EXPLANATORY STATEMENT
Issued by the authority of the Minister for Employment and Education Services
STATUTORY RULES NO. 346
STUDENT ASSISTANCE REGULATIONS (AMENDMENT)
Legislative authority
1. The Student Assistance Act 1973 (the Act) and the Student Assistance Regulations (the Principal Regulations) provide the legislative authority for the AUSTUDY scheme and for Post-graduate Awards.
2. Section 36 of the Act provides that the Governor-General may make regulations for the purposes of the Act.
Outline of changes
3. The present Statutory Rules make the following changes to AUSTUDY arising out of the 1988 Budget context:
• increase the maximum rates of living allowance, including new rates aligned with full adult unemployment benefit
(new regulations 29AA(3) and (5))
• increase the threshold for the spouse’s/parental income tests
(amendments to regulations 41(3AB) and 42(6)(b))
• increase the threshold for the student’s income test
(new regulation 29AA(2))
• introduce an assets test
(new regulation 42B)
• provide that a student qualifies as independent if he or she has a dependent child
(new regulation 30(1)(c))
• modify the income test for the dependent spouse allowance to apply on a tapered basis to the spouse’s income over periods of up to the whole year of study, rather than on a “sudden death” basis to weekly income
(new regulation 41(5))
• remove the entitlement to the dependent child deduction where a child also attracts the sibling concession
(amendments to regulation 42(7))
• provide that the income test is to apply to overseas income taxable in a foreign country (amendment to the definition of “income” in regulation 29(1))
• provide that New Zealand students need to have permanently settled in Australia and to have been continuously in Australia for at least six months to qualify for AUSTUDY
(new regulations 5(b), 33C)
• integrate into AUSTUDY the Assistance for Isolated Children boarding allowance for students aged 16 and over
(new regulations 31, 42(2)(aa))
• provide that previous studies do not affect eligibility while undertaking an English as a Second Language course, and that studies in an ESL course do not affect eligibility to receive benefits for subsequent studies
(new subregulation 29(5) and amendment to regulation 34D)
• discontinue the availability of AUSTUDY for students in the generality of non-government business colleges
(amendment to Schedule 3, regulation 22 of the present Statutory Rules).
Commencement
4. All the amendments commence on 1 January 1989.
Details of amendments
5. Details of the amendments are attached.
DETAILS OF AMENDMENTS
Regulation 1: Commencement
6. Regulation 1 provides that all the amendments come into operation on 1 January 1989.
Regulation 2: Principal Regulations
7. The Student Assistance Regulations are referred to as the “Principal Regulations”.
Regulation 3: Interpretation
8. Regulation 3 amends regulation 5 of the Principal Regulations, which defines “permanent resident of Australia”.
9. Paragraph 5(a) defines a permanent resident by reference to section 14A(2) of the Migration Act 1958. (Section 14A(2) defines “permanent resident” as a person whose continued presence in Australia is not subject to any limitation as to time imposed by law, other than a prohibited immigrant or a prohibited non-citizen.) However, paragraph 5(a) does not apply to people who are regarded as permanent residents under the Migration Act solely because section 8(1) of that Act exempts them from having an entry permit.
10. Paragraph 5(b) adds that people who would qualify as permanent residents solely because they are exempt under section 8(1)(e) may be regarded as permanent residents if they have permanently settled in Australia. This provision generally applies only to New Zealand citizens.
Regulation 4: Division 1 - Interpretation: Part III
11. Regulation 4 makes a drafting change, creating a new Division in Part III of the Regulations headed “Division 1 - Interpretation: Part III”. The effect is to move the interpretation provisions of Part III from the present “Grant of Education Assistance” Division to a new “Interpretation: Part III” Division.
12. The present heading of Division 1, “Grant of Education Assistance” is transferred to the new Division 1A: see regulation 8 of the present Statutory Rules.
Regulation 5: Interpretation
13. Regulation 5 amends regulation 29, which defines expressions used in Part III of the Regulations.
14. Paragraph 5(a) omits the existing definition of a spouse’s or parent’s income and substitutes a new definition in its place. The new definition adds a provision, subparagraph (b) (iii), which includes income that is derived and is taxable overseas.
15. Paragraph 5(b) inserts a definition of “ESL course”, i.e. a course in English as a Second Language. The definition does not include courses in how to teach English as a Second Language, although these are sometimes referred to as ESL courses. The expression “ESL course” is used in the new regulations 29(5), 29AA(5)(b) and in the amendment to existing regulation 34D.
16. Paragraph 5(b) also inserts a definition of “year 9 level”, replacing the definition which regulation 12 of the present Statutory Rules omits from regulation 34E of the Principal Regulations.
17. Paragraph 5(c) repeals regulations 29(5) to (9) of the Principal Regulations. These provisions are replaced by the new regulation 29AA, inserted by regulation 6 of the present Statutory Rules.
18. Paragraph 5(c) also inserts two new provisions, subregulations 29(5) and (6).
19. The new regulation 29(5) provides that an ESL course is to be classified as year 9 level. This has the effect that regulation 34E of the Principal Regulations does not make an adult secondary student ineligible to receive AUSTUDY while undertaking an ESL course because of his or her previous studies in another course. (Regulation 5(b) of the present Statutory Rules inserts a definition of “ESL course”.)
20. The new regulation 29(6) provides that a person cannot claim a child as a dependant solely because he or she pays maintenance for the child. This is important in view of the new provisions assisting a single student who has a dependent child: see new regulations 29AA(5) (a) (iv) and 30(1) (c).
Regulation 6
21. Regulation 6 inserts a new provision, regulation 29AA, which defines expressions used in the income test provisions (the present regulations 41 and 42). The new regulation incorporates the provisions of the former subregulations 29(5) to 29(9), as modified to increase the existing maximum living allowance levels, to provide for two new living allowance rates, and to increase the threshold for the income test on a student’s own income.
Regulation 29AA: Interpretation - living allowance
22. Subregulation 29AA(1) defines “prescribed margin”, replacing the definition in the previous regulation 29(5).
No living allowance is payable if a student qualifies for less than the prescribed margin. The prescribed margin is $50 where the “relevant period” is co-extensive with the year of study and proportionately less if it is not (“relevant period” is defined in existing regulation 29(1); “C” and “D” are defined in new regulation 29AA(5)).
23. Subregulation 29AA(2) defines “prescribed allowable income”, the threshold for the income test applied to a student’s personal income. The new definition replaces the definition in the previous regulation 29(6).
24. The prescribed allowable income is increased from $2,000 to $3,000 where the “relevant period” is co-extensive with the year of study; in other cases, the prescribed allowable income is proportional to the duration of the relevant period. (“Relevant period” is defined in existing regulation 29(1); “C” and “D” are defined in new regulation 29AA(5).)
25. Subregulation 29AA(3) defines “prescribed proportion P” (the maximum living allowance for the independent and away-from-home rates) and “prescribed proportion Q” (the maximum living allowance for the at-home rate). It replaces the definitions in the previous regulation 29(7). Prescribed proportions P and Q are defined in relation to amounts A and B respectively: these expressions are defined in the new regulation 29AA(5).
26. Subregulation 29AA(4) defines “prescribed quantum of educational assistance”, replacing the definition in the previous regulation 29(8). A student’s educational assistance (other than AUSTUDY) up to the prescribed quantum is included in the general income test on the student’s income; the student’s entitlement is reduced by any educational assistance in excess of this level. The prescribed quantum is $500 where the “relevant period” is co-extensive with the year of study and proportionately less if it is not. (“Relevant period” is defined in existing regulation 29(1); “C” and “D” are defined in new regulation 29AA(5).)
27. Subregulation 29AA(5) defines expressions used in the new subregulations 29AA(1) to (4). It replaces the former subregulation 29(9).
28. Paragraph 29AAC5)(a) defines “A”, which sets the maximum annual allowance for the independent and away-from-home rates. The rate for under 18 year olds is increased from $3,974 pa to $4,244 pa, and the rate for 18 and over is increased from $4,768 pa to $5,094 pa. Two new rates are provided for: $6,049 pa for students undertaking ESL courses, students aged 21 and over who have been long-term Social Security recipients, and students with dependants; $7,104 for single students supporting a natural or adopted child.
29. Paragraph 29AA(5)(b) defines “B”, which sets the maximum annual allowance for the at-home rate. The rate for under 18 year olds is increased from $2,614 pa to $2,792 pa, and the rate for students aged 18 and over is increased from $3,137 pa to $3,353 pa. A new rate is provided for: $3,979 pa for students undertaking ESL courses and students aged 21 or over who have been long-term Social Security recipients. (No rate is provided for single students supporting a child as such students qualify as independent: see new regulation 30(1)(c).)
30. Paragraphs 29AA(5) (c) and (d) define “C” and “D as the number of days in the relevant period and the relevant year respectively. These expressions are defined in regulation 29(1) of the Principal Regulations.
31. Subregulation 29AA(6) defines the expression “qualified” used in subregulation 29AA(5). The expression refers to long-term Social Security recipients.
32. To be “qualified”, a student needs to have been 21 or older when he or she first commenced his or her current course of study, not merely be 21 when recommencing the course in the year for which the application is made.
33. Subregulation 29AA(7) provides that, in determining whether a person has been a long term Social Security recipient, account is to be taken of the period when a person had lodged a claim for unemployment benefit but payments had not yet commenced.
34. Subregulation 29AA(8) provides that a “qualified” student retains that classification for the remainder of his or her course, i.e. the student continues to receive benefits at the higher rate. This concession ceases to apply if the student discontinues the course, whether temporarily or not.
35. Subregulation 29AA(9) defines the expression “dependant” used in paragraph 29AA(5)(a)(iii). The expression refers to a dependent spouse for whom the dependent spouse allowance is payable, or a dependent child (unless the student’s spouse receives a higher rate of AUSTUDY or Aboriginal Study Assistance on account of the child).
Regulation 7: Independent status
36. Regulation 7 amends regulation 30 of the Principal Regulations, which lists the grounds for qualifying as independent. The amendment provides that a student may qualify as independent if he or she has a dependent child, or if the student’s spouse is supporting the student’s child. (This replaces the previous criterion in paragraph 30(1)(c) that a student could qualify as independent if he or she was in a de facto relationship and there was a dependent child of the relationship.)
37. Regulation 7 also omits the reference to paragraph 30(1)(c) from paragraph 30(1)(g). Paragraph 30(1)(g) provided that, where students qualified as independent in 1987, under the former paragraph 30(1)(c), they would not carry their independence over into a subsequent year; this provision is inapplicable to the new paragraph 30(1) (c) as it was not in force in 1987.
Regulation 8
38. Regulation 8 inserts new regulations 31, 31A and 31B and a new heading into the Principal Regulations.
Regulation 31: Isolated secondary students
39. The new regulation 31 defines “isolated student”. The new regulation 42(2)(aa) enables the higher away-from-home rate of living allowance to be paid to general secondary students who qualify as isolated students and who live away from home.
40. Subregulation 31(1) defines expressions used in regulation 31. “Melbourne metropolitan area” is referred to in regulation 31(4)(d)(ii). “Relevant school” is referred to in regulations 31(3), (5), (6) (a), (10)(b).
41. The definition of “relevant school” uses the expression “full high school”. This term refers to any secondary school recognised by the relevant State or Territorial education authority as providing a full program of face-to-face tuition to the end of year 12 which enables students to meet tertiary entrance requirements. It does not include schools, such as district high schools or central schools in some States, which essentially cater for students to the end of year 10, even if they have a limited offering for students in years 11 and 12.
42. Subregulation 31(2) sets out the various classes of students who are regarded as isolated students. These are geographically isolated students (paragraph (2) (a), defined in subregulation (3)), students undertaking special courses (paragraph (2)(b), defined in subregulations (4) and (5)), disabled students (paragraph (2)(c), defined in subregulation (6)), students who were previously qualified as isolated and are allowed to retain that status in order not to adversely affect their studies (paragraph (2)(d), defined in subregulations (7) to (10)), students from itinerant families (paragraph (2)(e)).
43. Subregulation 31(3) sets out the criteria for qualifying as an isolated student on the basis of geographic isolation (see paragraph 31 (2)(a)).
44. Subregulation 31(4) defines a “special course” for the purpose of qualifying as an isolated student on the basis of undertaking such a course (see paragraph 31(2) (b); of also subregulation 31(5)).
45. Subregulation 31(5) provides that a student undertaking a special course does not qualify as isolated if there is a similar course at a government secondary school near the student’s home (of paragraph 31(2)(b), subregulation 31(4)).
46. Subregulation 31(6) sets out the criteria for qualifying as an isolated student on the basis of disability (see paragraph 31 (2) (c)).
47. Subregulation 31(7) provides that a student who ceases to qualify as isolated during a year is a “prescribed student” for the rest of the year. This enables the student to retain isolated student status and qualify for the away-from-home rate, so as not to interrupt his or her studies for the year (see paragraph 31(2)(d), of subregulations 31(8) to (10)).
48. Subregulation 31(8) provides that a student who ceases to qualify as isolated is a “prescribed student” in the following year if he or she then proceeds to year 10 or year 12. This avoids requiring the student to interrupt his or her studies (see paragraph 31(2)(d), of subregulations 31(7), (9), (10)).
49. Subregulation 31(9) provides that the concession in subregulation (8) for students proceeding to undertake year 10 applies only if a formal certificate is issued for the year, such as the School Certificate, and the applicable government education authority confirms it would be undesirable for the student to change schools at this stage.
50. Subregulation 31(10) provides that a student cannot take advantage of the continuity concession as a “prescribed student” (see paragraph 31(2)(d), subregulations 31(7) to (9)) if he or she ceases to attend the relevant educational institution or if the parental home changes so that the student can live at home and attend the educational institution.
51. Subregulation 31(11) provides that a student is not to be regarded as isolated in a year if he or she does not qualify as isolated for at least five school days in the year.
Regulation 31A: Separation of grantee from his or her spouse
52. Regulation 31A replaces the former regulation 41B, repealed by regulation 15 of the present Statutory Rules. Regulation 41B dealt with the situation of a student and his/her spouse who are living separately and apart, i.e. who have separated on a permanent basis because of a breakdown in the marriage relationship. The new regulation 31A is virtually identical to the former regulation 41B, but has been relocated in the new Interpretation Division as the new regulation applies to the whole of Part III, including the assets test (the former regulation 41B applied only to the income test provisions).
53. Subregulation 31A(1) replaces the former subregulation 41B(1). It provides that a student is not regarded as having a husband or wife if the student and the husband or wife are living separately and apart. The words “husband” and “wife” are used to indicate that the spouses were formally married, rather than in a de facto relationship, as separation from a de facto partner automatically involves loss of a “spouse” (see the definition of “spouse” in regulation 3 of the Principal Regulations).
54. Subregulation 31A(2) replaces the former subregulation 41B(2). It deals with students who have been separated from their spouses for six months or more (whether or not the separation began in the relevant year). In this situation, a student’s entitlement is not re-assessed later in the year if the student and the spouse reunite. If they do reunite later in the year, however, the spouse will be taken into account in assessing the student’s entitlement for the following year.
55. Subregulation 31A(3) replaces the former subregulation 41B(3). It has the effect that, if a student was separated from his or her spouse at the beginning of the year but the separation lasts for less than six months, the income test applies to the spouse after the parties are reunited. The provision refers to the student as being deemed to have had a spouse at the beginning of the year, picking up the wording of regulation 41(3)(c).
Regulation 31B: Separation of the parents of a grantee
56. Regulation 31B replaces the former regulation 42B, repealed by regulation 17 of the present Statutory Rules. The former regulation 42B dealt with the situation where a student’s parents live separately and apart, i.e. they have separated on a permanent basis because of a breakdown in the marriage relationship. The new regulation 31B is virtually identical to the former regulation 42B, but has been relocated in the new Interpretation Division as the new regulation applies to the whole of Part III, including the assets test (the former regulation 42B applied only to the income test provisions).
57. Subregulation 31B(1) replaces the former subregulation 42B(1). If a student’s parents have been separated for at least six months, the student’s entitlement is not re-assessed to take account of any subsequent reunion of the parents later in the year. If they do reunite later in the year, however, both parents will be taken into account in assessing the student’s entitlement for the following year.
58. Subregulation 31B(2) replaces the former subregulation 42B(1). It provides that, where a student’s parents were separated at the beginning of the year and the separation lasts for less than six months, the income test takes account of the parents’ reunion. It refers to the student as being deemed to have had the former parent at the beginning of the year, picking up the wording of regulation 42(7). All the six months’ separation does not need to occur in the relevant year.
Division 1A: Grant of Education Assistance
59. A new heading is inserted to create a new Division 1A of Part III of the Principal Regulations; this is the same as the present heading of Division 1. In effect, the interpretation provisions at the beginning of Part III have been moved into a new Division 1 and out of the the new Division 1A (former Division 1).
Regulation 9: Ineligibility - age of student
60. Regulation 9 replaces the former subregulation 32C(2), which set out an exception to the minimum age requirement that a beneficiary should be 16 or older. It omits paragraph 32C(2)(b), which provided for students who were under 16 and receiving student assistance when the age rule was introduced; all these students have now turned 16.
61. Subregulation 32C(2) refers to paragraph 30(1A)(c) of the Principal Regulations. This is a provision granting independence to young people who have reached the school leaving age and are unable to live at home because of domestic violence or similar situations.
Regulation 10: Ineligibility - New Zealand citizens
62. Regulation 10 inserts a new regulation 33C.
63. Subregulation 33C(1) requires that New Zealand students who are permanent residents solely by being New Zealanders need to have lived in Australia for six months continuously before they can qualify for AUSTUDY.
64. Subregulation 33C(2) ensures that a New Zealand student’s eligibility is not affected if he or she leaves Australia after having qualified for AUSTUDY.
Regulation 11: Ineligibility - secondary students: previous tertiary study
65. Regulation 11 amends regulation 34D of the Principal Regulations to ensure that a secondary student is not prevented from receiving AUSTUDY while undertaking an ESL course because of any tertiary study that he or she may have previously undertaken. (Paragraph 5(b) of the present Statutory Rules inserts a definition of “ESL course”.)
Regulation 12: Ineligibility - adult secondary students: repeat year of secondary study
66. Regulation 12 amends regulation 34E of the Principal Regulations by omitting the definition of “year 9 level”. This definition is being moved to the new subregulation 29(5) of the Principal Regulations (see paragraph 5(c) of the present Statutory Rules).
Regulation 13: Termination or cessation of approved course
67. Regulation 13 amends regulation 37 of the Principal Regulations, which deals with the termination of Assistance. Paragraph 13(a) modifies the main provision in regulation 37, subregulation 37(1), to ensure that it does not override the new subregulation 37(4). Paragraph 13(b) inserts two new provisions, subregulations 37(4) and (5).
68. The new subregulation 37(4) provides that, where an isolated student leaves a boarding school at the end of the school term, his or her Assistance terminates at the end of the pay period that includes the last day of the term. This avoids students incurring overpayments in such situations.
69. The new subregulation 37(5) defines expressions used in subregulation 37(4). The definition of “pay period” refers to the normal pay periods for students who qualify for the away-from-home rate because they are isolated students.
Regulation 14: Living allowance - students of independent status
70. Regulation 14 amends regulation 41 of the Principal Regulations, which provides for living allowance for independent students.
71. Paragraph 14(a) makes a drafting change, consequential on the new assets test provision, the new regulation 42B (inserted by regulation 17 of the present Statutory Rules).
72. Paragraph 14(b) makes a drafting changes, omitting a reference to a repealed provision, regulation 45C (repealed by Statutory Rules No. 381 of 1986).
73. Paragraph 14(c) increases the threshold for the spouse’s income test from $16,000 to $16,950.
74. Paragraph 14(d) repeals the existing subregulation 41(5) of the Principal Regulations, which provided for the dependent spouse allowance. In place of the former provision, new subregulations 41(5) to (6) are inserted. They provide that:
• some dependent spouse allowance may be payable where the spouse’s income exceeds the threshold. Previously no spouse allowance was payable in such cases;
• the income test applies to the spouse’s income over an extended period, of up to the full year of study, rather than on a weekly basis as previously.
Regulation 15: Repeal
75. Regulation 15 repeals the former regulation 41B of the Principal Regulations, which dealt with the separation of a student and his or her spouse. The substance of regulation 41B is contained in the new regulation 31A, inserted by regulation 8 of the present Statutory Rules.
Regulation 16 - Living allowance - students not of independent status
76. Regulation 16 amends regulation 42 of the Principal Regulations, which provides for the payment of living allowance for non-independent students.
77. Paragraph 16(a) makes a drafting change, consequential on the new regulation 42B (inserted by regulation 17) and the previous repeal of regulation 45C (by Statutory Rules No. 381 of 1986).
78. Paragraph 16(b) makes a drafting change, consequential on the addition of paragraph 42(2)(aa) of the Principal Regulations (inserted by paragraph 16(c)).
79. Paragraph 16(c) inserts a new paragraph 42(aa), which provides for the payment of the higher away-from-home rate of living allowance to isolated students. This does not apply where the student is living with one of the parents away from the principal home. (Paragraph (aa) refers to “prescribed proportion P” and “isolated student”; these are defined in new regulations 29AA(3) and 31 respectively.)
80. Paragraphs 16(d) and (e) make drafting changes, consequential on the new regulation 42(8) of the Principal Regulations (inserted by paragraph 16 (j)).
81. Paragraph 16(f) increases the threshold for the parental income test from $16,000 to $16,950.
82. Paragraph 16(g) makes a drafting change, consequential on the repeal of regulation 42B and its effective replacement by the new regulation 31B of the Principal Regulations (see regulations 8 and 17 of the present Statutory Rules).
83. Paragraphs 16(h) and (i) remove the entitlement to the dependent child deduction for a child in respect of whom the sibling concession applies.
84. Paragraph 16 (j) omits subregulation 42(11) of the Principal Regulations and inserts a new subregulation 42(8) in its place. The new provision defines which of a student’s brothers and sisters may attract the “sibling concession” provided for in subregulation 42(6) (a), incorporating the previous subparagraphs 42(6)(a)(i) and (ii) and subregulation 42(11).
85. The amendment modifies the previous criteria to generally include brothers and sisters for whom benefits are paid under the Assistance for Isolated Children Scheme. It also excludes brothers and sisters who attract or receive an allowance that is not income tested on parental income:
• it excludes a brother or sister who is a pensioner (defined in regulation 29(1) of the Principal Regulations);
• the extension to AIC beneficiaries applies unless the brother or sister is under 16 and attracts a correspondence allowance, or unless the brother or sister is receiving an invalid pension.
Regulation 15: Living allowance - assets test
86. Regulation 15 repeals regulation 42B of the Principal Regulations, which deals with the separation of a student’s parents. The substance of the existing regulation 42B is now contained in the new regulation 31B, inserted by regulation 8 of the present Statutory Rules.
87. Regulation 15 inserts a new regulation 42B, which provides for an assets test.
88. Subregulation 42B(1) defines several expressions used in the new regulation 42B.
89. “Assets” is defined to include any overseas property that a person may own.
90. The definition of “business” specifically mentions farming and professional services to remove any doubt that these are included in the discounting provision: see regulation 42B(12).
91. “Family member” is defined for the purpose of defining a family business in the discounting provision: see regulations 42B(12)(b) and (d).
92. “Property” is defined very widely. “Real property” means land and fixtures, such as buildings, and certain interests in land; “personal property” is a broad classification of all other kinds of property. Another general division of property is into corporeal property, i.e. tangible things, and incorporeal property, such as copyright in a book.
93. Subregulation 42B(2) is an anti-avoidance provision which takes account of assets held by a trust where a person in effect owns the assets but might not technically be a beneficiary.
94. Subregulation 42B(3) contains the basic provision of the assets test. It provides that that living allowance is not payable if the relevant assets exceed the threshold; there is no gradual abatement if the threshold is exceeded. The assets test operates on a continuous basis during the year, so that a person may commence or cease to be entitled to living allowance if there is a significant change in his or her family’s situation, e.g. if their assets decline in value or the student qualifies as independent or loses a spouse or parent. (The criteria for qualifying as independent are set out in regulation 30 of the Principal Regulations.)
95. The assets test applies as follows:
• for an independent student who does not have a spouse, no living allowance is payable if the student’s assets exceed $89,250;
• for an independent student who has a spouse, no living allowance is payable if the student’s and spouse’s combined assets exceed $127,000;
• for a non-independent student, no living allowance is payable if the combined assets of the student’s parents exceed $300,000.
96. Subregulation 42(4) provides that certain items are not to be included in a person’s assets.
97. Paragraph 42B(4)(a) excludes the value of a person’s principal home. A person and his or her spouse can have only one principal home between them excluded under this provision.
98. Paragraph 42B(4)(e) and subregulations 42B(5) to (7) also make special provision for the principal home. In particular, subregulation 42(6) provides that the family home may include up to 2 hectares of surrounding domestic land.
99. Paragraph 42(4)(b) excludes an asset that a person is unable to sell or otherwise dispose of for valuable consideration. There must be an absolute inability to dispose of the asset arising from the inalienability of the asset itself, not merely from a depressed market or the owner’s difficulty in placing the asset on the market. (On the other hand, the asset’s value is judged on the basis of its net market value, so that the state of the market is taken into account.)
100. Paragraph 42(4)(c) excludes the value of a deceased person’s property that is unavailable to a person. This situation might occur, for example, through difficulties in the administration of the estate or because the beneficiary’s insanity prevents him or her giving a valid discharge.
101. Paragraph 42B(4)(d) excludes the value of personal property designed specifically for the use of a disabled person, such as a wheelchair. Also excluded is the value of any modifications enabling personal property to be used by a disabled person, e.g. modifications to a car that have increased its value.
102. Paragraph 42B(4)(e) excludes money owing to a person from the sale of his or her previous home, where the person will be using the money to buy a new home.
103. Subregulation 42(5) excludes money received by a person from the sale of his or her previous home, where the person will be using the money to buy a new home.
104. Subregulation 42B(6) extends the exemption of the family home.
105. Paragraph 42 (6) (a) provides that the exemption for a home can include a surrounding area, or “curtilage”, of up to 2 hectares (including the home itself). Subregulation 42B(7) provides that the land should be essentially used for private or domestic purposes and in association with the home.
106. Paragraph 42 (6) (b) extends the exemption for apartments etc to include a garage and/or a storeroom.
107. Subregulation 42B(7) provides that the exemption for land associated with a home applies only to land used essentially for private or domestic purposes and in association with the home.
108. Subregulation 42B(8) deals with the situation where a person owes money. An assest’s value is reduced by any outstanding debts associated with buying or upgrading the asset, such as a hire purchase arrangement. There is no reduction if the asset was used as security for a mortgage unless the mortgage was incurred to buy or upgrade the asset in question.
109. Subregulation 42B(9) deals with the situation where a person is owed money. The value of the principal still to be repaid is included in the person’s assets, but no account is taken of the interest.
110. Subregulation 42B(10) deals with the situation of a person who disposed of assets, i.e. did not receive a reasonable price for them: “disposal” is defined in subregulation 42B(11). The value of such assets is taken into account for the following five years, provided that the assets were disposed of on or after 24 August (the day following the announcement of the AUSTUDY assets test).
111. Subregulation 42B(11) defines the disposal of assets for the purpose of subregulation 42B(10), i.e. disposing of assets without receiving adequate recompense. It also provides that the amount received by the person for the asset is offset against the value of the asset.
112. Subregulation 42B(12) provides that the value of a family business in which a person or his or her spouse works is discounted by 50%.
113. Paragraphs 42B(12)(a) to (d) in effect define what is considered to be a family business for the purposes of the concession. “Family member” is defined in subregulation 42B(1). The test in subregulation 42B(2) should be applied in considering the ownership of a trust for the purposes of paragraph 42B(11)(b).
114. Paragraphs 42(12)(e) to (g) provide for the discounting by 50% of the assets. For trusts, partnerships and companies, discounting is applied to the amount of the business owned by the trust, partnership or company. The discounting is applied to the person’s or the spouse’s share of that amount, based on his or her share in the trust, partnership, or company.
115. Subregulation 42B(13) provides that the discounting of a family business does not apply to certain kinds of assets:
• Choses in action. This refers to non-tangible possessions, i.e. rights that can be the basis of a legal action: e.g. bank accounts, shares, annuities. However, a limited number of items, such as copyright, patents and trademarks, are excluded from the application of the subregulation; the purpose is to allow such assets to be discounted.
• Reversionary interests. For example, where a business has leased assets out, those assets are not included in the discounting provision.
• Assets used for the private or domestic use of the owners of the business. “Owners” includes the beneficiaries of a trust or the shareholders of a holding company.
116. Subregulation 42B(14) provides that valuations by the Australian Valuation Office are to be taken as evidence in proceedings before a court or tribunal. The provision does not prevent a person from submitting contrary evidence.
Regulation 18: Living allowance - new pensioner students
117. Regulation 18 amends regulation 43 of the Principal Regulations, which provides for the living allowance payable to students who receive certain specified pensions. The amount of living allowance payable to such students is increased from $15 a week to $30 a week.
Regulation 19: Notice to be given of matters affecting Assistance
118. Regulation 19 amends regulation 85 of the Principal Regulations, which requires beneficiaries to advise the Department of any changes in their situation that might affect their entitlement.
119. Paragraph 19(a) makes a drafting change consequential on the amendment made by paragraph 19(b).
120. Paragraph 19(b) provides that a student is obliged to inform the Department if a brother or sister ceases to attract the sibling concession under regulation 42(6)(a) because he or she ceases to attract AIC benefits.
121. Paragraph 19(c) provides that a student is obliged to inform the Department if he or she ceases to qualify for AUSTUDY because of the operation of the assets test.
122. Paragraph 19(d) inserts a new subregulation 85(2) in place of the former provision. The former subregulation 85(2) defined certain expressions used in subregulation 85(1) as having the meanings that they have in Part III of the Principal Regulations (the Part dealing with AUSTUDY). The new subregulation 85(2) is a general provision that all expressions used in subregulation 85(1) have the meaning that they have in Part III.
Regulation 20: Schedule 3
123. Regulation 20 repeals Schedule 3 of the Principal Regulations and inserts a new schedule in its place. Schedule 3 lists a number of institutions that are treated as technical and further education level institutions for AUSTUDY purposes, but which are not covered by the definition in regulation 7 of the Principal Regulations.
124. The new Schedule 3 omits the generality of non-government business colleges listed in the Schedule. The effect is to discontinue the availability of AUSTUDY for students in those colleges.
125. The amendment to Schedule 3 is modified by regulation 22 of the present Statutory Rules.
Regulation 21: Schedule 3B
126. Regulation 21 inserts a new Schedule 3B into the Principal Regulations. The schedule lists courses that are to be regarded as special talent courses for the purposes of the definition of an isolated student (see new regulation 31(4)(a) of the Principal Regulations).
Regulation 22: Application
127. Regulation 22 modifies the application of the amendment to be made by regulation 20. It provides that the withdrawal of AUSTUDY from students in non-government business colleges does not affect students who commenced their courses before 24 August 1988 (i.e. before the 1988 Budget night).