Introductory Info
Date introduced: 11 September 2019
House: House of Representatives
Portfolio: Social Services
Commencement: Schedule 1 on the first 1 January or 1 July to occur after the day of Royal Assent; Schedules 2 and 3 on 1 July 2020, or, if Royal Assent occurs on or after 1 July 2020, the first 1 January or 1 July to occur after the day of Royal Assent.
Purpose of
the Bill
The purpose of the Social Services Legislation Amendment
(Better Targeting Student Payments) Bill 2019 (the Bill) is to amend the Social Security Act
1991 (SS Act) and the Veterans’
Entitlements Act 1986 (VE Act) to:
- limit
eligibility for the relocation scholarship provided to some Youth Allowance
recipients to those whose parental family home or usual place of residence is
in Australia, and to those who relocate for study in Australia only. Students
who relocate outside Australia to undertake part of their Australian course
will no longer qualify for the relocation scholarship
- introduce
new payment rates for the Pensioner Education Supplement (PES) and the
Education Entry Payment (EdEP) that correspond with different study loads
undertaken by recipients and
- no
longer pay the PES during semester breaks and end-of-year holidays.
The measures were announced in the 2017–18 Budget.[1]
The changes to relocation scholarship eligibility are
expected to provide savings of $3.5 million for the Department of Social
Services over four years.[2]
The changes to EdEP and PES rates will provide combined savings of $80.3
million for the Department of Social Services over four years.[3]
History of
the Bill
A Bill containing the same measures, the Social Services
Legislation Amendment (Better Targeting Student Payments) Bill 2017, was
introduced to the 45th Parliament on 21 June 2017.[4]
The Bill passed the House of Representatives on 23 October 2017 and was
introduced to the Senate on 13 November 2017. The Bill lapsed at the end
of the Parliament on 1 July 2019.[5]
There are no significant differences between the 2017 and
2019 Bills other than changes to commencement dates. In the 2017 Bill, all the
Schedules were to commence on 1 January 2018 or, if Royal Assent did not occur
before 1 January 2018, the first 1 January or 1 July to occur after Royal
Assent. In the 2019 Bill, Schedule 1 (relating to the Relocation Scholarship)
will commence on the first 1 January or 1 July to occur after Royal Assent.
Schedules 2 and 3 (relating to the Education Entry Payment and Pensioner
Education Supplement rates) will commence on 1 July 2020, or, if
Royal Assent does not occur before 1 July 2020, the first 1 January or 1 July
to occur after Royal Assent.
There are a few changes in the 2019 Bill which follow on
from amendments to the SS Act made by the Social Services
Legislation Amendment (Welfare Reform) Act 2018.[6]
This Act will cease payment of the Wife Pension and Widow Pension B from 20
March 2020. As a result, amendments relating to the Education Entry Payment
paid to Wife Pension and Widow B Pension recipients in the 2017 Bill are
redundant and have been removed in the 2019 Bill.
This Bills Digest replicates much of the material in the
Bills Digest for the 2017 Bill.[7]
Background
Relocation scholarship
The relocation scholarship was introduced from April 2010
together with a separate scholarship, the student start-up scholarship.[8]
The scholarships were supplementary amounts provided to eligible recipients of
student assistance payments (such as Youth Allowance, ABSTUDY or Austudy).
These two scholarships replaced the Commonwealth Education Costs Scholarship,
the Commonwealth Accommodation Scholarship and the National Accommodation
Scholarship.[9]
A much larger group of students on income support were eligible for the new
scholarships but the overall value of the relocation scholarship combined with
the start-up scholarship was less than the previous Commonwealth Accommodation
Scholarship over the duration of the student’s course.[10]
The introduction of the student start-up and relocation
scholarships by the Rudd Government was based on a recommendation of the 2008 Review
of Australian Higher Education chaired by Denise Bradley (the Bradley
Review). The Bradley Review recommended that the Government continue and
enhance the Commonwealth Scholarships program by ‘providing benefits to all
eligible students on Austudy or Youth Allowance for education costs and
accommodation costs (for those who need to leave home) and by transferring
responsibility for the payment of benefits to Centrelink’ (rather than
scholarships being allocated to universities to administer).[11]
The relocation scholarship is payable to students studying
an approved scholarship course and receiving student income support who are considered
dependent and judged to have to live away from home for study, as well as
independent students disadvantaged by personal circumstances.[12]
Vocational education and training courses at higher education institutions are
not considered approved scholarship courses.[13]
In 2018, around 23,000 students received a relocation scholarship.[14]
When first introduced, any dependent student who needed to
live away from home for study could be eligible for the relocation scholarship.
From 2015, students relocating between or within major cities for study were no
longer eligible for a relocation scholarship.[15]
When first introduced, the rate of the relocation
scholarship was $4,000 for the first year of study and $1,000 for the second
and subsequent years of study. From 2012, different rates were introduced for
major city and regional students’ second and third years of study (based on
where they were relocating from). In 2012, the rate for the first year of study
for all students was reduced to its 2010 rate (the scholarship is normally
indexed to movements in the Consumer Price Index once a year on 1 January). The
historical rates of the scholarship are set out in Table 1.
Table 1: relocation scholarship rates
| Date |
First year of study |
Second year of study |
Third year of study |
Fourth year of study |
| All students |
Major cities |
Regional |
Major Cities |
Regional |
All students |
| 2010 |
$4,000 |
$1,000 |
$1,000 |
$1,000 |
$1,000 |
$1,000 |
| 2011 |
$4,124 |
$1,031 |
$1,031 |
$1,031 |
$1,031 |
$1,031 |
| 2012 |
$4,000 |
$1,000 |
$2,000 |
$1,000 |
$2,000 |
$1,000 |
| 2013 |
$4,048 |
$1,012 |
$2,024 |
$1,012 |
$2,024 |
$1,012 |
| 2014 |
$4,145 |
$1,036 |
$2,073 |
$1,036 |
$2,073 |
$1,036 |
| 2015 |
$4,269 |
$1,067 |
$2,135 |
$1,067 |
$2,135 |
$1,067 |
| 2016 |
$4,333 |
$1,083 |
$2,167 |
$1,083 |
$2,167 |
$1,083 |
| 2017 |
$4,376 |
$1,094 |
$2,189 |
$1,094 |
$2,189 |
$1,094 |
| 2018 |
$4,459 |
$1,115 |
$2,231 |
$1,115 |
$2,231 |
$1,115 |
| 2019 |
$4,553 |
$1,138 |
$2,278 |
$1,138 |
$2,278 |
$1,138 |
Source: Department of Social Services (DSS), ‘5.2.6.120 relocation
scholarship historical rates’, Social security guide, DSS website, last
reviewed 2 January 2018; Department of Human Services (DHS), ‘Relocation
scholarship: payment rates’, DHS website, last updated 19 February 2019.
The student start-up scholarship, introduced at the same
time as the relocation scholarship, was converted into an income-contingent
loan program (the student start-up loan) from 1 January 2016.[16]
Education Entry Payment
The EdEP is paid to eligible income support recipients to
assist with the up-front costs of study.[17]
It is a taxable lump sum payment, worth $208, paid once a year.[18]
The EdEP was introduced from 1 January 1992, initially for
recipients of the Sole Parent Pension (now known as Parenting Payment Single).[19]
Access to the EdEP was gradually expanded to other payments: to Disability
Support Pension and Widow B Pension in 1993;[20]
to Newstart Allowance in 1994;[21]
and to Carer Payment,[22]
Widow Allowance, Wife Pension, Parenting Allowance (now known as Parenting
Payment Partnered) and Partner Allowance in 1995[23]
with a view to encouraging these payment recipients to participate in education
and study.
Eligibility requirements
Currently, a person may be eligible for the EdEP if they:
- are
receiving Newstart Allowance, Parenting Payment Partnered, Partner Allowance or
Widow Allowance and have received payment continuously for at least 12 months
- have
started or will start an approved education course and
- have
not received an EdEp in the last 12 months.
A person may also be eligible for the EdEP if they are
receiving Carer Payment, Disability Support Pension, Parenting Payment Single,
Special Benefit (in some cases), Widow B Pension or Wife Pension and they:
- are
eligible to receive the PES (see next section) and
- have
not already received an EdEP in the current calendar year.[24]
In all cases, the person must be studying an approved
course in Australia.
Recipients of some veterans’ payments may also be eligible
for the EdEP. Invalidity Service Pension, Partner Service Pension and Income
Support Supplement recipients may be eligible for the EdEP if they are below
the veterans’ pension age, are enrolled in either a full-time or part-time
course of study that is the subject of a determination under section 5D of the Student
Assistance Act 1973, have not received an EdEP in the current calendar year
and are qualified to receive the social security PES.[25]
Number of recipients
In the 2017–18 financial year there were 46,298 recipients
of the EdEP.[26]
Table 2 shows the number of EdEP recipients by qualifying
payment in the 2017–18 financial year.
Table 2: Education Entry Payment recipients by main
payment, 2017–18
| Main payment |
Number of recipients |
| Austudy |
327 |
| Carer Payment |
3,813 |
| Disability Support Pension |
14,504 |
| Newstart Allowance |
7,978 |
| Parenting Payment Partnered |
311 |
| Parenting Payment Single |
19,269 |
| Youth Allowance (Student) |
56 |
| Other |
40 |
| Total |
46,298 |
Source: Senate Community Affairs Committee, Answers to
Questions on Notice, Social Services Portfolio, Supplementary Budget Estimates 2018–19,
Question
SQ18-000512.
Previous attempts to abolish the Education Entry Payment
failed
The Abbott Government announced in the 2014–15 Budget that
it would abolish the Education Entry Payment and the PES.[27]
Five different Bills were introduced to the Parliament
with proposals to abolish the two payments before the Government announced in
the 2017–18 Budget that it would no longer proceed with the measures:[28]
Pensioner Education Supplement
The PES was introduced on 1 January 1987, together the
introduction of the new AUSTUDY Scheme for students.[34]
The introduction of the AUSTUDY Scheme saw a rationalisation of financial
assistance for students—in particular, a restriction on students receiving
either a social security pension or allowance at the same time as a range of
student income supplement payments (such as the Tertiary Education Assistance
Scheme). The PES was largely intended as a make-up payment for those students
in receipt of a pension who would otherwise have had their overall payments
reduced.[35]
It has continued as a supplementary payment for pensioners undertaking approved
study.
Rate
The current rate of the PES is:
- $31.20
per fortnight for those with a study-load of less than 50 per cent of the
normal full-time study load (unless the person is receiving Disability Support
Pension, Invalidity Service Pension, War Widow/er Pension with a dependent
child, or an allowance payment and has a partial capacity to work)
- $62.40
per fortnight for all other students.[36]
Eligibility requirements
To be eligible for the PES, a person must meet residency
requirements, be at least 16 years of age or be considered independent and be
in receipt of a qualifying payment:
- Carer
Payment
- Disability
Support Pension
- Parenting
Payment Single
- Parenting
Payment Partnered (in limited circumstances)
- Widow
B Pension
- Widow
Allowance
- Wife
Pension (where the partner receives Disability Support Pension)
- Newstart
Allowance and Youth Allowance where the person has transferred from Parenting
Payment Single or Disability Support Pension (in certain circumstances)
- Newstart
Allowance where the recipient is a single principal carer
- Special
Benefit where the recipient is a single parent
- Invalidity
Service Pension
- Partner
Service Pension (where the recipient’s partner receives Invalidity Service
Pension) and
- War
Widow/er’s Pension or Defence Widow/er’s Pension if the recipient has a
dependent child.[37]
The person must also be undertaking qualifying study.
Qualifying study means that a person is enrolled in a course or is a continuing
student intending to enrol in a course, the course is an approved course of
education or study, the recipient is a full-time student or concessional
study-load student and the person’s progress is considered satisfactory.[38]
Approved courses are determined by the Minister for Social
Services in the Student
Assistance (Education Institutions and Courses) Determination 2019 and
include secondary and tertiary courses.
Full-time study is defined as at least 75 per cent of the
normal amount of full-time study required for the course of education or study.[39]
For tertiary students, this would be the full-time study load required under
the administration guidelines for the Higher Education Support Act 2003,
the amount defined by the institution, an amount equivalent to the average
amount of full-time study required to complete the course in the minimum time,
or, a minimum of 20 contact hours a week.[40]
A concessional study-load student is a person undertaking
at least 66 per cent or 25 per cent of the normal amount of full-time study for
their particular course of education or study.[41]
Only single parents, carers or students with a substantial disability may
qualify for PES at the 25 per cent part-time study load.[42]
The 66 per cent study-load concession generally only applies to
non-school students. For tertiary students studying a course covered by the Higher
Education Support Act 2003, the study load would be for a minimum of 66 per
cent of the full-time study load for the particular course. For tertiary courses
not covered by the Higher Education Support Act 2003 and other secondary
courses (not at a secondary school), the percentage is 66 per cent or more of
the study-load normally required by the institution for a full-time student.[43]
Number of recipients by payment type
Table 3 shows the number of PES recipients by qualifying
payment as at 29 June 2018.
Table 3: Pensioner Education Supplement recipients by
qualifying payment, as at 29 June 2018
| Main payment |
Number of recipients |
| Carer Payment |
2,333 |
| Disability Support Pension |
9,259 |
| Newstart Allowance |
1,651 |
| Parenting Payment Single |
11,041 |
| Other |
31 |
| Total |
24,315 |
Source: Senate Community Affairs Legislation Committee, Answers
to Questions on Notice, Social Services Portfolio, Supplementary Budget Estimates
2018–19, Question
SQ18-000512.
Attempts to abolish the Pensioner Education Supplement
See section on attempts to abolish the EdEP above.
Committee consideration
Senate Selection of Bills Committee
In its reports on 19 September 2019 and 17 October 2019,
the Senate Selection of Bills Committee reported that it had deferred
consideration of the Bill until its next meeting.[44]
Senate
Community Affairs Legislation Committee
The 2017 Bill was referred to the Senate Community Affairs
Legislation Committee.[45]
The Committee published its report on 1 September 2017 making one
recommendation: that the Bill be passed.[46]
The Committee acknowledged the impact of the proposed changes
on some students ‘however notes that since the introduction of these payments
individuals wishing to undertake study have access to more targeted support,
such as HECS-HELP, FEE-HELP and VET FEE-HELP tuition loan programs’.[47]
Australian Labor Party (ALP) senators issued a Dissenting
Report and rejected the recommendation of the majority report. ALP senators
welcomed the Government’s decision to no longer abolish the EdEP and PES
entirely but stated that ‘there is still significant concern regarding the
impact of these cuts on income support recipients who are undertaking study,
who are predominantly women and people with disability’.[48]
The Australian Greens also issued a Dissenting Report
recommending that the Bill not be passed. The Australian Greens stated that the
Bill, if passed, ‘will place added financial pressure on income support
recipients who are studying and render it more difficult for them to continue
their studies and find work in the future’.[49]
Senate Standing Committee for the Scrutiny of Bills
The Senate Standing Committee for the Scrutiny of Bills
had no comment on the Bill or the 2017 Bill.[50]
Policy position of non-government parties/independents
At the 2019 Election, the ALP committed to reversing the
three measures in the Bill.[51]
In 2017, then Shadow Minister for Families and Social
Services Jenny Macklin described the measures in the Bill, together with other
budget measures, as ‘nasty cuts’.[52]
As discussed above, ALP senators recommended the 2017 Bill be opposed by the
Senate in their Dissenting Report to the Senate Community Affairs Legislation Committee’s
majority report on the Bill.[53]
The Australian Greens also recommended the 2017 Bill not
be passed in their Dissenting Report.[54]
It is unclear what the position of other non-government
parties and independents is on the Bill.
Position of major interest groups
Australian Council of Social Service
The Australian Council of Social Service (ACOSS) previously
stated that it was opposed to the relocation scholarship changes, stating
‘there appears to be no clear policy rationale behind the tightening
eligibility’ and ‘ACOSS’ view is that social security payments should be paid
on the basis of financial need and not guided by arbitrary conditions’.[55]
ACOSS is also opposed to the changes affecting the PES and EdEP stating that
‘costs of study are unlikely to be less with 50%+ study load’ and ‘costs of
commencing study remain the same regardless of study load, and therefore there
is no rationale for having a tiered rate of EEP [EdEP]’.[56]
ACOSS also suggested that the changes to PES and EdEP
rates ran counter to the Government’s ‘Investment Approach’ to welfare which is
aimed at early interventions to prevent long-term income support receipt:[57]
These education payments provide much needed assistance that
improves people’s prospects. It is counterintuitive to develop an Investment
Approach policy to improve support to people seeking to improve their
employment prospects, and at the same time cut assistance that actually helps
people on low incomes get meaningful and sustainable employment.[58]
National Social Security Rights Network
The National Social Security Rights Network (NSSRN) previously
stated that it was opposed to each of the measures in the Bill.
In regards to the relocation scholarship eligibility
changes, the NSSRN stated:
Relocation
scholarships should be generally available to all low income students who move
away from home to study, regardless of the location of the family home or where
the student chooses to study. This is consistent with the original intention of
the payment and provides support on an equitable basis. The scholarship should
respond to the need for support with the costs of moving away from home without
additional restrictions.[59]
In regard to the changes to EdEP rates, the NSSRN stated
‘at $208 per year this payment is unlikely to meet all the additional costs of
study for many students, regardless of study load. Put another way, proposing a
tiered rate structure for a payment based on study load might make some sense
if many people were being overcompensated’.[60]
The NSSRN also suggested the PES rate structure was not
properly aligned with actual costs faced by different students:
Any rate structure is a compromise, as it only has an
approximate fit with the costs faced by different students. However, our view
is that the current rate structure strikes a better balance than this proposal,
especially in how it acknowledges the challenges facing students with
disability.[61]
Carers Australia
Carers Australia previously stated that it was opposed to
the changes to the PES and EdEP, stating: ‘reducing the amount of EEP and PES
payments based on small changes in course loads, and suspending payments during
semester breaks and holiday periods, as proposed in the Bill, will adversely
affect the capacity of carers to continue their studies’.[62]
People with Disability Australia
People with Disability Australia (PWDA) was also opposed
to the changes to the PES and EdEP stating the change to payment rates ‘is
deeply unfair and will cause substantial financial pain to people in receipt of
social security payments who are studying’.[63]
PWDA stated in its submission to the Senate Community Affairs Committee inquiry
into the 2017 Bill:
If the Bill is passed those on the lowest incomes, including
people with disability, will be further pushed into poverty and financial
hardship. It will make it harder for people with disability to start or to
continue undertaking education. Plans to cut these payments are counter to the
Government’s focus on increasing employment opportunities through further
education. Whilst expectations for pensioners to undertake education increase,
the very means of supporting access to education for pensioners are being cut.[64]
Financial implications
According to the Explanatory Memorandum, the changes to
the relocation scholarship eligibility requirements will provide savings of
$3.5 million over four years for the Department of Social Services.[65]
As some costs may be involved for other agencies such as the Department of
Human Services, this does not reflect the net fiscal impact of the measure. The
changes to EdEP and PES rates will provide combined savings of $80.3 million
over four years for the Department of Social Services (neither the Explanatory
Memorandum nor the budget papers disaggregated the savings estimate for each
payment).[66]
Statement of Compatibility with Human Rights
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the
Bill’s compatibility with the human rights and freedoms recognised or declared
in the international instruments listed in section 3 of that Act. The
Government considers that the Bill is compatible.[67]
Parliamentary Joint Committee on Human Rights
The Parliamentary Joint Committee on Human Rights (PJCHR)
stated that it did not have any comment in relation to the Bill on the basis
that it did not engage, or only marginally engaged, human rights; promoted
human rights; and/or permissibly limited human rights.[68]
In regards to the 2017 Bill, the PJCHR had questioned
whether the relocation scholarship measure in the Bill was a ‘permissible
limitation on the right to social security’.[69]
The PJCHR found that the statement of compatibility with human rights had
identified the purpose of the measure as ‘to simplify and streamline the
delivery’ of the relocation scholarship. However, the PJCHR stated:
... ‘simplifying’ and ‘streamlining’ do not constitute
legitimate objectives for the purposes of international human rights law and do
not acknowledge the extent of the payment reduction. Rather, a legitimate
objective must address a pressing or substantial concern, and not simply seek
an outcome regarded as desirable or convenient.[70]
The PJCHR sought the advice of the Minister for Social Services
which was provided on 25 August 2017.[71]
The PJCHR found that, based on the additional information provided by the
Minister, the measure was ‘likely to be compatible with the right to social
security’.[72]
However, the PJCHR noted that ‘information in support of the Minister’s
statement as to the financial barriers facing students whose parental home or
usual place of residence is overseas, or who study overseas, would have been of
assistance’ in assessing the measure.[73]
None of this additional information has been included in
the Explanatory Memorandum or Statement of Compatibility with Human Rights for
the 2019 Bill.
Key issues and provisions
Schedule 1—Relocation scholarship payment
Schedule 1 will limit eligibility for the relocation
scholarship payment provided to some Youth Allowance recipients to those whose
parental family home or usual place of residence is in Australia, and to those
who relocate for study in Australia only. Students who relocate outside
Australia to undertake part of their Australian course will also no longer be
qualified for the relocation scholarship.
The Explanatory Memorandum to the Bill states that these
two groups of students currently qualify for the relocation scholarship as the
criteria used to assess remoteness (that is, whether a student is moving from
or to a major city or regional area) classifies anything not considered a
‘major city of Australia’ as regional or remote location and ‘this includes
locations outside of Australia’.[74]
The Explanatory Memorandum describes this as ‘a loophole in the current
legislation’.[75]
The measure will provide limited expenditure savings to
Government but will prevent payment of the relocation scholarship to students
whose parental home or usual place of residence is overseas, and those who move
overseas to undertake a component of their Australian course.
Numbers affected
The Government estimates that fewer than 400 students each
year will not be eligible for the relocation scholarship as a result of the
changes: fewer than 250 students per year with parental homes outside of
Australia and fewer than 150 students studying outside of Australia.[76]
Key provisions
Item 1 inserts proposed subsections 592K(7A),
(7B) and (7C) into the SS Act which
set out additional circumstances in which a person would be deemed ineligible
for the relocation scholarship.
Proposed subsection 592K(7A) would make a person
ineligible for the relocation scholarship where, on the day the person
commenced their course, the home of each parent was outside Australia. Where a
person had one parent living outside Australia and another parent in Australia,
they would not be precluded from the relocation scholarship under this
provision (but would need to meet the other eligibility requirements).
Proposed subsection 592K(7B) would make a person
ineligible for the relocation scholarship where they are considered independent
for Youth Allowance purposes and, on the day six months before the person
commences their course, their usual place of residence was outside Australia.
As independent young people are only eligible for Youth Allowance where they
are considered disadvantaged by personal circumstances, this would preclude
some disadvantaged young people who have recently returned from overseas for
whatever reason from receipt of the relocation scholarship.[77]
Proposed subsection 592K(7C) would make a person
ineligible for the relocation scholarship where their place of study is, at the
time of qualification, outside Australia. The location of their place of study
is worked out using principles in a legislative instrument provided for by
subsection 592K(8) (the Explanatory Memorandum refers to a non-existent
subsection 592J(8) and replicates an identical error in the Explanatory
Memorandum to the 2017 Bill).[78]
Schedule 2—Education entry payment
Schedule 2 introduces new payment rates for the EdEP, with
lower rates payable for those not undertaking full-time study. The new tiered
rate structure will be:
- $208
per annum (the current rate) for study loads between 76 per cent and 100 per
cent of a normal full-time study load
- $156
per annum for study loads between 51 per cent and 75 per cent of a normal
full-time study load
- $104
per annum for study loads between 26 per cent and 50 per cent of a normal
full-time study load
- $52
per annum for study loads of 25 per cent of a normal full-time study load.
The Government’s rationale for the changes is set out in
the Explanatory Memorandum:
The amendments made ... by Schedule 2 better target education
entry payment by tailoring the rate of payment to the study load undertaken by
the student. This is intended to better reflect the costs students incur as
part of their study. Students undertaking part-time study loads do not
generally incur the same study costs as those undertaking full-time study loads
and it is proposed the education entry payment rates reflect this.[79]
The Government has not provided evidence to show how the
new payment rates reflect the initial costs students face commencing different
study-loads. Given that the EdEP has been around the same rate since it was
first introduced in 1992 (it was increased from $200 to $208 in 2000 with the
introduction of the Goods and Services Tax), it is difficult to see how the
rate has any relation to the actual costs associated with commencing study.[80]
While the measure will provide savings for the Government,
it will lower the level of support available to those students receiving income
support who are unable to undertake full-time study. This will reduce the
incentive to undertake study (especially when combined with the similar changes
to the PES) for those without capacity to undertake full-time studies such as
people with disability and those with caring responsibilities.
Numbers affected
The Government previously estimated that around 56,100
EdEP recipients would be paid a lower rate.[81]
The average annual reduction was estimated at $70.36.[82]
Key provisions
Item 1 of Schedule 2 inserts proposed section 665AA
into the SS Act to define normal amount of full-time study
for the purposes of the EdEP paid to Parenting Payment Single recipients. A
normal amount of full-time study will be:
- for
a course of study which is within the meaning of the Higher Education
Support Act 2003 and which has Commonwealth supported students (as
defined in that Act) enrolled in the course–a full-time student load for that
course
- for
a course outside the meaning of the Higher Education Support Act 2003 or
which does not have Commonwealth supported students enrolled, and for which the
education institution defines an amount of full-time study that would be
typically undertaken by a full-time student–the amount defined by the
institution or
- for
any other course of study–an amount equivalent to the average amount of
full-time study person would have to undertake in order to complete the course
in the minimum amount of time needed to complete it.
Item 2 repeals and substitutes section 665B which
sets out the rate of EdEP to be paid to the recipient based on the fortnightly
rate of PES payable (as amended by Schedule 3 of the Bill). This will link
rates of PES and EdEP payable to those eligible for both supplementary payments
based on their study load. The equivalent rates are set out in Table 4.
Table 4: study loads corresponding to PES and EdEP rates
| Study load (% of full-time) |
PES rate (per fortnight) |
EdEP rate (annual) |
| 76–100% |
$62.40 |
$208 |
| 51–75% |
$46.80 |
$156 |
| 26–50% |
$31.20 |
$104 |
| 25% |
$15.60 |
$52 |
| Less than 25% |
$0 |
$0 |
Source: Explanatory
Memorandum, Social Services Legislation Amendment (Better Targeting Student
Payments) Bill 2019, p. 11.
The rate of EdEP is based on the
rate of PES payable for the first day of the current calendar year for which
the PES is payable.
Similar amendments to item 2 are
made to relevant sections providing for the rate of EdEP payable to other
pension payment recipients:
- item
3 amends the EdEP rate for Disability Support Pension (section 665F)
- item
4 amends the EdEP rate for Special Benefit (section 665N) and
- item
11 amends the EdEP rate for Carer Payment (section 665ZFB).
Rates of EdEP for other qualifying payments are worked out
based on the percentage of the normal amount of full-time study (the percentage
is the relevant percentage) that the Secretary of the Department
of Social Services is satisfied that the person will be undertaking on the
first day of the calendar year the person undertakes study in that course.[83]
The rates of EdEP corresponding to study load for these payments are the same
as those set out in Table 4.
Amendments are made to the relevant sections providing for
the rate of EdEP payable to different payment types to require that the relevant
percentage be worked out and showing the corresponding payment rate:
- item
7 amends the EdEP rate for Newstart Allowance (section 665V)
- item
10 amends the EdEP rate for Widow Allowance (section 665ZD)
- item
14 amends the EdEP rate for Partner Allowance (section 665ZR) and
- item
17 amends the EdEP rate for Parenting Payment Partnered (section 665ZV).
Items 19–23 amend the VE Act to
make similar adjustments to the rate of EdEP paid to certain recipients of the
Partner Service Pension, Invalidity Service Pension or Income Support
Supplement.
Schedule 3—Pensioner education supplement
Schedule 3 will introduce a new rate structure for the
PES, with lower rates payable for those not undertaking full-time study. The
Schedule will also prevent payment of the PES during semester breaks and
holiday periods.
The new rate structure will be:
- $62.40
per fortnight (the current rate) for study loads between 76 per cent and 100
per cent of a normal full-time study load
- $46.80
per fortnight for study loads between 51 per cent and 75 per cent of a normal
full-time study load
- $31.20
per fortnight (the current part-rate) for study loads between 26 per cent and
50 per cent of a normal full-time study load
- $15.60
per fortnight for study loads of 25 per cent of a normal full-time study load.
The proposed changes will also apply to the PES paid under
the ABSTUDY Scheme and the Assistance for Isolated Children Scheme.[84]
The Explanatory Memorandum to the Bill states that the
amendments will ‘better align pensioner education supplement fortnightly rates with
a person’s study load’.[85]
As with the EdEP changes, the Government has not provided
any evidence to demonstrate the different costs faced by students with
different study loads, nor how the proposed PES rates are related to those
costs.
The measures will provide savings to the Government but
will lower the level of support available to those students receiving income
support who are unable to undertake full-time study. The changes, combined with
the EdEP measures in Schedule 2, will reduce the incentive to undertake study
for those without capacity to undertake full-time studies such as people with
disability and those with caring responsibilities.
Numbers affected
The Government previously estimated that around 31,000
full-rate PES recipients and 1,200 part-rate recipients each year would be paid
lower rates under the changes to the rate structure.[86]
All PES recipients would no longer receive the PES during semester breaks or
holiday periods.
Key provisions
Item 1 repeals subsections 1061PB(3) to (5) of the SS
Act and inserts proposed subsections 1061PB(3) and (4). The current
subsections set out when a person is taken to have been undertaking qualifying
study for the purposes of the PES from 1 January, 1 July and until 31 December.
The subsections allow certain PES recipients, depending on their course of
study, to be considered as undertaking qualifying study for the whole calendar
year. The proposed subsections provide that an individual will not be not be
considered to be undertaking qualifying study on a day ‘if the day does not
fall within a study period’ or on a day ‘if the day falls within a period of
vacation that occurs during a study period’.
The term ‘study period’ is not clearly defined. The
proposed subsections give an example of ‘a semester’ but it is not entirely
clear how teaching breaks within a semester might be treated (although it
appears that they may be covered by proposed subsection 1061PB(4) and would
therefore not be considered to be a period where the person was undertaking
qualifying study) and how other types of study calendars would be accounted
for. The NSSRN suggested that the proposed provision would apply to holiday
breaks during a semester when students continued to undertake activities
related to study: including completing assignments and attending campus.[87]
It is also unclear how the Department of Human Services
will verify study periods—whether these will be provided by claimants or by
education institutions.
Item 2 repeals and substitutes section 1061PZG
which sets out the new rate schedule for PES. The rate is worked out by first
determining the person’s relevant percentage of the normal amount
of full-time study (as defined at section 1061PF). The person’s relevant
percentage corresponds to the payment rate set out in proposed subsection
1061PZG(4)—the relevant rates are set out in Table 5.
Table 5: study loads corresponding to PES rates
| Study load (% of full-time) |
PES rate (per fortnight) |
| 76–100% |
$62.40 |
| 51–75% |
$46.80 |
| 26–50% |
$31.20 |
| 25% |
$15.60 |
| Less than 25% |
$0 |
Source: Explanatory
Memorandum, Social Services Legislation Amendment (Better Targeting Student
Payments) Bill 2019, p. 21.