EXPLANATORY STATEMENT
Issued by authority of the Minister for Education
STATUTORY RULES 1986 NO. 382
STUDENT ASSISTANCE REGULATIONS (AMENDMENT)
The Student Assistance Act
The Student Assistance Act 1973 (‘the Act’) provides the legislative authority for AUSTUDY and for Post-graduate Awards. Section 36 of the Act empowers the Governor-General to make regulations under the Act, and section 11 provides that benefit under AUSTUDY is payable as provided by the regulations. The present amendments modify the Student Assistance Regulations (‘the Regulations’) made under section 36.
AUSTUDY commenced on 1 January 1987. It replaced the Tertiary Education Assistance Scheme (‘TEAS’), which was previously provided for by the Act and Regulations, and the Secondary Allowances Scheme and the Adult Secondary Education Assistance Scheme, which were not specifically provided for by legislation.
The amendments
There has been criticism that the Regulations did not contain an overall definition of “income” for TEAS purposes and that they did not specify the relationship between the TEAS concept of “income” and the concept employed for income tax purposes. This was raised by the Auditor-General in his Report for September 1984. It was also the subject of comment by the Administrative Appeals Tribunal in Harding v the Secretary of the Department of Education (W85/106), though in the event the Tribunal decided to affirm the Department’s approach in that case.
The present amendments repeal the former partial definitions of “income”, “gross income” etc and insert a new definition of “income” in their stead (see amending regulation 3(a)). This definition applies equally to
students, spouses and parents. In addition to picking up points formerly contained in various provisions in the Regulations, the new definition clarifies that -
• assessable income for tax purposes is income for AUSTUDY purposes (subject to specified deductions);
• overseas income is income for AUSTUDY purposes (again, subject to specified deductions);
• rent assistance provided under the Social Security Act is not treated as income for AUSTUDY purposes.
A provision is also inserted clarifying that the AUSTUDY concept of income generally follows that adopted for tax purposes (see amending regulation 3(b)).
In line with the clarification of the relation between AUSTUDY and the income tax system, it is provided that advice supplied by the Australian Taxation Office may be used as evidence in legal proceedings concerning student assistance matters.
The amendments omit a former provision that assistance granted under the Act to a student’s spouse was not to be regarded as the spouse’s income.
The amendments also modify the provisions relating to the dependent child deduction of $450 allowable to the student’s parents. The test for the deduction is now whether the child is “wholly or substantially dependent” on the parent, rather than “wholly or partly dependent” as was formerly the case.
Commencement
The commencement date for the present amendments is 1 January 1987.
NOTES ON INDIVIDUAL REGULATIONS
Regulation 1
Regulation 1 indicates that the amendments are being made to the Student Assistance Regulations.
Regulation 2
Regulation 2 specifies that the amendments take effect from 1 January 1987.
Regulation 3
Regulation 3 amends existing regulation 29 of the Regulations, which defines expressions used in the AUSTUDY regulations.
Regulation 3(a) omits the definition of “gross income” from regulation 29(1) and substitutes a new definition of “income”. The new definition of “income” applies to students, spouses and parents. It draws together various former, partial definitions and includes new provisions dealing with assessable income (paragraph (a)), overseas income (paragraph (b)) and rent assistance (paragraph (g)).
• Paragraph (a) of the definition clarifies that “income” includes amounts assessable for income tax purposes; this is a new provision but was formerly provided for in part by regulations 29(1) “gross income”, 41(3B)(d). Paragraph (a) also provides that the inclusion of assessable income does not extend to amounts that are allowable deductions under sections 51 to 54 of the Income Tax Assessment Act (this provision replaces the former regulations 41(3B) (a), 42(7)B, 42A(3)B, 42A(4)B).
• Paragraph (b) is a new provision and clarifies that overseas income is to be included. It provides for deductions comparable to those specified in paragraph (a).
• Paragraph (c) provides that “income” includes maintenance payments, whether for the person or for a dependant. (This was formerly reflected in regulations 41(3B)(c), 42(10)).
• Paragraph (d) provides that amounts paid to a person on behalf of another person are in general included in the recipient’s income. This is subject to the exceptions listed in paragraphs (e) to (j) of the definition. (This, together with the inclusion of maintenance, was formerly reflected in regulations 41(3B)(c), 42(10)).
• Paragraph (e) provides that certain allowances under the Social Security Act are not taken into account for the AUSTUDY income tests. These are allowances under Part V of that Act (family income supplement), Part VI (family allowance), Part VIB (handicapped child’s allowance). (These provisions were formerly reflected in regulations 29(12)(ca), (e), 41(3B)(b)(ii), 42(8)(b)(ii)).
• Paragraph (f) provides that the AUSTUDY income test does not take account of a pension under Part VIA of the Social Security Act, viz a double orphan’s pension. (This was formerly reflected in regulation 29(12)(d).)
• Paragraph (g) is a new provision and excludes rent assistance under the Social Security Act from the definition of “income”.
• Paragraph (h) excludes educational assistance received in respect of another person, eg where an educational allowance is paid to the student’s parent. It does not apply to a dependent child allowance such as that payable under regulations 41(6), 42(16). (This provision was formerly reflected in regulation 41(3B) (b) (iv) and in regulation 42(8) (b) (iv).)
• Paragraph (i), which excludes domiciliary nursing care benefit under the National Health Act, was formerly reflected in regulation 29(12)(f).
• Paragraph (j), which excludes payments to wards of state, was formerly reflected in regulation 29(12)(g).
Regulation 3(b) of the amendments omits the former regulation 29(12), a partial definition of “income”, and inserts a new regulation 29(12) which has the effect that the general principles adopted in the income tax area are to be applied in determining the income of a person for AUSTUDY purposes.
Regulation 4
Regulation 4 amends existing regulation 32, which deals with the making of applications for AUSTUDY. It makes drafting changes consequential on the omission of the definition of “gross income” and the new definition of “income”.
Regulation 5
Regulation 5 amends existing regulation 41, which provides for the payment of living allowance under AUSTUDY to independent students. The changes omit provisions which in effect constituted partial definitions of “income” and which are incorporated in the new definition of “income” in regulation 29(1).
The payments referred to in regulation 41(3B) are made under certain war disability and similar pensions.
The expression “tertiary education institution” in regulation 41(7) is changed to “education institution”, in accordance with changes to the Act made by the Student Assistance Amendment Act 1986.
The omission of the former regulations 41(3A) and (3B)(b)(iv) has the effect that assistance granted to a student’s spouse under the Act is now included in the spouse’s income. This follows the decision that
assistance under the Act should be taxable. (The Regulations formerly contained no similar provision in relation to assistance granted to a student’s parent.)
Regulation 6
Regulation 6 amends existing regulation 42, which provides for the payment of living allowance under AUSTUDY to students who are not independent. The changes omit provisions which in effect constituted partial definitions of “income” and which are incorporated in the new definition of “income” in regulation 29(1).
The amendments also modify regulation 42(7)C so that the dependent child deduction is allowable if the child is “wholly or substantially dependent” on the parent, rather than “wholly or partly dependent” as was formerly the case.
The payments referred to in regulation 42(8) are made under certain war disability and similar pensions.
The expression “tertiary education institution” in regulation 42(17) is changed to “education institution”, in accordance with changes made by the Student Assistance Amendment Act 1986.
Regulation 7
Regulation 7 amends existing regulation 42A, which provides for the current income concession to the AUSTUDY parental income test. The changes omit various provisions which in effect gave partial definitions of “income” and which have been incorporated in the new definition of “income” in regulation 29(1).
The amendments also make the dependent child deduction allowable if the child is “wholly or substantially dependent” on a parent, rather than “wholly or partly dependent” as was formerly the case.
Regulation 8
Regulation 8 inserts a new provision, regulation 94, concerning evidence that may given to establish income details in student assistance cases.
Section 16(4)(hb) of the Income Tax Assessment Act enables the Australian Taxation Office to give information to the Department of Education in relation to student assistance matters. The new regulation 94 provides that such information is to be accepted as evidence by Courts and administrative tribunals in proceedings concerning student assistance under the Act. Previously there have been, for example, difficulties arising from the application of the hearsay rule.
Such information will be sufficient in the absence of contrary evidence. It will, of course, be open for evidence to be brought opposing information supplied by the Taxation Office.