxation for the income year under subsection 28-25(4) of the Income Tax Assessment Act 1997, and will update from time to time when the Commissioner determines a new rate for an income year for that purpose.
This means that from the commencement of this Determination, the applicable fares allowance rate will depend on the rate determined by the Commissioner for the relevant income year that is in force at the time the relevant journey is undertaken for fares allowance purposes. As a new instrument was not made by the Commissioner of Taxation in 2025, the 2024 Income Tax Determination will initially apply to determine the fares allowance rate for relevant journeys undertaken from the commencement of this Determination, for the relevant income years to which the 2024 Income Tax Determination applies.
This means that the current specified rate of 88 cents per kilometre, determined under the 2024 Determination, is the new rate of fares allowance for travel by taxi and other vehicles under subsections 1061ZAAK(3) and 1061ZAAK(4) respectively, from the commencement of the Determination. This is significantly higher than the previous fares allowance rates specified in these provisions, and will apply consistently for taxis and all other private vehicles.
Authority
The Determination is made under subsection 1061ZAAK(8) of the Act, which provides that the Minister may, by legislative instrument, make determinations varying the fares allowance rate for taxi journeys in subsection 1061ZAAK(3), or amending the table, or omitting and substituting another table, in subsection 1061ZAAK(4) in relation to the rates for journeys by other vehicles.
The Determination is a legislative instrument for the purposes of the Legislation Act 2003 and is subject to disallowance in accordance with section 42 of that Act.
Commencement
The Determination commences on the day after it is registered on the Federal Register of Legislation.
Consultation
The Department of Social Services consulted with the Department of the Treasury and the Australian Taxation Office on the text of the Determination. These agencies supported the Determination.
The Department of Social Services consulted with Services Australia and the Department of Veterans’ Affairs on the intention to make the Determination. These agencies supported the Determination.
The Department of Social Services did not consult with social security recipients likely to be affected by the Determination, given it is beneficial in nature.
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 (Fares Allowance for Private Transport) Determination 2026
Section 1 – Name
This section states how the instrument is to be cited, that is, as the Social Security (Fares Allowance for Private Transport) 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 1061ZAAK(8) of the Social Security Act 1991.
Section 4 – Fares allowance for travel by taxi
This section varies the amount of fares allowance for journeys or parts of journeys by taxi, for the purposes of subsection 1061ZAAK(3) of the Act. The new amount is determined as the rate of cents per kilometre for cars for an income year, as determined by the Commissioner of Taxation under subsection 28-25(4) of the Income Tax Assessment Act 1997. This rate is determined by the Commissioner by legislative instrument made under that provision, and will vary from time to time depending on when a new instrument is in force.
Section 5 – Fares allowance for travel by another vehicle
Section 5 omits the table from subsection 1061ZAAK(4) of the Act and substitutes a new table to specify the rate of fares allowance for journeys or parts of journeys by other private vehicles (excluding taxis).
As with the rate determined by section 4 above, the new table in subsection 1061ZAAK(4) provides that the rate of fares allowance for travel by all other vehicles (excluding taxis) is the rate of cents per kilometre for cars for an income year determined by the Commissioner of Taxation under subsection 28-25(4) of the Income Tax Assessment Act 1997. This rate is determined by the Commissioner by legislative instrument made under that provision, and will vary from time to time depending on when a new instrument is in force.
It is intended that the fares allowance rates under subsection 1061ZAAK(3) and 1061ZAAK(4) will be increased to the current rate of 88 cents per kilometre, as determined by the Commissioner, from the commencement of the Determination until such time as a new rate applies in accordance with a new determination made by the Commissioner.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Social Security Act 1991
Social Security (Fares Allowance for Private Transport) Determination 2026
The Social Security (Fares Allowance for Private Transport) 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 (Fares Allowance for Private Transport) Determination 2026 (the Determination) provides new rates for fares allowance, to assist eligible tertiary students with the cost of travel by private transport when they are required to study away from home.
The Determination specifies that the new fares allowance rates for travel by taxi and other vehicles are based on the rate of cents per kilometre for cars for an income year determined by the Commissioner of Taxation from time to time for taxation purposes. This provides a consistent rate for all private vehicles, regardless of their engine type, and is intended to be indexed regularly in line with the consumer price index.
Human rights implications
The Determination engages the right to education, the right to social security and the right to an adequate standard of living.
Right to education
The Determination engages the right to education contained in Article 13 of the International Covenant on Economic, Social and Cultural Rights (ICESCR). Article 13 recognises the important personal, societal, economic and intellectual benefits of education. Article 13 also provides the 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 updates fares allowance rates for travel by private transport to assist eligible students who are required to study away from home. As this supports students to access education, the Determination is compatible with the right to education.
Right to social security and right to an adequate standard of living
Article 9 of the 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 11 of the ICESCR recognises the right to an adequate standard of living, which provides that everyone is entitled to adequate food, clothing and housing and to the continuous improvement of living conditions.
The Determination is beneficial to students by providing updated fares allowance rates to assist eligible students with the costs of travel when they are required to study away from home. The Determination also provides for consistent rates for travel by all private vehicles, including electric and hybrid vehicles. As the Determination provides further support for students in the form of social security payments, as well as an adequate standard of living by being supported to study away from home where required, the Determination is compatible with these human rights.
Conclusion
The Determination is compatible with human rights as it supports the right to education, the right to social security and the right to an adequate standard of living.
The Hon Tanya Plibersek MP, Minister for Social Services