Chapter 2 - Student income support: An overview
There is little doubt that the current arrangements sometimes
target ineffectually, basically because there is relatively little sensitivity
shown to the varied financial needs and circumstances of the potential
clientele. The essential challenge for reform is to improve the targeting so as
to ensure that the right amount of assistance is delivered to those who most
need it.[11]
2.1
A review of basic principles underpinning the Austudy
scheme in 1992 by Professor Bruce
Chapman, which was commissioned by the then Department
of Education and Training (DEET), addressed a perceived lack of policy focus
and direction in the area of student income support.[12] The report noted that government
support for students has existed in one form for many decades. Teacher
scholarships provided by state governments from the 1950s were gradually phased
out when the Commonwealth Government introduced the Tertiary Education
Assistance Scheme (TEAS) in 1974. This scheme and a number of related educational
allowances were combined in 1983 to form Austudy.[13] The most recent change to the income
support system of relevance to this inquiry was the introduction of the Youth
Allowance scheme in July 1998.
2.2
While the objectives of the various income support
schemes have changed over time, all of the programs, including the most recent
changes in 1998, have included as part of their rationale the notion that
specific assistance is required for full-time students from disadvantaged
backgrounds. However, the review of Austudy by Chapman found that financial
assistance to higher education students could have been better targeted. The
remainder of this chapter considers the main features of the current income support
measures, and discusses a range of policy issues which have been raised in
evidence to this inquiry. The issues relate to the collection and analysis of
official data on the effectiveness of income support payments, Centrelink's
service delivery and customer relations, and the extent to which current income
support measures encourage access to higher education, especially for students
from disadvantaged backgrounds and indigenous students.
Student income support schemes
2.3
The current income support system consists of a number
of distinct programs with specific eligibility criteria directed at particular
groups in the community. According to the submission from the Department of
Family and Community Services (FaCS), income support for students:
...is intended to encourage young people themselves and their
families to help young people stay in education and training and to enable
people in older age groups to return to study. Assistance is targeted primarily
towards young people from low-income backgrounds undertaking post-compulsory
schooling and tertiary study.[14]
2.4
The focus of this inquiry is the major support programs
– Youth Allowance, Austudy and ABSTUDY – and issues surrounding the eligibility
criteria which relate to the age of independence, income test thresholds and
whether the schemes provide Rent Assistance. The committee notes that income
support payments are also made under a number of other supplementary
study-related schemes for people receiving benefits such as the Newstart
Allowance and the Parenting Payment and Disability Support Pension. These
schemes include the Education Entry Payment and the Pensioner Education
Supplement and Mobility Allowance.[15]
Youth Allowance
2.5
The Youth Allowance payment, which was introduced from
1 July 1998, replaced the Youth Training Allowance, Newstart and Sickness Allowance
for under 21 year olds, the existing Austudy payment for under 25 year olds,
and the higher rate of Family Allowance for secondary students. According to
FaCS, Youth Allowance was introduced to remove disincentives for unemployed
people to participate in full-time study or training and recognise the
diversity of school to work pathways. Several measures were introduced to
achieve this aim: young people less than 18 years had to be in full-time
education or training, and Rent Assistance became available to eligible students.
Other measures included an 'income bank' for full-time students, the extension
of parental means testing to 18 to 20 year-old job seekers and changes to
eligibility criteria to broaden the coverage of payment among students.[16]
2.6
The core objectives of Youth Allowance, as described in
the FaCS submission, are to:
- ensure that eligible young people receive income
while studying, looking for, or preparing for, paid employment;
- encourage young people to choose further
education or training over job search if they do not have sufficient skills to
obtain long-term employment; and
- encourage young people to undertake a range of
activities that will promote entry into employment.[17]
2.7
While recipients of Youth Allowance must meet residency
and activity test requirements, it is the parental means test which has the largest
bearing on who is eligible and the rates of payment. The parental means test,
of which details are included in the FaCS submission, consists of three
elements: the family assets test which has a current value limit set at $502,750,
the combined parental income test threshold which is currently set at $28,850 and
the family actual means test (FAMT), which relates to family spending and
savings. The parental income test threshold is indexed each January in line
with the CPI. The rate of Youth Allowance payable is reduced by 25 cents for every
dollar over the threshold. Centrelink figures on the current rates of pay for Youth
Allowance, Austudy and ABSTUDY and information about the eligibility criteria
are reproduced at Appendix 4.
2.8
The criteria for determining independence and
dependence are fundamental to understanding the Youth Allowance scheme. Briefly,
Youth Allowance recipients may be assessed as independent of, or dependent on,
their parents. If a student is assessed as dependent, the parents' income and
assets are considered in determining eligibility. The presumption is that parents
with sufficient resources will provide financial and material support to their
young children while they are undertaking study. According to FaCS, this is
consistent with government and community expectations. The committee notes that
while it may seem fair to assume that parents will support their children at
university in line with community expectations, many families, especially from
remote and regional areas, cannot do so. This issue was raised in a number of
submissions to this inquiry. A common theme was that the Government is out of
touch with the financial and social circumstances facing many low to middle
income families.
2.9
Parental means testing does not apply if the person who
is applying for Youth Allowance is assessed as independent. While independence
for Youth Allowance purposes can be obtained in any number of way (and the FaCS
submission includes a long list of criteria), it is the age at which a person
is considered independent which has generated the most interest in the written
submissions. The age of independence is currently set at 25 years. The
committee notes that during the mid-1990s it was reduced from 25 to 21 years,
only to be increased again to 25 years in 1997.[18] The committee notes that the age of
independence was examined carefully by the Senate inquiry into Austudy in 1995,
when the age of independence was 22 years. The report of that inquiry
recommended that a detailed analysis of the costs and benefits associated with
a reduction from 22 to 21 years be undertaken. There is no evidence that an
analysis of this kind has ever been undertaken by the Government. Concerns
about the effect of the current age of independence are examined in more detail
in chapter 3.
2.10
There are specific workforce participation criteria
which young people can use to establish financial independence from their
parents. To be assessed as independent under these criteria, a young person
must have:
- worked full-time for 30 hours a week for at
least 18 months in a two year period since leaving school;
- worked part-time for at least 15 hours a week
for at least two years since leaving school; or
- earned an amount equivalent to 75 per cent of
the Commonwealth Training Award Rate in an 18 month period since leaving
school.[19]
2.11
According to the FaCS submission, the 18 months of
part-time work 'is a sufficiently long period to demonstrate that a young
person has established and sustained their financial independence from their
parents'.[20] However, like the age of
independence, the committee notes that many submissions expressed serious
reservations about the stringent nature of the workforce participation
requirements, which are examined in the following chapter.
Austudy and ABSTUDY
2.12
While Youth Allowance is designed principally for young
people under the age of 25, Austudy is a separate income-support program for
students who commence full-time studies or training when they are 25 years or
older. Austudy recipients are considered independent of their parents. Only
their income and assets (and the income and assets of their partner) are
considered in determining eligibility.[21]
While the introduction of Youth Allowance in 1998 created parallel schemes for
students, each with slightly different rules and degrees of flexibility, it resulted
only in minimal change for full time students. The most important change was
the addition of Rent Assistance for recipients of Youth Allowance. Austudy is
the only income support scheme that does not attract Rent Assistance.[22]
2.13
The ABSTUDY program is similar to Youth Allowance and
Austudy, except that it is designed specifically for indigenous students who
want to stay at secondary school or go on to further studies.[23] As with Youth Allowance and Austudy,
eligibility is subject to income and asset tests for either parent or the
student.[24] The level of income support
payable under ABSTUDY is determined by the age of the student, whether the
student has approval to live away from home and the level of income the
student, their parents or partner receives. The maximum rates payable under ABSTUDY
are aligned with those payable under the Youth Allowance scheme for students up
to the age of 21 years.
2.14
Before the Government introduced major changes to ABSTUDY
in 2000, it was widely acknowledged that it provided indigenous students with some
financial advantages compared with recipients of other income support payments.
Indigenous students received additional allowances for essential course costs
and for travel costs in situations where students had to move location in order
to attend university. Policy changes which took effect from 1 January 2000 further aligned ABSTUDY with the
operations of Youth Allowance and Austudy and, according to evidence from the
National Tertiary Education Union (NTEU), further lowered the level of income
received by the majority of indigenous students.[25] The NTEU expressed the view that
changes introduced in 2000, particularly to the Away From Base Component,
amounted to a major restructure which cut back the components that were
designed to make the scheme culturally and economically relevant to indigenous
students.[26] The committee examines
these changes and their impact on indigenous participation and access to higher
education in chapter 3.
Policy neglect
2.15
There is an underlying concern in evidence that income
support for students has suffered from policy neglect and bureaucratic inertia
since the early 1990s, if not before. The committee is concerned that there has
not been a government initiated review of the entire income support system
since Professor Chapman's
study in 1992. The Chapman review followed the report of a House of
Representatives inquiry into student financial assistance in 1991 (the Price Report).
That report made a number of recommendations, including that there be a
systematic review of Austudy. Since then, certain issues relating to income
support for students have been examined by the Senate's education references committee.[27] The 1995 report of the inquiry into the
administration of Austudy examined difficulties with the administration of the
scheme and possible changes to improve the delivery of payments to students. The
report's findings and recommendations were ignored by government.
2.16
The study completed in 2001 under the auspices of the
Australian Vice Chancellors' Committee (AVCC), Paying Their Way, is another example of a report that has been
ignored. Dr Ian Dobson, a Research Fellow at the
Centre for Population and Urban Research at Monash University, pointed out that
publication of the AVCC's study was an appropriate time for the Government to
commission a large study to examine how the student experience has changed and
how income support measures could be brought into line with the financial needs
of students. The Government, however, not only ignored the AVVC's report but also
a number of research publications from the Centre for Population and Urban
Research. Dr Birrell observed that the Government has been reluctant to revisit
the income support system in the light of new evidence: 'Every time we have put
out statistics on this they have been grabbed and pushed into the front line of
debate but that has never been sustained'.[28]
2.17
The committee believes that student income support
policy has not changed substantially over the past five years. One submission
noted that although the income support system has developed over time in
response to changes in Australian society, some of the main income support
issues facing young people have not been addressed by the Government.
Incremental policy change since the mid 1980s has not increased students'
access to a living income. The Youth Affairs Council of Victoria argued:
Young people and their advocates are raising many of the same
issues today as they did two decades ago. Over the years, young people have
repeatedly voiced concerns about the level of income they receive and the
subsequent poverty they experience, the degree to which they are eligible to
receive income support and the complexity of the system.[29]
2.18
The committee sought the views of witnesses in an
effort to understand why current policy on student income support is so out of
step with the financial circumstances of students. Dr
Birrell suggested that in the current
political climate, with its prevailing 'user-pays' mentality, students in
universities are viewed as beneficiaries of government subsidies who eventually
make substantial financial gains from this public investment through high
income earning careers.[30] It was also
suggested that the information required to highlight the deficiencies of the
current system in a convincing way has not been made publicly available. The
committee does not believe that the lack of information is a sound reason for
government inaction. Anecdotal and empirical evidence on the state of student
finances has been available for a number of years.
2.19
The committee notes that the students who appeared
before it spoke positively and passionately about how adequate income support
for students is arguably the most intelligent investment a government can make
in the future of Australia. The committee fully supports the view of one
witness that the education that students gain should be 'beneficial, dynamic,
engaging and really positive and vibrant for society'.[31] To realise this ideal would require a
radical shift in the government's thinking. The higher education system would
need to be seen not as a financial burden to be minimised by the government
through relentless cost-shifting. Instead, it would need to be seen as 'an
investment in...citizens and in society economically, culturally and socially.
Education, full stop is an investment. It is an investment that the government
and society make in their people'.[32]
2.20
The committee notes in particular the view of the
Australian National University Students' Association, that the financial plight
of students is a direct consequence of the government having shifted the cost
of higher education directly on to students and their families without any commensurate
or proportional increase in income support. Mr
Max Jeganathan
made the valid point that the education of students:
...should not be considered a cost and a burden that governments
are trying to shrug off or minimise their liability over...It is not about
cost-efficiency; it is about making a real commitment financially and morally
to a group of people that are very important to the future of the country in
all respects. I think that is what has been forgotten.[33]
2.21
The submission from FaCS does not provide a detailed policy
rationale for the various income support measures, or a defence of the system's
various anomalies. The committee is surprised by this because of the
significant financial outlays for student income support which the department
administered. During 2003-04, for example, the Government provided
approximately $2.3 billion through Youth Allowance, $259 million through
Austudy and $168 million under the ABSTUDY scheme.[34] In addressing the issue of equitable
access to education, FaCS referred only to a Youth Allowance Evaluation Report
of 2002 which apparently provides a glowing assessment of that program's effectiveness
in encouraging more young people to stay in education and training. The FaCS
submission claimed that the flexibility built into Youth Allowance, which
enables people to qualify for financial assistance while undertaking a range of
activities, '...allows any barriers to participation that the young person may
have to be addressed prior to participation in the employment market or further
education or training'.[35] As will
become clear later in the report, these claims have been seriously challenged
by independent research on the effectiveness of Youth Allowance and by the
overwhelming majority of submissions to this inquiry.
2.22
The committee notes that a number of witnesses supported
the view that a comprehensive assessment of the effectiveness of the income
support system is long overdue, and should be conducted on a more regular basis
and at arms length from government. The National Union of Students (NUS) cautioned
against the 'grand review' of income support every twenty or so years, which is
an ineffective way for governments to approach this issue. It argued for a
review of income programs approximately every three years by an expert body, with
findings to be made available for public and parliamentary scrutiny. The
committee believes that such a review is necessary because the current living
and financial conditions of students is dynamic and fluid, and government
policies are clearly having an impact on students.
Recommendation 1
The committee recommends that the Government commission an independent
expert panel to review the performance and effectiveness of the student income
support system. Such a review should include public consultation and any
reports and findings should be tabled in the Parliament. The committee
recommends that the panel include a nominee from each of the key stakeholder
groups.
Why student poverty is missing from
the policy agenda
2.23
The committee believes that one of the main consequences
of policy neglect of student income support is that the financial plight of
students and the incidence of student poverty have not registered as
significant policy issues. Although this was referred to briefly at the Melbourne
public hearing, the committee believes the Government should pay closer
attention to the issue of student poverty and its underlying causes. Part of
the problem is that student poverty is poorly understood and insufficiently
researched, which means that little is known about how students complete their
university studies while struggling financially. According to Professor
Judith Bessant,
while there is a considerable body of academic research on the socio-economic
status of students when they enter university, their financial profile after
the commencement of study has been largely ignored by researchers and policy
makers.[36]
2.24
The committee believes that raising awareness of
student financial hardship is an important step towards removing barriers to
future reform of the income support system. It also accepts that raising
community awareness of student poverty faces many practical and political
hurdles. Professor Watts,
RMIT University,
argued at a public hearing that students occupy at best a 'discursive space' in
media reports when they engage in protests or similar activities. It was Professor
Watt's firm belief that students are
rendered invisible to policy makers because of negative stereotyping:
[The system] encourages the kinds of things that you see perpetuated
in public discourse—what you can call negative stereotyping of this or that
recipient group. Students are just one of a number of groups that—to use the
vernacular—get it in the neck because they are defined as deviant, problematic,
troublemakers or outside the mainstream.[37]
2.25
The issue has been examined in detail by Professor
Bessant who examined how narratives about
university students within the policy making community and the community more
generally prevent the issue of student poverty from being taken seriously as a
policy issue. Bessant isolated four factors which explain why student poverty
is not included on the national policy agenda:
- The comparatively low social and political
status of students gives them minimal political clout. University is a
relatively short-lived and transitional experience for students which has
practical implications for collective action as well as the political
effectiveness of student groups;
- students experiencing financial hardship do not
have the victim status that is assigned to other youth issues like suicide or
homelessness; thus, as non-victims, public sympathy cannot be solicited and
pity or compassion mobilised to assert influence;
- student poverty is not generally seen to
constitute an immediate social threat that warrants a corrective policy
response in the same way that other youth issues like substance abuse or
juvenile crime do; and
- students are often referred to as a privileged
group, in receipt of a valuable university degree which will stand them in good
stead for life-long earnings and employment security. This characterisation not
only works against students in terms of public sympathy and support in respect
of financial hardship, it also perpetuates a prejudice that can be easily
mobilised with the effect of increasing costs to students.[38]
Data collection and analysis
2.26
The committee believes that the main barrier to any review
of the adequacy and effectiveness of the income support system is the absence
of disaggregated data required for a proper assessment of income support
programs. Dr Bob
Birrell and Dr
Ian Dobson have
published a series of articles on Youth Allowance in which they address whether
the introduction of the Youth Allowance payment in 1998 has improved access to
higher education for young people from low socio-economic backgrounds. The
authors have voiced their concern that the data necessary to undertake a full
assessment of the impact of the system for student financial assistance is not
available in the public domain, and has not been analysed or disaggregated by FaCS
or Centrelink.
2.27
The submission from Dr Dobson, which includes the most
recent and reliable published data on the Youth Allowance scheme, highlights
the limited range of data which Centrelink provides for public scrutiny. It
argues that three particular categories of data are needed to carry out an
informed assessment of the effectiveness of the Youth Allowance scheme: the
number of school, TAFE and university recipients of Youth Allowance,
disaggregated; the proportion of recipients receiving less than the full amount
of the Youth Allowance; and the number of students receiving Youth Allowance
who were assessed as either dependent or independent.[39]
Recommendation 2
The committee recommends that the Department of Education, Science and
Training and Centrelink coordinate the collection of data on income support
measures and that disaggregated data on student income support payments be made
publicly available.
2.28
The committee was encouraged by the positive attitude conveyed
by officers from DEST towards the income support system, which moved from FaCS
to DEST in October 2004. Ms Jessie
Borthwick, Group Manager, Strategic Analysis
and Evaluation Group, told the committee that the administrative change meant that
the department had an opportunity to look afresh at income support for students
in relation to other educational and training policies and the effects of
income support measures on students.[40]
The committee has reason to believe that with responsibility for student income
support returning to DEST, a range of data may now become available through
annual reporting, something which FaCS apparently had stopped doing. Mr
Hastings, NUS, told the committee it was
likely that DEST would eventually report annually on issues such as students who
do not receive any student income support, students withdrawing from university
because of inadequate financial support, and students who defer because of
concerns about lack of funding and resources.[41]
2.29
On the issue of students withdrawing from university as
a result of inadequate financial support, the AVVC indicated to the committee
that it had been approached by DEST regarding a survey of drop-out rates for
students which was being undertaken by the department. Ms
Borthwick advised the committee that the
survey, for which a steering committee consisting of the AVCC, universities and
DEST had been formed, was triggered by discussions between the department and
the education minister. The survey would look especially at the attrition rates
for first-year students, the group that is most likely to drop out of
university.[42] While the survey apparently
will canvass a wide range of issues, the committee expects that DEST will include
in the survey a question or questions relating to income support.
Recommendation 3
The committee recommends that the Department of Education, Science and
Training include in its exit survey of students a question about the level of
income support and whether it was a factor in students withdrawing from
university.
Program efficiency versus policy effectiveness
2.30
The committee is concerned by evidence from the Student
Financial Advisers Network (SFAN) that over the past decade FaCS and Centrelink
have been far more concerned with demonstrating administrative efficiency and
improving client-customer service than monitoring and investigating the
effectiveness of the income support schemes.[43]
This issue was raised with the committee on a number of occasions at public
hearings, and has apparently been an issue of concern for a number of years.
The RMIT Student Union argued that over the last ten years, the focus of
student income support administration has shifted from providing adequate
assistance to enable students to meet their financial needs, to demonstrating
efficiency of throughput and client/customer service.[44] Under a heading entitled 'The
Efficient Delivery of Nothing', the RMIT Student Union submission concluded:
'While Centrelink is more efficient, the question arises: efficient at what?'[45]
2.31
These concerns are consistent with the findings of the
Price Report which concluded in 1991 that DEET's performance indicators
emphasised processing efficiency rather than program effectiveness. The report found
that income support programs had never been properly evaluated and that
billions of dollars had been spent on programs for which the success or
otherwise had never been assessed. The committee believes that nothing substantially
has changed over the past decade.
Recommendation 4
The committee recommends that the Department of Education, Science and
Training develop clear policy objectives and performance indicators for the
student income support system, and that Youth Allowance, Austudy and ABSTUDY be
assessed against these annually. The committee recommends that the results of
these assessments be reported in the Department's annual report on Higher
Education.
Service delivery issues
2.32
A number of student associations and student unions
raised concerns about the quality of service provided by Centrelink and other shortcomings
with its administration of the income support system. The committee notes that
problems with the delivery of income support payments were raised during
previous parliamentary inquiries, relating to the quality of advice provided by
Centrelink, delays with processing applications and Centrelink's ineffective
communication about rights and responsibilities. It was found that students in
breach of Centrelink's administrative requirements faced a reduction in their payment
without first being notified.[46] Recommendations
were made that students should receive balanced, customer-oriented advice
commensurate with departmental obligations of duty of care, and that adequate
publicity and information packages should be made available to enable students to
make informed decisions before applying for financial assistance.[47]
2.33
A number of issues raised in evidence during this
inquiry suggested that service delivery remains a major area of concern for
students and parents, and that problems have not been addressed by the Government.
There is evidence of a lack of adequate and consistent information flowing to
students and parents from Centrelink, especially to prospective students from
rural and regional areas:
At present the information flow from Centrelink to students is
almost non-existent. As a result, students who are Centrelink's customers are
unlikely to have any idea of their eligibility for benefits or any of the other
entitlements that are available to them...
Centrelink has argued that much of its information is 'on line'.
As professionals dealing on a day to day basis with students...SFAN staff are
clearly aware of the inadequacy of providing information in this format to
students.[48]
2.34
Centrelink's plain English, reader-friendly and
comprehensive guide to Austudy has not been updated since 1998. According to
SFAN, the current sixteen page guide to Youth Allowance gives minimal
information to students, and is an inadequate tool for student advisers.
Centrelink's current application form, at thirty-six pages, is more voluminous
and complicated than the tax form put out by the Tax Office.[49] Frustration over the lack of adequate
and accessible information from Centrelink has forced SFAN to produce an internet
based 'money guide', which is a comprehensive explanation of Youth Allowance
and Austudy, including how best to deal with Centrelink staff.
2.35
The President of the Students' Association of the University
of Adelaide, Mr
David Pearson,
told the committee of the frustration which many students experience with the
amount of paperwork involved in applying to Centrelink for income support
benefits, and the financial penalties incurred by students when Centrelink's
administrative process breaks down:
...a problem that many students have is that when they [fax
Centrelink] the vast majority of students who walk through our doors screaming,
it is not about, 'Look at my HECS debt. It's so huge', it is: 'I've been on the
phone to Centrelink for two hours and I still don't understand what they're
talking about...I am always telling them to go and see the welfare officers who
used to work for Centrelink. But they are continually stuffing things up. They
lose the forms that you have to send in every week and, if they lose it, they
will cut your payment and they will not even tell you.[50]
2.36
The National Tertiary Education Union (NTEU) voiced its
concern about the service delivery aspects of ABSTUDY, noting that the program's
restructure in 2003 resulted in a nation-wide reduction of ABSTUDY centres
responsible for processing claims from fourteen to four areas sites – North Australia,
Central and North Queensland, West New South Wales and Western Australia.[51] It is NTEU's belief that the
rationalisation 'has significantly diminished the capability of the
administration of ABSTUDY to take into consideration the specific cultural and
socioeconomic sensitivities relative to indigenous students' applications'.[52] The NTEU's submission noted that a
number of service delivery issues which were identified during the committee's
2001 inquiry into Australia's
higher education needs, continue to create difficulties for students and
prospective students. These include lengthy delays in processing applications,
lost correspondence resulting in further delays, and reports of Centrelink
staff deferring to the expertise of Aboriginal staff, resulting in issues not
being addressed if Aboriginal staff are not available.[53]
2.37
The committee accepts the NTEU's assessment that
problems which continue to affect the service delivery of ABSTUDY will not be
addressed satisfactorily until ABSTUDY is structured as a specialised indigenous
support scheme administered and implemented by dedicated Centrelink officers
who are prepared to communicate directly with indigenous students.[54] This, however, would require a shift
in government thinking and a change in policy from 'mainstreaming' indigenous
education services to accepting that indigenous students often require
specialised advise provided by suitably qualified and trained indigenous staff.
2.38
The committee is concerned by reports that Centrelink has
advised some full-time students to apply for the Newstart payment instead of
Youth Allowance, which provides access to a higher level of pay as well as Rent
Assistance, and that some students have had their benefits cut-off without
notification.[55] The advice to apply
for Newstart means that students are encouraged to reduce their course load in
order to be eligible for unemployment benefits. Miss
Monica Okulicz,
Deakin University Student Association, expressed frustration with Centrelink's
advice, which was considered to be unhelpful and demoralising:
Last year I was in a dire financial situation and Centelink told
me that I should reduce my course load and go on to Newstart. That was their
way of helping me. I think it is very alarming that Centrelink offered this as
an option instead of helping me—that they would regard unemployment as my
best-case scenario.[56]
2.39
Centrelink Deputy Chief Executive Officer, Ms
Carolyn Hogg,
stressed at a public hearing that it is not Centrelink policy to advise
students one way or the other on jobs or learning opportunities. Centrelink's
primary role is to ensure that a person seeking government assistance is made aware
of all the entitlements, including the conditions and rates of payment, and the
implications for the customer's personal circumstances. This advice should
enable the customer to make an informed choice about the most favourable
entitlement.[57]
2.40
On the issue of students having their benefit cut-off
without notification and being left in a dire financial situation, Centrelink
advised the committee that its guidelines require that every effort be made to
contact the customer before payments are stopped: 'In terms of trying to ensure
that students are informed of their rights and obligations, we do this not only
at the time they are granted income support; every Centrelink letter that they
receive subsequently will remind them about key messages and obligations'.[58]
2.41
The committee notes that Centrelink has recently implemented
a range of measures to improve its service delivery outcomes. An example is the
provision of on-line services to enable students to access personal information
and lodge claims for income support over the internet.[59] The committee is also aware that an attempt
was made by Centrelink in 2001 to identify where it might be able to better
assist students, through the formation of a partnerships group with the Student
Financial Advisers Network. The group included FaCS, indigenous
representatives, the National Union of Students, parents and schools
associations and the National Youth Roundtable. However, the group's last meeting
was held in March 2003 and, apparently without participants being notified, has
not been reconvened. Mr Vincent Callaghan,
SFAN, told the committee that while the partnerships group had 'worked very
well', a more effective avenue for communication between FaCS, Centrelink and
their customer organisations was needed to build a more effective income
support scheme.[60]
Recommendation 5
The committee
recommends that a National Partnerships Group, consisting of representatives
from Centrelink, the Student Financial Advisers Network and other relevant
groups, be reconstituted and meet on a regular basis to discuss changes and
difficulties associated with student financial assistance and to make
recommendations to the relevant ministers.
Government senators do not agree with this recommendation.
2.42
The committee believes that notwithstanding efforts by
Centrelink to improve its service delivery, the constant stream of complaints
from students demonstrates that there is significant room for improvement. The
committee accepts the useful suggestions and recommendations included in
written submissions by various student associations and professional student
bodies. These include that Centrelink produce an accessible, comprehensive and
reader friendly guide for students, parents and advisers; review its
information products for students; make consistency of advice a priority in its
training programs; and improve the flow of information to students.[61] The committee believes these are
reasonable and achievable goals that could be implemented in a timely and
cost-effective manner.
2.43
The committee believes that while improvements in each
of these areas will assist students in accessing the income support system, the
nature and extent of the problems with Centrelink's customer service warrant a
comprehensive and independent review of the delivery of income support
payments.
Recommendation 6
The committee
recommends that the Auditor-General be requested to conduct an audit of
Centrelink's delivery of financial assistance to students, paying particular
attention to service delivery issues.
Government senators do not agree with this recommendation.
Student income support and access to higher education
2.44
It is widely recognised by the Commonwealth and state
governments that vocational training and higher education after year 12 is
essential to ensure participation in the workforce in later years. A 1990
report on equity in higher education by the then Department of Employment,
Education and Training stated that people from all groups in society should
have the opportunity to participate in higher education. It noted further that
this goal would only be realised by changing the balance of the student
population to reflect more closely the composition of society as a whole.[62] The AVCC submission noted that people
from poor backgrounds need access to an effective income support system for at
least five years past the age of compulsory education to gain the necessary
education and training for future employment.[63]
Six equity groups are currently included in the Government's Higher Education
Equity program (HEEP): indigenous students; people from low SES backgrounds and
from rural or isolated areas; people with a disability and from non-English
speaking backgrounds; and women in non-traditional areas of study.[64]
General trends
2.45
Several submissions argued that students were prevented
from attending university by their inability to support themselves.[65] Student income support is therefore
considered a vital component of any general strategy to improve access to
higher education, particularly for students from low and middle income
families.[66] Research shows that people
from disadvantaged backgrounds are generally under-represented in higher
education.[67] It was argued by one
student association that the current income support measures do not offer
disadvantaged students the support they need to stay in higher education long
enough to complete their degree.[68]
This was confirmed by the University
of Adelaide which noted that some
students from disadvantaged backgrounds leave university because the cost of
studying and living expenses exceeds the amount of income support they receive.[69]
2.46
Studies by Dr Bob Birrell and others from the Centre
for Population and Urban Research at Monash University have shown that student
finance is at the heart of the equity issue: 'The existence of equity targets
and the well-meaning rhetoric about promoting opportunity emanating from
university equity officers means little if students do not have access to funds
sufficient for their living expenses'.[70]
Their studies have found that young people from lower middle and working class
backgrounds are under-represented in the higher education system. The number of
full-time students aged 19 and above is growing much more rapidly than those
aged 19 or less. The figures show that very few students who move from school
to university are eligible for Youth Allowance. By 2001 only 21 per cent of
students aged less than 19 who were studying full-time received Youth
Allowance. Of these students, about a quarter did not receive the full rate
because their family income was above the income threshold. Analysis of
unpublished Centrelink data shows that the overall increase in the number of
people in receipt of Youth Allowance since 1998 masks movements up and down the
scale according to age:
The outcome is a product of reduced access for young students
and improved access for older students. In the case of young students (aged
less than 19) [the data] shows that the recipient rate has declined
significantly from 33 per cent in 1998 to 21 per cent in 2001. On the other
hand, recipient rates have generally increased for older students.[71]
2.47
The authors concluded that current income support
policy, especially the harshness of the eligibility criteria, discourages young
people from full-time university study at a time when the Government is trying
to improve skill levels. The committee is concerned by these findings. Many
students are entering university part-time in order to earn the income
necessary to become eligible for Youth Allowance, at which time they enrol as
full-time students. This is consistent with the committee's findings about the
effect of the eligibility criteria on students and their families.
2.48
Another issue which is of concern is the under-representation
of rural students in higher education. A paper by Vincent
Callaghan refers to research which indicates
that there is a clear correlation between the participation rates of regional,
rural and isolated students in post-secondary education, and their perception
of their ability to survive financially. It is generally recognised that
students who need to leave home in order to study, including students from
urban areas whose choice of course requires them to live away from home, face
financial disadvantage.[72] Callaghan
refers to 1999 data which shows that students from rural and isolated areas attend
university at 40 per cent of the rate of other students, relative to their
share of the population.[73]
Participation rates for indigenous
students
2.49
The committee acknowledges that indigenous Australians
from remote communities and where English is their second or third language,
are some of the most disadvantaged students in the higher education system.[74] A consistent theme raised in evidence was
that the ABSTUDY scheme is no longer able to provide effective support to
indigenous students. This is a direct result of funding cuts to ABSTUDY in
1997-98 and again in 2000, and of policy changes which have further aligned
ABSTUDY with the entitlements and eligibility criteria for Youth Allowance and
Austudy.[75] The NTEU submission argued
that the changes cut back components of ABSTUDY that were designed to make it
culturally and economically relevant to indigenous students. There is concern over
the changes to the Away From Base Component of ABSTUDY. This particular scheme
provides different levels of assistance for indigenous students who chose to
study close to their home and families for cultural, community or family
reasons. According to the NTEU: 'It is still the main pathway available to
indigenous students from rural, remote and isolated areas to access higher
education and not be forced to leave their communities, families and country'.[76]
2.50
Changes to the Away From Base Component in the 1997-98
budget resulted in payments being made only to indigenous students who study at
an institution located more than 36 hours travel by land away from their home. Students
were not entitled to the allowance if the institution was within a three day
drive of their home. The NTEU submission noted that the changes bore most
heavily on independent indigenous students living in urban locations who had
left remote or regional locations to study. Further changes to the Away From
Base Component were introduced in 2000. Members of the NTEU involved in the
administration of ABSTUDY have argued that the changes have had a detrimental
effect on the level of assistance provided to indigenous students. One of the
changes was a reduction of funded return trips from five to four in any year,
which resulted in a corresponding reduction in the number of residential schools
attended by students.[77]
2.51
The committee is concerned by evidence that the various
changes to the ABSTUDY program have reduced the participation rate of
indigenous students in higher education. The overwhelming response from student
bodies and university administrators is that these various changes to the
ABSTUDY scheme have contributed to the fall in the number of ABSTUDY recipients
from 7789 in 1998 to 5845 in 2001, and are closely related to the overall fall
in indigenous higher education enrolments.[78]
The National Indigenous Postgraduate Association Aboriginal Corporation told
the committee: 'Overall, the changes to Abstudy in 1998 had disastrous effects
on Indigenous enrolments'.[79] This is
supported by the NTEU's submission to the Department of Education, Science and
Training's review of the effect of the ABSTUDY policy changes from 2000. These
have seen a decline of up to 15 per cent in annual indigenous higher education
commencement rates, and a severe reduction in the growth rate of indigenous
participation compared with the rate over previous decades.[80]
2.52
Mr Joel
Wright, NTEU, told the committee that the
decline in indigenous enrolments is directly related to the changes introduced
in 2000:
The introduction of the changes to the guidelines governing the
away-from-base benefits under the Abstudy scheme significantly impacted on the
majority of urban students enrolled in higher education, simply as a consequence
of not recognising that those students had moved from remote areas and rural
areas into an urban environment, in a number of cases as independent students.
As a consequence of the changes to the away-from-home guidelines the majority
of those students were made ineligible for further support under the scheme. On
an initial analysis, they represented 70 to 80 per cent of the total Indigenous
cohort who were negatively affected by those changes.[81]
Recommendation 7
The committee
recommends that the Department of Education, Science and Training undertake an
analysis of the costs and benefits associated with reversing the Government's
changes to the Away From Base Component of ABSTUDY in 1997 and 2000.
Government senators do not agree with this recommendation.
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