Bills Digest No. 189 1997-98
Student and Youth Assistance Amendment Bill 1998
WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments. This Digest does not have
any official legal status. Other sources should be consulted to determine
the subsequent official status of the Bill.
CONTENTS
Passage History
Purpose
Background
Main Provisions
Concluding Comments
Endnotes
Contact Officer & Copyright Details
Passage History
Date Introduced: 25
March 1998
House: House of Representatives
Portfolio: Schools,
Vocational Education and Training
Commencement: Royal
Assent, subject to provisos.
Purpose
To make a range of minor amendments to the loan scheme
available to tertiary students known as the Austudy Supplement.
Background
The Austudy/Abstudy financial 'Supplement' was introduced
on 1 January 1993. Legislative provisions relating to it are contained
in Part 4A of the Student and Youth Assistance Act 1973 (the SYA
Act).
The scheme was designed to give tertiary students an
additional income support option, in addition to application for Austudy
or Abstudy payment. The loan scheme involves students 'trading in' a certain
amount of their Austudy payment in order to receive a greater amount of
Austudy Supplement, in a $1 for $2 trade. In this way students have been
able to increase their total payment income per fortnight.
This Bill makes a number of relatively minor fine-tunings
of the scheme, and involves no major departures from the overall policy
position already set within Part 4A of the SYA Act.
The government has indicated that the precise detail
of this Bill will depend to some extent on the passage of the Social Security
Amendment (Youth Allowance) Bill 1997:
The measures in the Student and Youth Assistance Amendment
Bill apply to Austudy and Abstudy beneficiaries who either have a Financial
Supplement loan or who are eligible to obtain one. Subject to the passage
of the Youth Allowance legislation, the Government will move appropriate
amendments to the Bill to reflect the impending repeal of the Austudy
scheme.(1)
Main Provisions
The amendments to be made by this Bill are contained
in a single Schedule containing 25 items.
Commencement
Clause 2 provides the details of the commencement
of the proposed Act. The general principle is that the Act is to commence
upon Royal Assent. However Items 19 and 20 are to be taken to have commenced
by 1 July 1998 if the Act does not receive Assent by that date. In addition
Item 7 relating to the cooling off period is to commence on 1 January
1999.
Schedule 1
Schedule 1 makes amendments to the Student
and Youth Assistance Act 1973. Clause 3 of the Bill indicates
that the schedule amends that Act and other Acts where necessary. Other
legislation that the Bill touches upon includes the Higher Education
Funding Act 1988 and the Bankruptcy Act 1966.
Clarification and refinement amendments
Item 2 repeals subsection 7(8) of the Act and
inserts new subsections 7(8) to 7(14) in order to qualify the existing
section, in order to prevent misuse of section 7(8) by persons seeking
to avoid conviction in the event of their having fraudulently obtained
Austudy benefits by making a repayment of the benefits.
Item 3 aims to correct a misleading reference
in the section 12A of the Act relating to the discounting of the loan
debt available where a student makes early repayments. At present the
reference to a 15% discount is potentially misleading as the discount
applied in practice is an amount of money, not a percentage.
Item 4 aims to remove another misleading expression,
found in section 12C of the Act. This is the phrase " , or apart from
this Part would qualify," in subparagraph 12C(1)(b)(I) which suggests
that Part 4A might prevent students from qualifying for Austudy or Abstudy.
Item 5 amends section 12F(1)(a) of the Act in
order to make a minor amendment to bring the legislation into accordance
with administrative practice. The effect will be to require the Secretary
to determine whether an applicant for Austudy or Abstudy is eligible for
the Supplement.
Item 6 amends section 12G of the Act to remove
drafting which does not reflect the policy intention that a student may
apply for the Supplement only while an 'eligible student', unless prevented
from applying by circumstances beyond his or her control.
Cooling off period
Item 7 inserts proposed sections 12KA and
12KB into the Act. The sections will introduce a 14 day 'cooling off'
period for applications for the Supplement. This will enable students
to reconsider their application for the Supplement and to, if they wish,
withdraw their application without penalty.
The proposed section 12KB allows for a student
who wishes to receive Supplement payments sooner to elect to waive his
or her right to withdraw an application.
Cessation of Supplement payments in certain circumstances
Item 8 sets out a new section to replace the existing
explanatory section, being section 12P. Division 4 of Part 4A already
allows for the cessation of Supplement payments in certain circumstances.
However the proposed item 9 will insert new sections
12QA, 12QB and 12QC, in order to provide for the situations
where:
- a person is found to be eligible only for a reduced maximum amount
of supplement and has already been paid that total amount; or
- a student fails to notify the Secretary, as required, of relevant
changes in circumstances within the prescribed period and thereby is
overpaid; or
- a student provides false or misleading information and thereby is
overpaid.
Correction of provisions relating to discount for early repayments
Items 15,16,17,18 relate to certain proposed corrections
of provisions relating to the precise amount of discount available for
early repayments of the Supplement during the contract period under section
12ZA. Items 15 and 16 amend section 12ZA(7) of the Act which
provides for calculation of the discount available.
The amendments contained within item 17 are designed
to bring the SYA Act in line with the policy intention that if a person
repays a Supplement debt in full during the contract period, she or he
should be entitled to the same 15% discount regardless of whether payments
are made in instalments or in one lump sum. At present the drafting of
the formulas within section 12ZA are such that the discount provided is
unlikely to precisely equal fifteen percent.
Repayment of Supplement through the tax system
Division 6 of the SYA Act provides for the repayment
of Supplement payments through the tax system, in much the same manner
as Higher Education Contribution Scheme (HECS) repayments.
Item 19 amends section 12ZK of the Act
which relates to compulsory repayments in respect of accumulated Supplement
debt.
According to the Second Reading speech delivered by Dr
Kemp, these provisions:
bring up the arrangements for the compulsory repayment
of financial supplement debts up to date by inserting the minimum, intermediate
and maximum prescribed amounts for the year ending 30 June 1998 and
formulae to determine these amounts for later years.(2)
Further, the proposed amendments in item 19 are
designed to remove any possible inconsistency existing between the indexation
procedure applied to HECS and Supplement (FS) debts.
Concluding Comments
The amendments relating to cessation of loan payments,
repayment of debts, and discounts for early repayment are minor amendments.
They largely mirror the arrangements presently existing in the HECS scheme.
The proposed 14 day cooling off period is likely to be
beneficial for students. It will provide students with a wider range of
options in decision making.
Endnotes
- Second Reading Speech, as provided by the Department, 2.
- Dr Kemp, Second Reading Speech, Hansard, 25 March 1998, 1039.
James Prest
7 May 1998
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ISSN 1328-8091
© Commonwealth of Australia 1998
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