Purpose of the bill
1.1
The Family Assistance Legislation Amendment (Extend Family Assistance to ABSTUDY Secondary School Boarding Students Aged 16 and over) Bill 2019 (bill) was introduced into the House of Representatives on 31 July 2019.
1.2
The bill seeks to implement the 2019–20 Budget measure 'Extending Family Tax Benefit to ABSTUDY recipients aged 16 and over who study away from home'.
1.3
Under the current Family Assistance Legislation, once an ABSTUDY secondary school student who boards away from home to attend school turns 16, the family is no longer eligible to receive Family Tax Benefit (FTB). The bill is designed to extend FTB eligibility to the families of ABSTUDY boarding secondary school students aged 16 and over.
Key provisions of the bill
1.4
Schedule 1 amends the A New Tax System (Family Assistance) Act 1999 and the A New Tax System (Family Assistance) (Administration) Act 1999 to provide that FTB will continue to be payable at the same rates to families of ABSTUDY children who live away from home to study once they turn 16.
1.5
The changes introduced by this bill will commence on 1 January 2020 if the bill is passed and receives Royal Assent in 2019.
Financial implications
1.6
The financial impact of the changes introduced by this bill to FTB eligibility is $36.4 million over the forward estimates.
Legislative scrutiny
1.7
The Senate Standing Committee for the Scrutiny of Bills and the Parliamentary Joint Committee on Human Rights had not reported on their consideration of the bill at the time this report was prepared.
1.8
The explanatory memorandum to the bill notes that the bill 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.
1.9
The explanatory memorandum states that 'the amendments in this bill are compatible with human rights because they promote access to social security and support the right to education'.
Conduct of the inquiry
1.10
On 1 August 2019, the Senate referred the provisions of the bill to the committee for inquiry and report by 5 September 2019.
1.11
Details of the inquiry, including a link to the bill and associated documents, were placed on the committee's website. The committee wrote to relevant organisations inviting submissions to the inquiry by 16 August 2019. Submissions continued to be accepted after that date.
1.12
The committee received 10 submissions and held a public hearing in Canberra on 30 August 2019. The committee thanks all of those who contributed to the inquiry. Submitters and witnesses are listed at Appendices 1 and 2.
Notes on references
1.13
References to the committee Hansard are to the proof transcript. Page numbers may vary between the proof and official Hansard transcript.
Background and current policy
1.14
Family Tax Benefit (FTB) is a means tested payment that helps eligible families with the cost of raising children.
1.15
Eligible Aboriginal and Torres Strait Islander students and apprentices can access support through the ABSTUDY scheme. The ABSTUDY scheme consists of seven different awards which provide a range of allowance payments depending on the individual's study, training and personal circumstances. The allowances are means tested.
1.16
ABSTUDY allowances, while an individual entitlement, are paid directly to the school and boarding provider to cover tuition and boarding costs. FTB is paid directly to the family.
1.17
Currently, families of Aboriginal and Torres Islander boarding students aged under 16 are generally eligible for both ABSTUDY and FTB. However, once the student turns 16, family assistance legislation precludes families of ABSTUDY boarding students from receiving FTB.
1.18
The loss of FTB when an ABSTUDY boarding student turns 16 can represent a significant drop in income support for families, which can be as high as $6,900 per year. This contributes to financial pressure on families who send their child away to secondary school to attain a Year 12 qualification.
Policy rationale for change
1.19
The bill seeks to assist eligible families of ABSTUDY boarding secondary students over 16 years of age with the ongoing costs of raising their child and to provide them with further support to enable their child to access secondary education and attain Year 12 qualification.
1.20
It is estimated that the families of more than 2,000 Aboriginal and Torres Strait Islander secondary school students would benefit from the changes introduced by the bill, and would receive on average an additional $5,911 per year.
Assisting families with costs of raising children
1.21
According to the Department of Social Services (DSS), this bill addresses a policy anomaly that currently leaves families under financial pressure to cover the ongoing costs of their children's daily incidentals while they are away at school as well as their essential living costs when they are at home during school holidays.
1.22
The vast majority of inquiry participants were of the view that the bill is addressing a significant area of need for families and would assist with covering the costs of clothing, toiletries, medicines and pocket money when a child is away at boarding school.
Improving school retention
1.23
For many Aboriginal and Torres Strait Islander students living in remote communities, boarding schools represent the sole form of secondary schooling available to them.
1.24
Aboriginal and Torres Strait Islander boarding students are disproportionately dropping out of boarding schools around the age of 16. Data from the Department of Human Services show that the number of ABSTUDY boarding students drops by approximately 60 percent between the age of 15 and 17.
1.25
Indigenous Education & Boarding Australia (IEBA) reported that 'many Indigenous families are deliberately withdrawing their children when FTB ceases' and stated:
This is evidenced through the anecdotal accounts from experienced senior managers in boarding schools and residences and the number of students whose boarding ceases upon them turning sixteen.
1.26
Similarly, DSS reported that their consultation with schools and the boarding sector has indicated that a factor in dropping out of school at age 16 is the loss of FTB.
1.27
IEBA submitted that the current legislation has created 'an unintended exit point for students' and 'denies many students from remote Australia the opportunity to complete their education'.
1.28
DSS is of the view that extending FTB eligibility will increase school retention as 'it will remove an existing perverse incentive for students to drop out school at 16'.
1.29
Similarly, IEBA believes that the measures in the bill will improve retention rates.
1.30
However, the Association of Heads of Independent Schools of Australia (AHISA) and the Australian Boarding Schools Association (ABSA) warned that extending FTB eligibility 'cannot be expected to provide a one shot quick fix to promote retention' but acknowledged that it will 'remove what amounts to a financial disincentive from the complex mix of pressures that influence students' decision making on whether to complete their schooling'.
Increasing Year 12 completion
1.31
In his second reading speech to the bill, Minister for Communications, Cyber Safety and the Arts, the Hon Paul Fletcher explained that the changes introduced by this bill will increase the proportion of Indigenous students who complete Year 12.
1.32
DSS pointed out that the bill will support more students to complete Year 12, which is consistent with the Australian Government's focus on closing the gap in educational attainment between Indigenous and non-Indigenous students.
1.33
Catholic Schools NSW is also of the view that the provisions of the bill will help students to complete school, leading to improved employment opportunities.
1.34
Similarly, Dr Christopher Hayes, Headmaster at St Joseph's College, Hunters Hill, believes 'it will encourage further school completion to Year 12' and 'this will improve the chances of closing the gap'.
Addressing stakeholder recommendations
1.35
The bill aligns with recommendations from a range of stakeholders to improve Indigenous education outcomes.
1.36
This includes addressing the recommendations from the 2014 Forrest review Creating parity. The Forrest review recommended that Indigenous families with children at boarding school have access to FTB until students finish Year 12 in recognition of the costs parents incur for their children.
1.37
The bill also addresses recommendations from the House of Representatives Standing Committee on Indigenous Affairs' report on Indigenous education.
Building on '50 Years of ABSTUDY'
1.38
In the 2018–19 Budget, in recognition of the 50th anniversary of ABSTUDY, the government invested $38.1 million, over five years, to improve support for Aboriginal and Torres Strait Islander students who need to study away from home. This included more flexible travel provisions and the portability of ABSTUDY payments if students change schools.
1.39
This bill builds on the '50 years of ABSTUDY' budget measure to provide further support to families of boarding secondary school students aged over 16.
Issues raised in evidence
1.40
Whilst supporting the bill because it will alleviate some financial pressure on families, some submitters expressed the view that more is required to increase retention of boarding students and rates of students completing Year 12.
ABSTUDY funding
1.41
Inquiry participants expressed concern that the current quantum of ABSTUDY allowances paid to boarding schools is not sufficient to cover the costs of education, accommodation and day-to-day needs of Aboriginal and Torres Strait Islander students.
1.42
Submitters argued that current ABSTUDY funding does not recognise the additional care needs of this cohort, which often faces additional health and social challenges compared to non-Indigenous boarding students.
1.43
The Independent Schools Council of Australia is calling for a review of how ABSTUDY is calculated and administered, pointing out that the House of Representatives Committee on Indigenous Affairs made a similar recommendation in its 2017 report.
1.44
IEBA also drew the attention of the committee to the broader issue of Indigenous boarding funding, arguing that Indigenous boarding should not be covered through a welfare payment but addressed as an education expenditure.
Complexity of the system
1.45
Submitters contended that families struggle to navigate the ABSTUDY allowance system. For example, Mrs Robyn Yates, Associate Chief Executive, Policy at the Association of Independent Schools of New South Wales stated :
[…] the application system, the eligibility system, the payment system and the accountability system are complex. It is great when you have a school that can support the parents in working through that, but it is not universal.
1.46
Submitters were of the view that the system needs to be simplified so families can understand it and access support for their children's education.
Lack of engagement with families to improve education outcomes
1.47
Remote Indigenous Parents Australia (RIPA), a grassroots voice for Indigenous parents and families, contended that there is a critical need to address the overall lack of engagement with remote Indigenous communities and parents to understand their educational aspirations and improve education outcomes in remote communities.
Committee view
1.48
The committee notes the strong support of stakeholders from the education and boarding sector as well as from parents' associations for the intent of the bill. The committee strongly agrees with submitters that the bill is addressing a significant area of need for families. It will likely make a significant difference for families and students as it will assist with covering the costs of daily incidentals at boarding school and daily costs during the school holidays.
1.49
The bill also builds on previous ABSTUDY student measures, which contribute to achieving improved educational outcomes for Indigenous students, including secondary school boarding students from remote Australia. It strongly aligns with the government's commitment to Closing the Gap.
1.50
Whilst outside the scope of the bill and this inquiry, the committee acknowledges the range of concerns raised by the education sector and parents' associations. Evidence received by the committee suggests that some families find it difficult to understand and access the ABSTUDY allowance system. The committee notes the challenges faced by boarding schools in meeting the social, emotional and health care needs of some of their students coming from remote communities.
1.51
The committee recommends that the bill be passed.
Senator Wendy Askew
Chair