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2013-2014
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
SOCIAL SERVICES AND OTHER LEGISLATION AMENDMENT
(STUDENT MEASURES) BILL 2014
EXPLANATORY MEMORANDUM
(Circulated by the authority of the
Minister for Social Services, the Hon Kevin Andrews MP)
SOCIAL SERVICES AND OTHER LEGISLATION AMENDMENT
(STUDENT MEASURES) BILL 2014
OUTLINE
This Bill will reintroduce, with certain modifications, two measures relating to student
entitlements that were originally announced by the previous government in the
2012-13 Mid-Year Economic and Fiscal Outlook and the 2013-14 Budget.
The two measures were removed from the Social Services and Other Legislation
Amendment Act 2014 during its passage through the Senate in March 2014.
Interest charge
The Bill will allow for an interest charge to be applied to certain debts incurred by
recipients of austudy payment, fares allowance, youth allowance for full-time
students and apprentices, and ABSTUDY Living Allowance.
The interest charge will only be applied, from 1 January 2015, where the debtor does
not have or is not honouring an acceptable repayment arrangement. Debtors who
are already making repayments, or who come to a repayment agreement with the
Department of Human Services following implementation of the measure, will not be
charged interest.
The key purpose of the interest charge is to encourage debtors to repay their debt,
in a timely fashion, where they have the financial capacity to do so. At present,
current recipients of income support with debts have their payments reduced until
their debts are repaid. For former recipients of income support, on the other hand,
there is no incentive to repay their debts. Once the interest charge is in place,
debtors who have not been making repayments will have an incentive to engage with
the Department of Human Services to make a repayment arrangement in order to
avoid the interest charge.
The rate of the interest charge will be based upon on the 90-day Bank Accepted Bill
rate, plus an additional seven per cent, as is currently applied by the Australian
Taxation Office for tax debts under the Taxation Administration Act 1953. Over the
last four years, this rate has averaged approximately 10.9 per cent, and currently
stands at 9.69 per cent for the quarter July to September 2014.
Student start-up loans
From 1 January 2015, the Bill replaces the current student start-up scholarship with
an income-contingent loan, the student start-up loan.
There will be a limit of two loans per year of equivalent value to the student start-up
scholarship (currently $1,025 each and to be indexed from 2017). The loans will be
available on a voluntary basis, and will be repayable under similar arrangements to
Higher Education Loan Programme debts. Students will only be required to begin
repaying their student start-up loan after their Higher Education Loan Programme
debt has been repaid.
1
In a departure from the measure introduced in the Social Services and Other
Legislation Amendment Bill 2013 (a departure arising from the 2014-15 Budget),
there will be no grandfathering arrangements for students who had previously
received a student start-up scholarship prior to 1 January 2015.
Financial impact statement
MEASURE FINANCIAL IMPACT
Interest charge Saving of $49.7 million over four years.
Student start-up loans Saving of $2.0 billion over five years.
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
The statement of compatibility with human rights appears at the end of this
explanatory memorandum.
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SOCIAL SERVICES AND OTHER LEGISLATION AMENDMENT
(STUDENT MEASURES) BILL 2014
NOTES ON CLAUSES
Abbreviations used in this explanatory memorandum
Social Security Act means the Social Security Act
Social Security Administration Act means the Social Security
(Administration) Act 1999
Student Assistance Act means the Student Assistance Act 1973
Taxation Administration Act means the Taxation Administration Act 1953
Clause 1 sets out how the new Act is to be cited - that is, as the Social Services and
Other Legislation Amendment (Student Measures) Act 2014.
Clause 2 provides a table that sets out the commencement dates of the various
sections in, and Schedules to, the new Act. Note that two of the provisions in
Schedule 2 (as dealt with by items 115 and 116) are contingent upon whether or not
item 115 of the Minerals Resource Rent Tax Repeal and Other Measures Bill 2014 is
enacted and commences. Items 115 and 116 of Schedule 2 make the same
amendment. However, whether they make that amendment to subsection 3C(1)
or section 3C of the Taxation (Interest on Overpayments and Early Payments)
Act 1983 depends upon the passage of that Bill.
Clause 3 provides that each Act that is specified in a Schedule is amended or
repealed as set out in that Schedule.
1
Schedule 1 - Interest charge
Summary
This Schedule will allow for an interest charge to be applied to certain debts relating
to austudy payment, fares allowance, youth allowance payments to full-time students
and apprentices, and ABSTUDY Living Allowance payments (or any other prescribed
payments). The interest charge will only be applied where the debtor does not have
or is not honouring an acceptable repayment arrangement. Debtors who are already
making repayments, or who enter into a repayment agreement following the
implementation of the measure, will not be charged interest.
The rate of the interest charge applied is determined on a quarterly basis. The rate
is calculated as the monthly average yield of the 90-day Bank Accepted Bill rate for
the previous quarter's mid-month, plus an additional seven per cent. This is
consistent with the rate applied by the Australian Taxation Office for tax debts under
the Taxation Administration Act. Over the last four years, this rate has averaged
approximately 10.9 per cent, and currently stands at 9.69 per cent for the quarter
July to September 2014.
Background
The key purpose of the interest charge is to encourage debtors to repay their debt,
in a timely fashion, where they have the financial capacity to do so.
Once the interest charge is in place, debtors who have not been making repayments
will have an incentive to engage with the Department of Human Services to make a
repayment arrangement in order to avoid the interest charge. The design of the
repayment arrangement will mean that the interest charge will only be applied to
debts of those debtors who have the capacity to repay their debt but are not doing
so.
These amendments will operate at the exclusion of the existing penalty interest
charge scheme contained in the Social Security Act and the Student Assistance Act
in the sense that the existing scheme will no longer apply to debtors covered by the
new arrangements.
The amendments made by this Schedule commence on 1 January 2015.
Explanation of the changes
Part 1 - Amendments
Amendments to the Social Security Act
Item 1 inserts a new item to the table in subsection 1222(2) of the Social Security
Act for the purpose of identifying what methods of recovery will be available for the
interest charge.
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Schedule 1 - Interest charge
Item 2 inserts new subsection 1228B(2A) to clarify that a 10 per cent penalty added
to a debt for the understatement of income is part of the debt. For the purposes of
imposing an interest charge, this will mean that a reference to `debt' will include the
amount of the payment that a person has obtained to which they were not entitled,
as well as any additional 10 per cent penalty added to the debt under section 1228B.
Item 3 amends subsection 1228B(5) so that an additional 10 per cent penalty
imposed for the understatement of income does not apply to a debt due to the
Commonwealth under section 1229G (as inserted by item 6).
The purpose of this amendment is to clarify that an additional 10 per cent penalty
cannot apply to an interest charge under section 1229G. This is because
section 1229B only imposes an additional 10 per cent penalty where a person has
refused or failed to provide information in relation to the person's income or
knowingly or recklessly provided false or misleading information in relation to the
person's income. The interest charge debt due to the Commonwealth under
section 1229G is not dependent on an individual providing information on their
income, so an additional 10 per cent penalty cannot apply to an interest charge debt
under section 1229G.
Item 4 inserts new paragraph 1229(1)(ea) to ensure that a notice in respect of a debt
given to a person under section 1229 specifies the effect of an interest charge if it is
applied to their debt. This will ensure that the person is fully informed of how the
new interest charge will operate.
Item 5 inserts subsection 1229(5) to provide that the existing penalty interest
scheme, as provided for in sections 1229A and 1229AB, does not apply if an interest
charge applies in relation to a person and a social security debt under section 1229E
or 1229F.
Item 6 inserts new sections 1229D to 1229H, which relate to the interest charge.
New section 1229D - Interest charge payable under section 1229E or 1229F on
certain social security debts
The purpose of section 1229D is to set out the debts in relation to which the interest
charge is payable.
New subsection 1229D(1) provides that an interest charge will apply to a person and
a debt if the debt has not been wholly paid and the debt relates to either youth
allowance, austudy payment, fares allowance or any other social security payment
that may be prescribed in a legislative instrument. The power to prescribe other
social security payments in a legislative instrument will provide the flexibility to
extend the interest charge, at a later point in time, to debts relating to other
payments under social security law.
This subsection further clarifies that the interest charge will only apply to youth
allowance students who undertake full-time study or are new apprentices.
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Schedule 1 - Interest charge
New subsection 1229D(1) also provides that the interest charge will apply to a
person and a debt where qualification for youth allowance was in circumstances
prescribed by a legislative instrument. This will allow the flexibility to extend the
interest charge, at a later point in time, to debts relating to youth allowance payments
where qualification for the payment was in circumstances other than where the
student was undertaking full time study or was a new apprentice.
As any extension of these rules would be made through a legislative instrument,
it would be subject to Parliamentary scrutiny and disallowance.
New subsections 1229D(2) and (3) provide that the Minister may make the above
mentioned legislative instruments.
It is relevant that existing provisions within the social security law (see
sections 1229A and 1229B of the Social Security Act) already provide the Minister
with the power to apply, through legislative instrument, a penalty interest charge on
any income support payment debt. This power is greater than that set out by this
Schedule to the Bill because this Schedule carefully prescribes a formula for the rate
of the new interest charge, whereas the existing provisions give the Minister more
open discretion in setting the rate of the interest charge.
Taking into account that any instrument seeking to extend application of the interest
charge will be subject to the scrutiny of the Parliament, and that the power given to
the Minister under the new interest charge scheme is more restrained than that
available under the existing scheme, the new provision in item 6 is not considered to
be an inappropriate delegation of power.
For the purposes of discussion in this explanatory memorandum, the debts that
relate to the payments prescribed in paragraphs 1229D(1)(b) and 1229(1)(c) are
referred to as `relevant social security debts'.
New section 1229E - No repayment arrangement in effect
The purpose of section 1229E is to set out when an interest charge is payable by
persons who have no repayment arrangement in effect.
New subsection 1229E(1) provides that, if a person has an unpaid amount on a
relevant social security debt and, by the end of the due day, has not entered into an
arrangement for the repayment of the debt (under section 1234), then the person is
liable to pay, by way of penalty, an interest charge on the debt for each day in a
period.
New subsections 1229E(2) and (3) allow for the Minister to make a legislative
instrument to prescribe circumstances in which the interest charge would not apply if
a person has an unpaid amount on a relevant social security debt and, by the end of
the due day, has not entered into an arrangement for the repayment of the debt.
4
Schedule 1 - Interest charge
It is envisaged that the instrument would prescribe circumstances in which a person
would not have an interest charge applied to their debt if the amount that is being
withheld from their payments (under current section 1231 of the Act) is satisfactorily
repaying the debt. This instrument would also allow flexibility to exempt the
application of the interest charge in prescribed circumstances at a later point in time.
In the event that a person is no longer in the circumstances prescribed in the
legislative instrument, subsection 1229E(4) allows the Secretary to give a notice to
the person, specifying the information provided in paragraphs 1229E(4)(a)(i) to (iv).
It also provides that the outstanding amount of the debt is due and payable on the
28th day after the day on which the notice was issued.
New subsection 1229E(5) provides that, if a person has been given such a notice,
the person has an outstanding debt at the end of the due date, and has not entered
into an arrangement for the repayment of the debt, then the person is liable to pay,
by way of penalty, an interest charge on the debt for each day in a period.
New subsection 1229E(6) provides that the period for which the interest charge will
be applied to the debt starts at the beginning of the day after the due day. It further
provides that the period will end on the earliest of either the last day on which the
unpaid amount (and any interest charge on the unpaid amount) remains unpaid or
the day before the first day on which the person makes a payment under an
arrangement for repayment of the debt.
This subsection is intended to ensure that a person will be able to end the
application of the interest charge by entering into, and making a payment under,
an arrangement for repayment of the debt. This, in addition to entering into an
arrangement before the due date, will mean that the person can entirely avoid the
interest charge applying to their debt.
New subsection 1229E(7) provides that the interest charge on any unpaid amount is
worked out by multiplying the interest charge rate for that day by the sum of the
remaining unpaid amount and the interest charge from previous days. This provision
ensures that the interest is compounded on a daily basis. New section 1229H
prescribes the calculation of the `interest charge rate' for that day, and is explained
below.
New subsection 1229F - Failure to comply with or termination of repayment
arrangement
The purpose of section 1229F is to set out when an interest charge is payable by
persons who have failed to comply with a repayment arrangement or where a
repayment arrangement has been terminated.
New subsection 1229F(1) provides that, if a person has an unpaid amount on a
relevant social security debt, the person has entered into a repayment arrangement
under section 1234, and the person fails to make a payment under the arrangement,
then the person is liable to pay, by way of penalty, an interest charge for each day in
a period.
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Schedule 1 - Interest charge
New subsection 1229F(2) provides that the period for which the interest charge will
be applied to the debt starts at the beginning of the day after the due day. It further
provides that the period will end on the earlier of the last day on which the
outstanding amount (and any interest charge on any of the outstanding amount)
remains unpaid, the day before the first day on which the person has paid all the
payments that have so far become due and payable under the arrangement, or the
day before the day the arrangement is terminated.
This subsection is intended to ensure that a person may end the application of the
interest charge to their debt at the point where they catch up on any missed
payments under the arrangement, or enter into a new, more suitable repayment
arrangement. To avoid doubt, while the interest charge will apply to the debt during
the period, a person is only required to pay an amount equal to the missed payments
(rather than an amount equal to the missed payments and the interest charge)
to end the period of the application of the interest charge. The interest charge will
otherwise be payable as a debt due to the Commonwealth, as explained below.
New subsection 1229F(3) prescribes the calculation of an interest charge for a day.
The interest charge is calculated in the same way as in new subsection 1229E(7),
which is explained above.
Repayment arrangement is terminated
New subsection 1229F(4) provides that, if a person has an unpaid amount on a
relevant social security debt, the person has entered into an arrangement under
section 1234, and the arrangement is terminated, then the outstanding debt, and any
interest charge on the outstanding debt, is due and payable on the 14th day after the
termination. If, at the end of the 14th day, any amount remains unpaid, the person is
liable to pay, by way of penalty, an interest charge each day in a period.
New subsection 1229F(5) provides that the period for which the interest charge will
be applied to the debt starts at the beginning of the day after the 14th day. It further
provides that the period will end on the earliest of the last day on which the
outstanding amount (and any interest charge on the outstanding amount) remains
unpaid or the day before the first day after the 14th day on which the person makes a
payment on another arrangement for the repayment of the debt.
This subsection is intended to ensure that a person may end the application of the
interest charge at the point where they enter into another arrangement for repayment
of the debt.
New subsection 1229F(6) prescribes the calculation of an interest charge for a day.
The interest charge is calculated in the same way as in new subsection 1229E(7),
which is explained above.
New section 1229G - Other rules for interest charge
New subsection 1229G(1) provides that the interest charge under section 1229E
or 1229F for a day is due and payable to the Commonwealth at the end of that day.
6
Schedule 1 - Interest charge
New subsection 1229G(2) provides that an interest charge under section 1229E
or 1229F for a day is a debt due to the Commonwealth by the person.
New subsection 1229G(3) clarifies that subsection 1229(1) and
paragraph 1229D(1)(b) do not apply to a debt which is also an interest charge
(as provided for under new sections 1229E and 1229F). This means that, for the
interest charge, a notice in respect of a debt is not required to be issued under
subsection 1229(1) and it is not a debt to which new section 1229D would apply.
This avoids a situation where an interest charge is subject to further interest charges.
New section 1229H - What is the interest charge rate?
New section 1229H provides for the calculation of the interest charge rate.
New subsections 1229H(1) and 1229H(2) provide that the rate is based upon the
90-day Bank Accepted Bill rate, plus an additional seven per cent, as is currently
applied by the Australian Taxation Office for tax debts under the Taxation
Administration Act. This is an appropriate method for calculating the rate of the
interest charge to apply to income support debts because the rate is high enough to
encourage repayment without being punitive, it provides a return to the
Commonwealth (commensurate with the time value of the monies overpaid) and it
will help align tax and income support debt recovery policy.
New subsection 1229H(2) specifies what the base interest rate is, with reference to
the monthly average yield of 90-day Bank Accepted Bills. The rate is currently
published by the Reserve Bank of Australia in the `Interest Rates and Yields -
Money Market - Monthly' table on the Bank's website. This subsection also provides
a table identifying the appropriate monthly average to be used for each quarter.
Where the Reserve Bank of Australia has not published the specified rate by the
start of a quarter, new subsection 1229H(3) substitutes the last published monthly
average.
New subsection 1229H(4) provides for the rounding of the base interest rate to the
second decimal place.
Item 7 is to clarify that, if a person has entered into an arrangement for the payment
of a debt, it is a statutory requirement for the person to make a payment under an
arrangement before the end of the day that the arrangement requires such a
payment.
Amendments to the Student Assistance Act
Item 9 inserts into section 38 a definition of ABSTUDY debt, which means an
amount paid under the ABSTUDY Scheme (which is also known as the Aboriginal
and Torres Strait Islander Study Assistance Scheme) that should not have been
paid.
An ABSTUDY debt is a special educational assistance scheme overpayment (or a
debt under paragraph 38(a)), which, under section 39, is a debt owed by the person
to the Commonwealth.
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Schedule 1 - Interest charge
Item 10 amends paragraph (c) of the definition of debt in section 38 to ensure that
an interest charge, imposed under section 41CA or section 41CB, is an amount
payable to the Commonwealth and is therefore a debt.
In view of these amendments, item 8 makes a technical amendment to simplify the
heading to section 38.
Item 11 inserts new sections 41A to 41H.
New section 41A - Sections 40 and 41 do not apply to ABSTUDY debts
New section 41A provides that sections 40 and 41 do not apply in relation to a
person and an ABSTUDY debt owed by the person the Commonwealth. This will
have the effect that a person and an ABSTUDY debt will not be subject to the
existing provisions in the Student Assistance Act relating to late payment charges
and interest in relation to an overpayment of a benefit, but will instead be subject to
the interest charge provisions contained in new sections 41CA and 41CB.
New section 41B - Notice in respect of ABSTUDY debt
New section 41B provides for a notice in respect of an ABSTUDY debt. This section
mirrors the notice of debt provisions in the Social Security Act (that is,
subsections 1229(1) and (2), as amended by this Schedule), and ensures consistent
treatment of debts relating to ABSTUDY payments and relevant social security
debts.
New subsection 41B(1) provides that, if an ABSTUDY debt has not been wholly paid,
the Secretary must provide a notice specifying the information contained in
paragraphs 41B(1)(a) to 41B(1)(h), which mirrors the notice of debt provisions in the
Social Security Act. The subsection also provides that the outstanding amount of the
debt is due and payable on the 28th day after the date on the notice.
New section 41C - Interest charge payable on ABSTUDY debts
New section 41C provides that the interest charges only apply if the debt is an
ABSTUDY debt that has not been wholly paid.
New section 41D - No repayment arrangement in effect
New section 41D mirrors the operation of new section 1229E of the Social Security
Act (as inserted by item 6 of this Schedule), but with respect to an ABSTUDY debt
that has not been wholly paid.
New section 41E - Failure to comply with or termination of repayment arrangement
New section 41E mirrors the operation of new section 1229F of the Social Security
Act (as inserted by item 6 of this Schedule), but with respect to an ABSTUDY debt
that has not been wholly paid.
8
Schedule 1 - Interest charge
New section 41F - When interest charge becomes due and payable
New section 41F mirrors the operation of new subsection 1229G(1) of the Social
Security Act (as inserted by item 6 of this Schedule), but with respect to an
ABSTUDY debt that has not been wholly paid.
New section 41G - What is the interest charge rate?
New section 41G mirrors the operation of new section 1229H of the Social Security
Act (as inserted by item 6 of this Schedule) to provide the calculation of the interest
charge rate.
New section 41H - Arrangement for payment of ABSTUDY debt
New section 41H provides that the Secretary may, on behalf of the Commonwealth,
enter into an arrangement with a person for payment of an ABSTUDY debt. This
section mirrors subsections 1234(1) to 1234(4) of the Social Security Act to ensure
consistent treatment of debts related to ABSTUDY payments and relevant social
security debts.
Item 12 amends paragraph 51(1)(b) to ensure that a certificate by the Secretary
(stating that, on a specified day, a notice, to a specified effect, in respect of an
ABSTUDY debt, was given to a specified person by the Secretary) is clear evidence
of the matters stated in the certificate.
Part 2 - Application and transitional provisions
Subitem 13(1) provides that section 1229D, as inserted by this Bill, only applies in
relation to a debt that arises on or after the commencement of item 13 and a
pre-existing debt that is outstanding immediately before the commencement of the
Bill. This will mean that the amendments contained in item 7 will not apply to debts
that are no longer outstanding immediately before the commencement of item 13.
Subitem 13(2) provides that paragraph 1229E(1)(b), as inserted by this Bill, applies
to a notice given on or after the commencement of item 13. This will mean that a
person is not liable to pay an interest charge under section 1229E if a notice was not
given to a person under subsection 1229(1) on or after the commencement of
item 13.
Subitem 13(3) provides that, if section 1229D, as inserted by this Bill, applies to a
debt that arose before the commencement of item 13 and if, before the
commencement of this item, the Secretary gave a person a notice under
subsection 1229(1) of the Social Security Act, the Secretary must give the person
another notice under section 1229(1) of that Act, as amended by this Bill. This
means that the person will be informed in the new notice of the effect of the
application of the interest charge, and that the Secretary can issue a second notice
under subsection 1229(1) of the Social Security Act.
9
Schedule 1 - Interest charge
Subitem 13(4) provides that paragraph 1229F(1)(c), as inserted by this Bill, only
applies in relation to a failure that occurs on or after the commencement of item 13,
regardless of whether the arrangement was entered into before, on or after that
commencement. This means that a person is not liable to pay an interest charge
under section 1229F if a failure occurs before the commencement of item 13. It also
means that an arrangement that was entered into prior to commencement of the Bill
will continue in effect after commencement.
Subitem 13(5) provides that paragraph 1229F(4)(c), as inserted by this Bill, only
applies to a termination that occurs on or after the commencement of item 13,
regardless of whether the arrangement was entered into before, on or after that
commencement. This means that a person is not liable to pay an interest charge
under section 1229F if a termination occurs before the commencement of item 13.
It also means that an arrangement that was entered into prior to commencement of
the Bill will continue in effect after commencement.
Subitem 13(6) clarifies that the amendment made in item 7 (about making a
payment before the end of a particular day under a repayment arrangement) applies
in relation to existing arrangements, as at the commencement date.
Item 14 provides that interest charges under sections 41A to 41H, as inserted by this
Bill, apply to an ABSTUDY debt that arises on or after the commencement of
item 14, and to one that arose before the commencement of item 14, to the extent
that the debt is outstanding immediately before that commencement.
10
Schedule 2 - Student start-up loans
Summary
This Schedule establishes, from 1 January 2015, a student start-up loan scheme.
Student start-up loans aim to assist students with the costs of study, including the
purchase of text books, computers and internet access. Student start-up loans will
be income-contingent, and there will be a limit of two loans a year of $1,025 each
(indexed from 2017). The loans will be repayable under similar arrangements to
Higher Education Loan Programme (HELP) debts. Students will only be required to
begin repaying their start-up loan after their HELP debt has been repaid.
The Schedule also repeals and closes the student start-up scholarship payment.
Background
This Schedule amends both the Social Security Act and the Student Assistance Act
to provide for the student start-up loan and ABSTUDY student start-up loan from
1 January 2015. These loans will be income-contingent, and will be repayable under
similar arrangements to HELP debts, as provided for under the Higher Education
Support Act 2003 (Higher Education Support Act).
The qualification provisions for the student start-up loan and ABSTUDY student
start-up loan are similar to the existing qualification provisions for the student start-up
scholarship payment currently contained in Division 1 of Part 2.11B of the Social
Security Act and proposed for repeal by this Bill.
To the extent possible, the provisions in Schedule 2 that amend the Social Security
Act mirror the amendments made to the Student Assistance Act for the purpose of
ensuring consistency between the administration of the student start-up loan and the
ABSTUDY student start-up loan. To ensure consistency with HELP, to the extent
possible, the provisions in Schedule 2 relating to the recovery of the student start-up
loans and ABSTUDY student start-up loans refer to relevant provisions in the Higher
Education Support Act, including for the purpose of aligning the rate of interest on
outstanding loans.
Schedule 2 also contains amendments to the Social Security Administration Act,
the Income Tax Assessment Act 1936, the Income Tax Assessment Act 1997,
the Taxation Administration Act, and the Taxation (Interest on Overpayment and
Early Payments) Act 1983, including for the purpose of ensuring consistent
administration between the student start-up loan and HELP.
11
Schedule 2 - Student start-up loans
Explanation of the changes
Amendment to the Bankruptcy Act 1966
Item 1 makes an amendment to section 82 of the Bankruptcy Act 1966 to ensure
that student start-up loan debts are not provable in bankruptcy. The amendments to
subsection 82(3AB) proposed by this item will apply to that subsection as in force
following amendments made by item 1 of Schedule 1 to the Trade Support Loans
(Consequential Amendments) Act 2014 (assuming the latter Act commences before
this Bill).
Amendments to the Income Tax Assessment Act 1936
Item 2 amends subsection 82A(2) of the Income Tax Assessment Act 1936 to
ensure that payments made in respect of, or in the reduction or discharge of,
any indebtedness under Chapter 2AA of the Social Security Act or under Part 2 of
the Student Assistance Act are not included within the definition of expenses of
self-education as contained in the Income Tax Assessment Act 1936.
Items 3 and 4 amend section 202 of the Income Tax Assessment Act 1936, which is
the first provision of the Part of that Act that establishes the system of tax file
numbers. Section 202 outlines the object of the system. In that context,
the amendments refer to facilitating the administration of Chapter 2AA of the Social
Security Act and Part 2 of the Student Assistance Act with regard to the provision of
student start-up loans and ABSTUDY student start-up loans and the recovery of
associated debts.
Item 5 amends paragraph 202F(1)(fb) of the Income Tax Assessment Act 1936 to
provide that a decision of the Commissioner to give a notice under
subsections 1061ZVJD(1) and 1061ZVJF(1) of the Social Security Act (as inserted
by this Schedule) and sections 11D(1) and 11F(1) of the Student Assistance Act
(as inserted by this Schedule) can be reviewed by the Administrative Appeals
Tribunal. This aligns the reviewability of such decisions with the reviewability of
similar decisions to give certain notices dealt with under section 202F. There are
also amendments to the Social Security Administration Act proposed by this Bill
(as discussed below) to exclude these decisions from internal review or review by
the Social Security Appeals Tribunal (to avoid the confusion of two alternative
avenues of merits review through the tribunals).
Amendments to the Income Tax Assessment Act 1997
Items 6 and 7 amend section 12-5 to include student start-up loans in the list of
provisions about tax deductions. These amendments, like other items in the list, are
merely signposts to indicate where to find substantive provisions that actually deal
with the relevant deductions.
12
Schedule 2 - Student start-up loans
Item 8 amends section 26-20 to ensure that any payment made in reduction or
discharge of any indebtedness under Chapter 2AA of the Social Security Act or
Part 2 of the Student Assistance Act is not a payment that can be deducted under
the Income Tax Assessment Act 1997. This amendment will ensure that there is a
consistent treatment between HELP and the student start-up loan under
section 26-20.
Items 9 and 10 insert definitions of accumulated ABSTUDY SSL debt and
accumulated SSL debt into the Income Tax Assessment Act 1997 (to refer to where
these terms are defined in the Student Assistance Act and the Social Security Act).
Amendments to the Social Security Act
Item 11 inserts new section 19AA, which provides a series of definitions for the
purpose of Chapter 2AA of the Social Security Act to deal with new concepts
introduced under the student start-up loan provisions.
Items 12 to 18 insert provisions into section 23, pointing to where to find definitions
for a number of terms, including accumulated SSL debt, approved scholarship
course, Commonwealth Education Costs Scholarship, enrolment test day,
qualification period and student start-up loan.
In item 14, Commonwealth Education Costs Scholarship, is defined broadly to
include any scholarship provided for the purpose of assisting with education costs
under the Commonwealth Scholarships Guidelines made under Part 2-4 of the
Higher Education Support Act, to provide some flexibility around possible future
scholarships that may be established under those Guidelines.
Item 17 is notable for ensuring that a student start-up loan will be a social security
payment for the purposes of the Act. Bringing student start-up loans within this
definition has a number of consequences, including ensuring that existing
section 1223 of the Social Security Act (debts arising from lack of qualification,
overpayment etc.) can apply to student start-up loans.
Item 19 repeals Division 1 of Part 2.11B, which deals with qualification for student
start-up scholarship payment. The effect of this repeal is that, from commencement
(and subject to the application provisions at the end of the Schedule, described
below), a person will no longer be able to qualify for a student start-up scholarship
payment.
Items 20 and 21 make minor amendments to ensure that the definition of an
approved scholarship course will apply to all references to that term in the Act,
rather than just within Part 2.11B. This amendment has no substantive effect other
than clarifying that the reference to this term in section 1067A (about a person being
independent) is to be interpreted according to the existing definition.
Item 22 inserts new Chapter 2AA - Student start-up loans.
13
Schedule 2 - Student start-up loans
Part 2AA.1 - Introduction
Section 1061ZVAA - Simplified outline of this Chapter
Section 1061ZVAA provides a descriptive overview of new Chapter 2AA and an
outline of what student start-up loans are all about.
Part 2AA.2 - Qualification for and amount of student start-up loan
Section 1061ZVAA - Simplified outline of this Part
Section 1061ZVAA provides a brief overview of the qualification criteria and
operation of the student start-up loan. Full-time students who are receiving youth
allowance or austudy payment may qualify for a student start-up loan if they meet
the qualification criteria in section 1061ZVBB. A person can qualify for up to two
loans per calendar year.
Section 1061ZVBB - Qualification for student start-up loan
Section 1061ZVBB provides the qualification requirement for a student start-up loan.
These qualification requirements are similar to the qualification requirements for the
student start-up scholarship payment that, up until these amendments, had been
contained in section 592F of the Social Security Act.
To qualify for a student start-up loan, each of the following must occur on the
person's qualification test day:
the person is qualified for youth allowance or austudy payment;
youth allowance or austudy payment is payable to the person (which means
they are receiving one of these payments rather than undergoing a period of
suspension or some other period where they are in receipt of not more than
an nil rate of payment);
the person is receiving an amount of payment of youth allowance or austudy
payment that is more than just the pharmaceutical allowance and rent
assistance components of these payments as worked out under the relevant
rate calculator;
the person is receiving youth allowance or austudy payment because the
person is enrolled in an approved scholarship course (as defined in
section 592M);
the Secretary is satisfied that the person has not received and is not likely to
receive the amount or value any scholarship provided to assist with education
costs under the Commonwealth Scholarships Guidelines made for the
purposes of Part 2-4 of the Higher Education Support Act in the period of six
months starting immediately after the relevant qualification test day; and
the person has provided their tax file number.
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Schedule 2 - Student start-up loans
Subsection 1061ZVBB(3) sets out when a person's qualification test day is for a
qualification period. The qualification test day is the earliest of the day the person's
claim is determined, the last day of the approved scholarship course and the last day
of the qualification period. This formulation attempts to ensure that loans are only
paid to people who are continuing their qualifying study or have studied for the
duration of their course or qualification period. Generally, a qualification test day will
be worked out under paragraph (a).
Example of a student's qualification test day
Odetta is so busy studying all year that she only claims a student start-up loan
towards the end of 2015 in respect of the qualification period spanning
1 July to 31 December 2015 for her approved scholarship course, a Bachelor
of Arts, in which she is a first year student. The Secretary determines her
claim after the qualification period. Odetta's qualification test day is taken to
be the last day of the qualification period in respect of which the claim was
made (rather than the day the Secretary determined Odetta's claim or the final
day of her course, which she will continue studying in 2016).
Section 1061ZVBC - Circumstances in which person is not qualified for student
start-up loan
Section 1061ZVBC provides the circumstances in which a person is not qualified for
a student start-up loan in spite of otherwise being qualified under section 1061ZVBB.
A person is not qualified for a student start-up loan for a qualification period if:
it has already been determined (immediately before the person's qualification
test day for the relevant period) that the person is qualified for a student
start-up loan or ABSTUDY student start-up loan for that qualification period
(this is to ensure a person cannot receive more than one loan in a six-month
period); or
in the period of six months ending immediately before the relevant
qualification test day, one of the following circumstances applies:
o the person has received a payment known as a student start-up
scholarship payment under the Veterans' Children Education Scheme;
o the person has received a payment known as a student start-up
scholarship payment under the Military Rehabilitation and
Compensation Act Education and Training Scheme;
o the person has received the amount or value of any scholarship
provided to assist with education costs under the Commonwealth
Scholarships Guidelines made for the purposes of Part 2-4 of the
Higher Education Support Act;
o the person was entitled to the amount or value of any scholarship
provided to assist with education costs under the Commonwealth
Scholarships Guidelines made for the purposes of Part 2-4 of the
Higher Education Support Act but has not received the full entitlement
only because the scholarship was suspended.
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Schedule 2 - Student start-up loans
Section 1061ZVBD - Amount of student start-up loan
Section 1061ZVBD provides that the amount of the student start-up loan payment is
$1,025. The amount of the student start- up loan payment will be indexed on
1 January 2017 and each later 1 January in line with the Consumer Price Index.
Part 2AA.3 - Indebtedness
Division 1 - Introduction
Section 1061ZVCA - Simplified outline of this Part
Section 1061ZVCA provides an outline of how student start-up loan debts are
incurred in Part 2AA.3, which is about the circumstances and rules relating to a
person's indebtedness with regard to a student start-up loan.
Division 2 - Incurring SSL debts
Section 1061ZVDA - SSL debts
Section 1061ZVDA establishes the student start-up loan as an income-contingent
loan that is recovered and administered in a similar way to a HELP loan.
The student start-up loan is only treated as an income-contingent loan if the person
remains in their course for 35 days after being qualified for the loan or after the
commencement of their course. If this does not occur, section 1223ABF (as also
inserted by Schedule 2 to this Bill) will provide that the student start-up loan is a debt
due to the Commonwealth and, under current section 1229, is due and payable
28 days after the person receives a debt notice.
Subsection 1061ZVDA(1) provides a person incurs a debt to the Commonwealth if
the person has received a student start-up loan for a qualification period. Note that
the amount of the loan is not a debt in respect of a student start-up loan under
section 1223ABF, or as a result of the person obtaining benefit where they were not
entitled for any reason to obtain that benefit (due to subsection (4)).
Subsection 1061ZVDA(2) provides that the SSL debt is incurred by the person either
on the day the person received the loan or the day after the person's enrolment test
day for the qualification period, whichever day is later. The term enrolment test day
is defined by subsection 1223ABF(2), as indicated by a note at the end of this
provision.
Subsection 1061ZVDA(3) clarifies that the amount of the SSL debt is the amount of
the loan reduced by any amount repaid before the day on which the debt is incurred.
This will mean that, if a student initially enrols in a course or part of a course,
receives a payment and withdraws from the course, then they will be able to reduce
their debt if they make an early repayment.
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Schedule 2 - Student start-up loans
Subsection 1061ZVDA(4) provides that an SSL debt is not incurred if the loan has
been fully repaid before the day on which the loan would have otherwise been
incurred or if the Secretary has formed an opinion, under subsection 1223ABF(3)
in relation to the loan, that the person ceased studying due to exceptional
circumstances beyond the person's control.
In this case, if a person ceases to be enrolled in an approved scholarship course or
is no longer enrolled full-time before the enrolment test day, neither a social security
debt nor an SSL debt will be incurred. This provision will ensure that there is
flexibility and fairness in respect to incurring a student start-up loan. SSL debts are
also not incurred where the amount of the loan is a debt because of the terms of
section 1223ABF (generally, where the person does not continue to study)
or section 1223 (generally, where a person obtains the benefit of the loan and is not
entitled).
Section 1061ZVDB - SSL debt discharged by death
Section 1061ZVDB ensures that an SSL debt is wholly discharged at death and that
outstanding obligations to repay an SSL debt do not need to be met through a
deceased person's estate.
Section 1061ZVDC - Notice to Commissioner
Section 1061ZVDC ensures that, if a person incurs an SSL debt, the Secretary must
give the Commissioner of Taxation a notice specifying the amount of the debt
incurred. Subsection 1061ZVDC(2) ensures that the Secretary has power to include
other details requested by the Commissioner to ensure proper administration of the
debt. Passing this information to the Commissioner will allow for the Australian
Taxation Office to administer SSL debt repayments.
Division 3 - Working out accumulated SSL debts
This Division provides for the calculation of a SSL debt and largely mirrors the
calculation of HELP debts under Division 140 of the Higher Education Support Act.
Section 1061ZVEA - Simplified outline of this Division
Section 1061ZVEA is an information provision, which provides an outline as to how
accumulated SSL debts are worked out for any given financial year. As explained in
the provision, there are two stages to working out a person's accumulated SSL debt.
Section 1061ZVEB - Stage 1 - working out a former accumulated SSL debt.
Subsection 1061ZVEB(1) provides that a person's former accumulated SSL debt
(in relation to the person's accumulated SSL debt for a financial year) is worked out
by multiplying the amount worked out using a six-step method statement (set out in
the table in the subsection) by the HELP debt indexation factor for 1 June in that
financial year. The six steps generally work by adding outstanding SSL debts and
subtracting repayments (and factoring in any amendments to assessments).
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Schedule 2 - Student start-up loans
Note that the term HELP debt indexation factor is defined in section 19AA as
having the same meaning as in the Higher Education Support Act.
Subsection 1061ZVEB(2) provides that, for the purposes of section 1061ZVEB,
an assessment (or an amendment of an assessment) is taken to have been made on
the day specified in the notice of assessment (or notice of amended assessment)
as the date of issue of that notice.
Section 1061ZVEC - Stage 2 - working out an accumulated SSL debt
Subsection 1061ZVEC(1) provides a formula, which sets out that a person's
accumulated SSL debt, for a financial year, is equal to the person's former
accumulated SSL debt plus the SSL debts incurred minus the person's SSL
repayments, where:
a former accumulated SSL debt is the person's former accumulated SSL
debt in relation to that accumulated SSL debt;
SSL debt repayments are the sum of all voluntary SSL repayments paid on
or after 1 July in the financial year and before 1 June in that year, in reduction
of the SSL debts incurred in that year; and
SSL debts incurred are the sum of all SSL debts (if any) that the person has
incurred during the first six months of the financial year.
Subsection 1061ZVEC(2) provides that the person incurs the accumulated SSL debt
on 1 June in the relevant financial year.
Subsection 1061ZVEC(3) provides that the first financial year for which a person can
have an accumulated SSL debt is the financial year starting on 1 July 2015. This is
because the SSL provisions contained within the Bill commence on 1 January 2015
and, due to subsection 1061ZVEC(2), an SSL debt can only be incurred on 1 June in
a financial year.
Section 1061ZVED - Rounding of amounts
Subsection 1061ZVED(1) provides that, if (apart from this section) a person's
accumulated SSL debt is $1 or above, then that debt will be rounded down to the
nearest whole dollar.
Subsection 1061ZVED(2) provides that, if (apart from this section) a person's
accumulated SSL debt is below $1, then that debt is rounded down to zero.
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Schedule 2 - Student start-up loans
Section 1061ZVEE - Accumulated SSL debt discharges earlier debts
Subsection 1061ZVEE(1) provides that the accumulated SSL debt a person incurs
on 1 June in a financial year discharges (or discharges the unpaid part of) any SSL
debt that the person incurred during the calendar year immediately preceding that
day and any accumulated SSL debt that the person incurred on the preceding
1 June. This is because an accumulated SSL debt incurred on 1 June in a financial
year is calculated to include any new SSL debt incurred during the calendar year as
well as any outstanding accumulated SSL debt that was incurred immediately
preceding 1 June. As such, this rule essentially carries over old debts, subject to the
calculation of an accumulated SSL debt.
Subsection 1061ZVEE(2) clarifies that subsection 1061ZVEE(1) does not affect the
calculation of accumulated SSL debts.
Section 1061ZVEF - Accumulated SSL debt discharged by death
Subsection 1061ZVEF(1) provides that, when a person who has an accumulated
SSL debt dies, the accumulated SSL debt is taken to have been discharged.
Subsection 1061ZVEF(2) clarifies, to avoid any doubt that may be created by this
provision, that subsection 1061ZVEF(1) does not affect any compulsory SSL
repayment amounts required to be paid in respect of the accumulated SSL debt,
whether or not those amounts were assessed before the person's death.
Part 2AA.4 - Discharge of indebtedness
Division 1 - Introduction
Division 1 of Part 2AA.4 provides for the voluntary and compulsory discharge of SSL
repayments. These provisions largely mirror the discharge of indebtedness
provisions of Divisions 148 to 154 of the Higher Education Support Act.
Section 1061ZVFA - Simplified outline of this Part
Subsection 1061ZVFA provides an outline of Part 2AA.4, relating to discharging SSL
debts.
Section 1061ZVFB - Debts under this Chapter
Section 1061ZVFB(1) provides that debts dealt with under this Chapter are SSL
debts and accumulated SSL debts. Debts that arise under sections 1223 (Debts
arising from a lack of qualification, overpayment etc.) and 1223ABF (debts for failure
to continue studying) are not debts under Chapter 2AA of the Act (they are dealt with
separately under Chapter 5).
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Schedule 2 - Student start-up loans
Division 2 - Voluntary discharge of indebtedness
Section 1061ZVGA - Voluntary SSL repayments in respect of debts
Section 1061ZVGA allows a person to make a voluntary payment, at any time,
in respect of a debt that the person owes to the Commonwealth under Chapter 2AA.
This payment must be made to the Commissioner for Taxation (through the
Australian Taxation Office).
Section 1061ZVGB - Application of voluntary SSL repayments
Subsection 1061ZVGB(1) provides that a person who makes voluntary payments to
the Commonwealth in respect of debts under Chapter 2AA may give a direction as to
which debt they are paying off.
Subsection 1061ZVGB(2) provides that, if the person has not given an adequate
direction, money paid will firstly discharge or reduce any accumulated SSL debt of
the person and secondly be applied to the discharge or reduction of any SSL debts
of the person.
Section 1061ZVGC - Refunding of payments
Section 1061ZVGC ensures that a person cannot pay more money than they owe to
the Commonwealth by providing that, if a person pays an amount to the
Commonwealth under Division 2 of Part 2AA.3 and the amount is greater than the
amount required to discharge all debt under Chapter 2AA and the total amount of the
person's primary tax debts (within the meaning of Part IIB of the Taxation
Administration Act), then the Commonwealth must refund to the person an amount
equal to that excess.
Division 3 - Compulsory discharge of indebtedness
Section 1061ZVHA - Liability to repay amounts
Subsection 1061ZVHA(1) provides that, if:
a person's HELP repayment income for an income year is greater than their
minimum repayment HELP income for that income year; and
the person had an accumulated SSL debt on the 1 June immediately
preceding an assessment of the person's income of that year;
then the person is liable to pay to the Commonwealth so much of the person's
repayable SSL debt for the income year that does not exceed the amount worked
out by subtracting the person's HELP liability from the applicable percentage of
repayment income. For this purpose, applicable percentage of HELP repayment
income is defined to mean the amount that is the percentage of the person's
repayment income applicable under the table in section 154-20 of the Higher
Education Support Act and HELP liability means any amount the person is liable to
pay under section 154-1 if that Act for the income year in respect of an accumulated
HELP debt.
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Schedule 2 - Student start-up loans
The effect of this provision is that the repayment of any existing HELP debt is paid
back before an SSL debt. It also ensures that, in a year where an amount payable is
more than the amount remaining of the accumulated HELP debt, the remainder of
the amount payable to the Commonwealth is paid to reduce a person's SSL debt.
To clarify this effect, subsection 1061ZVHA(2) ensures that a person is not liable
under this section to pay an amount for an income year if the amount worked out
through the formula in subsection (1) is zero or less than zero.
Subsection 1061ZVHA(3) provides that a person is not liable to pay an amount
under this section for an income year if no Medicare levy is payable by the person on
their taxable income for that year or if the amount of the Medicare levy required to be
paid by the person on their taxable for the income year is reduced under law.
Section 1061ZVHB - Repayable SSL debt for an income year
Subsection 1061ZVHB(1) provides that a person's repayable SSL debt for an
income year is their accumulated SSL debt immediately preceding 1 June in that
income year or the amount (if any) remaining after deducting the total amount paid or
assessed to be payable.
Subsection 1061ZVHB(2) clarifies that, in the calculation of a person's repayable
debt, if the amount assessed to be payable has been increased, or reduced by an
amendment of the relevant assessment, then the amended amount is the amount
payable.
Section 1061ZVHC - Commissioner may make assessments
Section 1061ZVHC allows the Commissioner to make an assessment of the
person's accumulated SSL debt on the 1 June immediately before making the
assessment. The Commissioner may also make an assessment of the amount that
is required to be paid in respect of that debt. In making this assessment,
the Commissioner may use any information in his or her possession.
Section 1061ZVHD - Notification of notices of assessment of tax
Section 1061ZVHD allows the Commissioner to provide an additional notice of an
assessment of a SSL debt if the Commissioner did not provide this with an
assessment that she/he has served with respect to a person's income under
section 174 of the Income Tax Assessment Act 1936. This additional notice of
assessment must also contain the amounts that have been provided in the notice
under section 174 of that Act.
Section 1061ZVHE - Commissioner may defer making assessments
Subsection 1061ZVHE(1) provides that a person may apply in an approved form to
the Commissioner for deferral of the making of an assessment in respect of the
person under section 1061ZVHC.
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Schedule 2 - Student start-up loans
Subsection 1061ZVHE(2) provides that the application must specify the income year
for which the deferral is being sought and the reasons for seeking the deferral.
Subsection 1061ZVHE(3) provides that the income year specified in the application
must be the income year in which the person makes the application, the immediately
preceding income year or the immediately succeeding income year.
Subsection 1061ZVHE(4) provides that, on application by a person under
section 1061ZVHE(1), the Commissioner may defer making an assessment in
respect of the person under section 1061ZVHC if the Commissioner is of the opinion
that if the assessment were made, payment of the assessed amount would either
cause serious hardship to the person, or there are other special reasons that make it
fair and reasonable to defer making the assessment.
Subsection 1061ZVHE(5) provides that the Commissioner may defer making the
assessment for any period that he or she thinks appropriate.
Subsection 1061ZVHE(6) provides that as soon as practicable after an application is
made under section 1061ZVHE(1), the Commissioner must consider the matter to
which the application relates and notify the applicant of the Commissioner's decision
on the application.
Section 1061ZVHF - Commissioner may amend assessments
Subsection 1061ZVHF(1) provides that a person may apply in an approved form to
the Commissioner for an amendment of an assessment made in respect of the
person under section 1061ZVHC so that the amount payable under the assessment
is reduced or no amount is payable under the assessment.
Subsection 1061ZVHF(2) provides that the application must be made no later than
two years after the day the Commissioner gives notice to which the assessment
relates or must specify the reasons justifying a later application.
Subsection 1061ZVHF(3) provides that, on application by a person under
section 1061ZVHF(1), the Commissioner may amend an assessment made in
respect of the person under section 1061ZVHC so that the amount payable under
the assessment is reduced or no amount is payable under the assessment if the
Commissioner is of the opinion that payment of the assessed amount has caused
(or would cause) serious hardship to the person or there are other special reasons
that make it fair and reasonable to make the amendment.
Subsection 1061ZVHF(4) provides that, as soon as practicable after an application is
made under section 1061ZVHF, the Commissioner must consider the matter to
which the application relates and notify the applicant of the Commissioner's decision
on the application.
22
Schedule 2 - Student start-up loans
Part 2AA.5 - Tax administration matters
Section 1061ZVJA Simplified outline of this Part
Section 1061ZVJA outlines the purpose of Part 2AA.5 - Tax administration matters.
Section 1061ZVJB - Verification of tax file numbers
Section 1061ZVJB(1) provides power for the Secretary, when determining a claim for
a student start-up loan for a person receiving youth allowance or austudy payment,
to verify the person's tax file number with the Commissioner.
Section 1061ZVJB(2) allows the Commissioner, if they are satisfied with the person's
tax file number, to notify the Secretary, through a written notice, accordingly.
Note that, under existing section 75 of the Social Security Administration Act,
the Secretary has the power to request tax file numbers.
Section 1061ZVJC - When person with tax file number incorrectly notifies number
Section 1061ZVJC provides that, if the Commissioner is satisfied that the tax file
number that was given to the Secretary for the purposes of qualification for a student
start-up loan has been at any time cancelled or withdrawn, or is otherwise wrong,
and the person does have a tax file number, then the Commissioner may give a
notice of this to the Secretary. The Commissioner may also provide the Secretary
with the person's tax file number. For the purposes of qualification, the new tax file
number is the one that is taken to have been given to the Secretary.
This provision ensures that a person will not be disqualified from the student start-up
loan because of providing an incorrect tax file number.
Section 1061ZVJD - When person without tax file number incorrectly notifies
number
Subsection 1061ZVJD(1) provides that, if the Commissioner is satisfied that the tax
file number that was given to the Secretary in order to become qualified for a student
start-up loan has been cancelled or for any other reason is not the person's tax file
number and the Commissioner is not satisfied that the person has such a number,
then the Commissioner may give to the Secretary a written notice informing the
Secretary accordingly. The decision to give the notice is reviewable under
section 202F of the Income Tax Assessment Act 1936.
The Commissioner must also give a copy of any notice to the person concerned,
containing a statement of reasons for the decision to give the notice.
Note that section 75 of the Social Security Administration Act allows the Secretary to
request a tax file number from a person who is receiving a social security payment.
23
Schedule 2 - Student start-up loans
Section 1061ZVJE - When tax file numbers are altered
Section 1061ZVJE ensures that, when a new tax file number is issued in place of
one that has been withdrawn, the Commissioner may inform the Secretary, and the
new number is taken to be notified by the person to whom the tax file number
relates.
Section 1061ZVJF - When tax file numbers are cancelled
Section 1061ZVJF provides that, if the Commissioner cancels a tax file number that
a person has given to the Secretary for the purposes of qualification for a student
start-up loan, then the Commissioner may give to the Secretary a written notice of
the cancellation. The decision to give the notice is reviewable under section 202F of
the Income Tax Assessment Act 1936.
The Commissioner must also give a copy of any notice to the person concerned
containing a statement of reasons for the decision to give the notice.
Note that section 75 of the Social Security Administration Act allows the Secretary to
request a tax file number from a person who is receiving a social security payment.
Section 1061ZVJG - Returns, assessments, collection and recovery
Section 1061ZVJG provides that, subject to Parts 2AA.4 and 2AA.5 of the Social
Security Act (as inserted by Schedule 2 to this Bill), Part IV of the Income Tax
Assessment Act 1936, Division 5 of the Income Tax Assessment Act 1997 and
Part 4-15 in Schedule 1 to the Taxation Administration Act apply (so far as they are
capable of application) in relation to a compulsory SSL repayment amount of a
person as if it were income tax assessed to be payable by a taxpayer by an
assessment made under Part IV of the Income Tax Assessment Act 1936.
Section 1061ZVJH - Charges and civil penalties for failing to meet obligations
Section 1061ZVJH provides that Part 4-25 in Schedule 1 to the Taxation
Administration Act has effect as if any compulsory SSL repayment amount of a
person were income tax payable by the person in respect of the income year in
respect of which the assessment of that debt was made, and Part 2AA.1 so far as it
relates to persons providing tax file numbers, and Part 2AA.3, 2AA.4 and Part 2AA.5
were income tax laws.
This does not have the effect of making a person liable to a penalty for any act or
omission that happened before the commencement of this section.
Section 1061ZVJJ - Pay as you go (PAYG) withholding
Section 1061ZVJJ provides that Part 2-5 (other than section 12-55 and
Subdivisions 12-E, 12-F and 12-G) in Schedule 1 to the Taxation Administration Act
applies (so far as it is capable of application) in relation to the collection of amounts
of a person's compulsory SSL repayment amount of a person as if the compulsory
SSL repayment amount were income tax.
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Schedule 2 - Student start-up loans
Section 1061ZVJK - Pay as you go (PAYG) instalments
Section 1061ZVJK provides that Division 45 in Schedule 1 to the Taxation
Administration Act applies (so far as it is capable of application) in relation to the
collection of a person's compulsory SSL repayment amount as if the compulsory
repayment amount were income tax.
Section 1061ZVJL - Administration of this Chapter
Section 1061ZVJL provides that the Commissioner of Taxation has general
administration of certain provisions in the social security law relevant to the
repayment of student start-up loans. The purpose of this provision is to allow the
Commissioner of Taxation to administer the recovery of SSL debts (noting that the
Secretary retains some powers, such as being responsible for forming an opinion as
to whether a person ceased to be enrolled in an approved scholarship course
because of exceptional circumstances beyond the person's control).
Items 23 and 25 repeal items in the tables at sections 1190 and 1191 (about
indexed amounts) that deal with student start-up scholarship payments (which are
proposed for repeal by this Bill).
Items 24 and 26 insert items 69A and 41A into the tables contained in section 1190
and subsection 1191(1) respectively to provide for the indexation of the student
start-up loan amount (to be paid to a person). This is not to be confused with the
indexation of a person's accumulated SSL debt.
Item 27 replaces subsection 1192(8A) to provide that the student start-up loan
amount is not indexed on 1 January 2015 or 1 January 2016. This will ensure that
the amount of the student start-up loan will remain equal in value to that of the
student start-up scholarship payment, but for its repeal.
Item 28 is an amendment consequential on the repeal of the student start-up
scholarship payment.
Item 29 inserts a new item in the table in subsection 1222(2) to list the recovery
methods available for debts in respect of student start-up loans under
section 1223ABF.
Item 30 makes a consequential amendment to the heading at section 1223ABE
(which now just refers to Debts in respect of relocation scholarship payments).
Item 31 removes references in section 1223ABE to student start-up scholarship
payments.
Item 32 inserts new section 1223ABF - Debts in respect of student start-up loans.
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Schedule 2 - Student start-up loans
Subsection 1223ABF(1) raises a debt for a person who is paid a student start-up
loan for a qualification period and ceases to continue to engage in qualifying study
for youth allowance or austudy payment (as applicable) between the time of the
person's qualification test day and enrolment test day, so long as the person's
qualification test day was the day the Secretary determined the person's claim for
the loan (if the person's qualification test day is another day, no longer engaging in
qualifying study will not be relevant).
Subsection 1223ABF(2) defines a person's enrolment test day for a qualification
period, which is the earliest of the following days:
the last day of the approved scholarship course, if the approved scholarship
course ends during that qualification period;
the last day of the relevant qualification period;
the 35th day of the period starting on either the first day of the approved
scholarship course (if the person's qualification time was before the first day
of the relevant approved scholarship course, for example where a person is
beginning their course) or the day on which the person qualifies for the loan.
The purpose of these rules is to ensure that the loans are targeted to people who
have a genuine commitment to continuing their study.
Subsection 1223ABF(3) states that a debt will not arise under this section if the
Secretary determines that a person is no longer enrolled in qualifying study because
of exceptional circumstances beyond the person's control.
Item 33 inserts subparagraph 1229D(1)(b)(iiia) to provide that a student start-up
loan, as contemplated under section 1223ABF, is a debt to which an interest charge
may be applied under section 1229E or 1229F of the Social Security Act (as inserted
by Schedule 1 to the Bill).
Items 34 and 35 make amendments to ensure that deductions (to pay off other
social security debts) are not able to be made from a student start-up loan. This is to
ensure that student start-up loans are targeted towards meeting education costs.
Amendments to the Social Security Administration Act
Item 36 amends subsection 10(1) to exclude Division 2A from the matters that can
be agreed upon between the Secretary and the Principal Member of the Social
Security Appeals Tribunal. This is because decisions under Division 2A are made by
the Commissioner of Taxation rather than the Secretary.
Items 37 and 38 make amendments consequential on the repeal of the student
start-up scholarship payment.
Item 39 inserts section 26C, which provides a time limit for claiming the student
start-up loan.
26
Schedule 2 - Student start-up loans
Subsection 26C(1) provides that a person's claim for a student start-up loan for a
qualification period must be made before the end of the qualification period.
Section 26C(2) provides that a person's claim for a student start-up loan for a
qualification period must be made at least 35 days before the course end date if the
student is expected to complete the approved scholarship during that qualification
period.
Item 40 inserts subsections 36(4) and (5), which provide obligations on the
Secretary in determining claims and intend to give the Secretary flexibility in when to
determine claims.
Subsection 36(4) states that, if a person claims a student start-up loan for a
qualification period, the Secretary may determine the person's claim at a time the
Secretary considers appropriate. For claims made before the start of the period of
study, the Secretary should have regard to the principle that the time should be close
to the start of the period of study concerned for the relevant approved scholarship
course.
Subsection 36(5) provides that nothing in subsection 36(4) affects the operation of
section 39, which provides that, if the Secretary does not make a determination
regarding a claim within the period of 13 weeks after the day on which the claim was
made, the Secretary is taken to have made a determination rejecting the claim.
Item 41 is a minor amendment for the purposes of item 42.
Item 42 inserts subsection 39(9) to provide an exception to the requirement in
subsection 39(1). Subsection 39(1) deems that a claim that has not been decided
upon by the Secretary within a 13-week period of making the claim is refused.
Subsection 39(9) ensures that the 13-week period will start on the day when the
person does become qualified (that is, on the first day of the qualification period) -
thus, allowing a person to make valid claims for student start-up loans (for upcoming
qualification periods) in advance of actually being qualified. This will enable the
Secretary to determine claims once the relevant qualification periods actually
commence.
Items 43, 44 and 45 are amendments consequential upon the repeal of the student
start-up scholarship payment.
Item 46 inserts section 47DB, which provides for the time when the payment of the
amount of a student start-up loan must be made. There is also a rule to deal with
how student start-up loans are to be paid where a person's youth allowance is paid
to their parent. In this case, the Secretary can pay the student start-up loan to the
parent (or another person in the exercise of discretion).
Item 47 makes a mechanical amendment to ensure that a student start-up loan can
be paid into a bank account, and is otherwise subject to the payment rules in existing
section 55.
27
Schedule 2 - Student start-up loans
Item 48 amends the heading to section 58.
Item 49 amends section 58 to include reference to the student start-up loan to
ensure it is exempted from the rule that allows a social security payment to be paid
to another person after the death of the person who was otherwise entitled to the
payment. This exemption is not needed because a person's death discharges SSL
debt liabilities.
Item 50 is an amendment to ensure that student start-up loans are subject to the
nominee provisions in the Social Security Administration Act (to align them with the
former treatment of student start-up scholarship payments).
Items 51 and 52 make a number of minor consequential amendments related to the
repeal of the student start-up scholarship payment.
Item 53 inserts subsection 127(4) to provide that the Secretary must not review a
decision that is a reviewable decision under section 138A. As discussed with
respect to section 138A below, the purpose of this amendment is to ensure that
reviewable decisions under the student start-up loan provisions are reviewed in the
same way that the equivalent decisions in the Higher Education Support Act, relating
to HELP, are reviewed. For the recovery of HELP debts, the decision-maker for
reviewable decisions is the Commissioner. This amendment appropriately ensures
that the Commissioner, who administers the recovery of HELP, is the relevant
decision-maker.
For the same reason, item 42 will ensure the Secretary will not be able to review
other decisions relating to the student start-up loan that are reviewable by the
Commissioner or decisions inserted by this Bill which are reviewable in accordance
with section 202F of the Income Tax Assessment Act 1936.
Item 54 inserts paragraphs 129(4)(da), (db) and (dc) to provide that a person may
not apply to the Secretary in relation to a decision that is reviewable under
section 138A or certain other decisions that are reviewable by the Commissioner or
reviewable under taxation legislation.
Item 55 inserts into Part 4 new Division 2A, containing sections 138A to 138J.
These provisions are intended to ensure that the system of review for the student
start-up loan is consistent with the system of review for HELP under the Higher
Education Support Act.
Division 2A - Internal review of Commissioner decisions relating to student start-up
loans
Section 138A - Decisions reviewable under this Division
Section 138A provides that the decisions by the Commissioner to defer making an
assessment or to amend an assessment are reviewable decisions.
28
Schedule 2 - Student start-up loans
Section 138B - Commissioner must give reasons for reviewable decisions
Section 138B provides that, if the Commissioner is required to notify a person of the
making of a reviewable decision, then the notice must include the reasons for the
decision. This will mean that, if the Commissioner makes a reviewable decision
under 138A, then he or she will have to include the reasons for the decision. This
section will not affect any other legal obligation to give reasons for a decision.
Section 138C - Reviewer of decisions
Subsection 138C(1) provides that the Commissioner is the reviewer of reviewable
decisions under Division 2A unless subsection 138C(2) applies.
Subsection 138C(2) provides that, where a delegate of the Commissioner makes a
reviewable decision, any delegate of the Commissioner who reconsiders the
decision must not have been involved in the making of the decision and must be
more senior to the decision-maker.
Section 138D - Reviewer may reconsider reviewable decisions
Section 138D provides a mechanism by which a reviewer can reconsider a
reviewable decision. Unlike section 138F, a reviewer can review a decision under
this section whether or not a person requests such reconsideration.
Subsections 138D(1) and (2) provide that the reviewer of a reviewable decision may
reconsider the decision if they are satisfied that there is a sufficient reason to do so.
The reviewer will be able to do so even if the application for reconsideration was
made on request or the decision had been confirmed, varied or set aside and an
application had otherwise been made to the Administrative Appeals Tribunal.
Subsection 138D(3) provides that, after reconsidering the decision, the reviewer
must either confirm, vary or set aside the decision. If the decision is set aside a new
decision must be substituted.
Subsection 138D(4) provides that a decision of the reviewer to confirm, vary or set
aside the original decision takes effect either on the day that is specified in the
decision on review or, if it is not specified, the day on which the decision on review
was made.
Subsection 138D(5) provides that the reviewer must give written notice of the
decision on review to the person to whom the decision relates.
Subsection 138D(6) provides that the notice must be given within a reasonable
period of time after the decision has been made and must contain a statement of the
reason for the reviewer's decision on review. In addition to this requirement,
section 27A of the Administrative Appeals Tribunal Act 1975 will also require the
person to be notified of the person's review rights (as mentioned in a note).
29
Schedule 2 - Student start-up loans
Section 138E - Notice to AAT Registrar
Section 138E ensures that, if a person has applied to the Administrative Appeals
Tribunal for review of a decision under subsection 138D(3), the reviewer is under an
obligation to give notice of the decision to the Tribunal.
Section 138F - Reconsideration of reviewable decisions on request
Section 138F provides a mechanism by which a person can require a reviewer to
confirm, vary or set aside a decision that is to be reconsidered.
Subsection 138F(1) provides a right of a person whose interests are affected by a
reviewable decision to request the reviewer to reconsider the decision.
Subsection 138F(2) provides that such a request must be in a written notice given to
the reviewer within 28 days (or longer, if the reviewer allows it) from when the person
first received the notice of decision.
Subsection 138F(3) provides that the notice must set out the reasons for making the
request.
Subsections 138F(4) to 138F(7) operate in the same way as subsections 138D(3)
to 138D(6) but with respect to a decision reconsidered on request. In addition to
these rules, section 27A of the Administrative Appeals Tribunal Act 1975 will require
the person to be notified of the person's review rights.
Subsection 138F(8) provides that, if a reviewer does not give a notice of a decision
to the person within 45 days after receiving the person's request, then the original
decision is taken to be confirmed. This will allow an application to be made to the
Administrative Appeals Tribunal under section 138H.
Section 138G - Withdrawal of request
Section 138G ensures that a person is able to withdraw a request to a reviewer to
reconsider a reviewable decision.
Section 138H - AAT review of the reviewable decisions
Section 138H provides that, if a reviewable decision has been confirmed, varied or
set aside by a reviewer who has reconsidered the decision, then a person may apply
to the AAT for review of the decision.
Section 138J - Decision changed before AAT review completed
Section 138J puts beyond doubt that, if a decision is varied or set aside by a
reviewer and an application has been made to the AAT for review of the decision,
the decision on review is taken to be the decision as varied or set aside by the
reviewer.
30
Schedule 2 - Student start-up loans
Item 56 amends section 144 to provide that the reviewable decisions as dealt with
by item 55 above cannot be reviewed by the Social Security Appeals Tribunal.
New decisions inserted by this Bill subject to review under section 202F of the
Income Tax Assessment Act 1936 are also not reviewable by the Social Security
Appeals Tribunal. This is because the reviewable decisions at issue are reviewable
decisions made by the Commissioner (including those relating to the deferral and
amendments of assessment of SSL debts). To ensure that the student start-up loan
is administered in a way that is consistent with the administration of HELP under the
Higher Education Support Act, such reviewable decisions are subject to the
Commissioner's internal review process and subject to review in the Administrative
Appeals Tribunal. This exclusion from Social Security Appeals Tribunal review
essentially ensures that there are not two avenues available for merits review
appeals.
Item 57 adds student start-up loans to the list of social security payments in
section 238 from which deductions cannot be made for the purposes of making
payments to the Commissioner of Taxation or the Child Support Registrar. This
helps ensure that student start-up loans are put towards student expenses.
Amendments to the Student Assistance Act
Items 58 to 78 amend subsection 3(1) to include definitions of terms relating to the
ABSTUDY student start-up loan.
Item 79 inserts new Part 2 about ABSTUDY student start-up loans.
Part 2 - ABSTUDY student start-up loans
Division 1 Introduction
Section 6A - Simplified outline of this Part
The new Part is prefaced with a simplified outline.
Division 2 - Qualification for and amount of ABSTUDY student start-up loan
Section 7A - Simplified outline of this Division
Section 7A gives a simplified outline of the Division that relates to qualification for
and amount of the ABSTUDY student start-up loan.
Section 7B - ABSTUDY Scheme
Section 7B provides clarity that ABSTUDY student start-up loans are made under
the ABSTUDY Scheme (which is otherwise mainly set out in a policy manual).
Section 7C - Qualification for ABSTUDY student start-up loan
Section 7C operates in a similar way to section 1061ZVBB of the Social Security Act
(as inserted by item 22) but with respect to the ABSTUDY student start-up loan.
31
Schedule 2 - Student start-up loans
The difference between these provisions is that, to be qualified for a student start-up
loan under section 7C, rather than being qualified on the basis of youth allowance or
austudy payment, a person at the qualification time has to be qualified for a payment
known as Living Allowance under the ABSTUDY Scheme and Living Allowance must
be payable to the person.
Section 7D - Circumstances in which person is not qualified for ABSTUDY student
start-up loan
Section 7D mirrors the operation of section 1061ZVBC of the Social Security Act
(as inserted by item 22) but with respect to an ABSTUDY student start-up loan.
Section 7E - Amount of ABSTUDY student start-up loan
Subsection 7E(1) provides that the amount of the ABSTUDY student start-up loan is
$1,025 and for the indexation rules for this amount, which mirror the treatment of
student start-up loans under the social security law.
Subsection 7E(2) provides that the ABSTUDY student start-up loan is indexed under
Division 2 of Part 3.16 of the Social Security Act on 1 January 2017 and each
subsequent 1 January, as if it were a student start-up loan amount referred to in the
table in subsection 1191(1) of that Act.
Division 3 - Indebtedness: incurring ABSTUDY SSL debts
Section 8A - Simplified outline of this Division
Section 8A briefly outlines the process for incurring ABSTUDY SSL debts.
Section 8B - ABSTUDY SSL debts
Section 8B mirrors the operation of section 1061ZVDA of the Social Security Act
(as inserted by item 22) but with respect to an ABSTUDY student start-up loan.
Section 8C - ABSTUDY SSL debt discharged by death
Section 8C mirrors the operation of section 1061ZVDB of the Social Security Act
(as inserted by item 22) but with respect to an ABSTUDY student start-up loan.
Section 8D - Notice to Commissioner
Section 8D mirrors the operation of section 1061ZVDC of the Social Security Act
(as inserted by item 22) but with respect to an ABSTUDY student start-up loan.
32
Schedule 2 - Student start-up loans
Division 4 - Indebtedness: working out accumulated ABSTUDY SSL debts
Section 9A - Simplified outline of this Division
Section 9A mirrors the simplified outline provided by section 1061ZVEA of the Social
Security Act (as inserted by item 22) but with respect to an ABSTUDY student
start-up loan.
Section 9B - Stage 1 - working out a former accumulated ABSTUDY SSL debt
Section 9B mirrors the operation of section 1061ZVEB of the Social Security Act
(as inserted by item 22) but with respect to an ABSTUDY student start-up loan.
Section 9C - Stage 2 - working out an accumulated ABSTUDY SSL debt
Section 9C mirrors the operation of section 1061ZVEC of the Social Security Act
(as inserted by item 22) but with respect to an ABSTUDY student start-up loan.
Section 9D - Rounding of amounts
Section 9D mirrors the operation of section 1061ZVED of the Social Security Act
(as inserted by item 22) but with respect to an ABSTUDY student start-up loan.
Section 9E - Accumulated ABSTUDY SSL debt discharges earlier debts
Section 9E mirrors the operation of section 1061ZVEE of the Social Security Act
(as inserted by item 22) but with respect to an ABSTUDY student start-up loan.
Section 9F - Accumulated ABSTUDY SSL debt discharged by death
Section 9F mirrors the operation of section 1061ZVEF of the Social Security Act
(as inserted by item 22) but with respect to an ABSTUDY student start-up loan.
Division 5 - Discharge of indebtedness
Section 10A - Simplified outline of this Division
Section 10A mirrors the simplified outline provided by section 1061ZVFA of the
Social Security Act (as inserted by item 22) but with respect to an ABSTUDY student
start-up loan.
Section 10B - Debts under this Part
Section 10B provides that a debt within the meaning of section 39 of the Act is not a
debt that arises under Part 2. This is because these debts relate to the ABSTUDY
student start-up loans, which are income-contingent loans and are therefore
administered differently to other debts arising under the Student Assistance Act.
33
Schedule 2 - Student start-up loans
Section 10C - Voluntary ABSTUDY SSL repayments in respect of debts
Section 10C mirrors the operation of section 1061ZVGA of the Social Security Act
(as inserted by item 22) but with respect to an ABSTUDY student start-up loan.
Section 10D - Application of voluntary ABSTUDY SSL repayments
Section 10D mirrors the operation of section 1061ZVGB of the Social Security Act
(as inserted by item 22) but with respect to an ABSTUDY student start-up loan.
Section 10E - Refunding of payments
Section 10E mirrors the operation of section 1061ZVGC of the Social Security Act
(as inserted by item 22) but with respect to an ABSTUDY student start-up loan.
Section 10F - Liability to repay amounts
Section 10F is similar in operation to section 1061ZVHA of the Social Security Act
(as inserted by item 22) but with respect to an ABSTUDY student start-up loan.
However, this provision differs in that it applies a priority rule to ensure that
ABSTUDY student start-up loan repayments only need to be made after SSL debts
are repaid.
Section 10G - Repayable ABSTUDY SSL debt for an income year
Section 10G mirrors the operation of section 1061ZVHB of the Social Security Act
(as inserted by item 22) but with respect to an ABSTUDY student start-up loan.
Section 10H - Commissioner may make assessments
Section 10H mirrors the operation of section 1061ZVHC of the Social Security Act
(as inserted by item 22) but with respect to an ABSTUDY student start-up loan.
Section 10J - Notification of notices of assessment of tax
Section 10J mirrors the operation of section 1061ZVHD of the Social Security Act
(as inserted by item 22) but with respect to an ABSTUDY student start-up loan.
Section 10K - Commissioner may defer making assessments
Section 10K mirrors the operation of section 1061ZVHE of the Social Security Act
(as inserted by item 22) but with respect to an ABSTUDY student start-up loan.
Section 10L - Commissioner may amend assessments
Section 10L mirrors the operation of section 1061ZVHF of the Social Security Act
(as inserted by item 22) but with respect to an ABSTUDY student start-up loan.
34
Schedule 2 - Student start-up loans
Division 6 - Tax administration matters
Section 11A - Simplified outline of this Division
Section 11A briefly outlines tax administration matters with regard to the ABSTUDY
student start-up loan.
Section 11B - Verification of tax file numbers
Section 11B mirrors the operation of section 1061ZVJB of the Social Security Act
(as inserted by item 22) but with respect to an ABSTUDY student start-up loan.
Section 11C - When person with tax file number incorrectly notifies number
Section 11C mirrors the operation of section 1061ZVJC of the Social Security Act
(as inserted by item 22) but with respect to an ABSTUDY student start-up loan.
Section 11D - When person without tax file number incorrectly notifies number
Section 11D mirrors the operation of section 1061ZVJD of the Social Security Act
(as inserted by item 22) but with respect to an ABSTUDY student start-up loan.
Section 11E - When tax file numbers are altered
Section 11E mirrors the operation of section 1061ZVJE of the Social Security Act
(as inserted by item 22) but with respect to an ABSTUDY student start-up loan.
Section 11F - When tax file numbers are cancelled
Section 11F mirrors the operation of section 1061ZVJF of the Social Security Act
(as inserted by item 22) but with respect to an ABSTUDY student start-up loan.
Section 11G - Returns, assessments, collection and recovery
Section 11G mirrors the operation of section 1061ZVJG of the Social Security Act
(as inserted by item 22) but with respect to an ABSTUDY student start-up loan.
Section 11H - Charges and civil penalties for failing to meet obligations
Section 11H mirrors the operation of section 1061ZVJH of the Social Security Act
(as inserted by item 22) but with respect to an ABSTUDY student start-up loan.
Section 11J - Pay as you go (PAYG) withholding
Section 11J mirrors the operation of section 1061ZVJJ of the Social Security Act
(as inserted by item 22) but with respect to an ABSTUDY student start-up loan.
35
Schedule 2 - Student start-up loans
Section 11K - Pay as you go (PAYG) instalments
Section 11K mirrors the operation of section 1061ZVJK of the Social Security Act
(as inserted by item 22) but with respect to an ABSTUDY student start-up loan.
Section 11L - Administration of this Part
Section 11L mirrors the operation of section 1061ZVJL of the Social Security Act
(as inserted by item 22) but with respect to an ABSTUDY student start-up loan.
Item 80 amends the definition of ABSTUDY debt to include an ABSTUDY student
start-up loan overpayment. This amendment is necessary given item 83 of this
Schedule inserts section 38A, which provides for the meaning of ABSTUDY student
start-up loan overpayment.
Item 81 amends the definition of debt to include an ABSTUDY student start-up loan
overpayment.
Item 82 makes technical amendments for the purposes of the amendment contained
in item 83.
Item 83 inserts new section 38A - ABSTUDY student start-up loans overpayments.
Section 38A operates in a similar way to section 1223ABF of the Social Security Act
(as inserted by this Schedule) as it sets out circumstances in which the ABSTUDY
start-up loan will not be treated as an income-contingent loan but as a debt owed by
the person to the Commonwealth.
Items 84 and 85 make minor amendments for the purposes of item 86.
Item 86 amends section 39 to provide that, where an ABSTUDY student start-up
loan payment becomes a debt recoverable by the Commonwealth, the ABSTUDY
student start-up loan overpayment is taken to have arisen when the person received
the loan to which the overpayment relates.
Item 87 amends section 39AA to ensure that deductions, for the purposes of
repaying debts, cannot be made from ABSTUDY student start-up loans.
Item 88 makes a minor amendment for the purposes of item 89.
Item 89 amends subsection 44A(7) to provide that subsection 44A(5) does not apply
in relation to recovery of an amount relating to an ABSTUDY student start-up loan.
This will mean that a student will have to provide their actual tax file number, rather
than lodging an application for a tax file number with the Department, in order to
meet the qualification requirements for the ABSTUDY student start-up loan.
Item 90 amends subsection 55A(1) to clarify that payments made in relation to
ABSTUDY student start-up loans are be to made out of the Consolidated Revenue
Fund, which is appropriated by law.
36
Schedule 2 - Student start-up loans
Item 91 makes a minor amendment for the purposes of item 92.
Item 92 amends section 302 to provide that Division 1 of Part 9 does not apply to a
decision that is reviewable under section 308A.
Item 93 inserts into Part 9 new Division 1A, relating to internal review of
Commissioner decisions relating to ABSTUDY student start-up loans.
Division 1A - Internal review of Commissioner decisions relating to ABSTUDY
student start-up loans
Section 308A - Decisions reviewable under this Division
Section 308A mirrors the operation of section 138A of the Social Security
Administration Act (as inserted by item 55) but with respect to reviewable decisions
in relation to ABSTUDY student start-up loans.
Section 308B - Commissioner must give reasons for reviewable decisions
Section 308B mirrors the operation of section 138B of the Social Security
Administration Act (as inserted by item 55) but with respect to reviewable decisions
in relation to ABSTUDY student start-up loans.
Section 308C - Reviewer of decisions
Section 308C mirrors the operation of section 138C of the Social Security
Administration Act (as inserted by item 55) but with respect to reviewable decisions
in relation to ABSTUDY student start-up loans.
Section 308D - Reviewer may reconsider reviewable decisions
Section 308D mirrors the operation of section 138D of the Social Security
Administration Act (as inserted by item 55) but with respect to reviewable decisions
in relation to ABSTUDY student start-up loans.
Section 308E - Notice to AAT Registrar
Section 308E is a mirror provision to section 138E of the Social Security
Administration Act (as inserted by item 55) but with respect to reviewable decisions
in relation to ABSTUDY student start-up loans.
Section 308F - Reconsideration of reviewable decisions on request
Section 308F mirrors the operation of section 138F of the Social Security
Administration Act (as inserted by item 55) but with respect to reviewable decisions
in relation to ABSTUDY student start-up loans.
37
Schedule 2 - Student start-up loans
Section 308G - Withdrawal of request
Section 308G mirrors the operation of section 138G of the Social Security
Administration Act (as inserted by item 55) but with respect to reviewable decisions
in relation to ABSTUDY student start-up loans.
Section 308H - AAT review of reviewable decisions
Section 308H mirrors the operation of section 138H of the Social Security
Administration Act (as inserted by item 55) but with respect to reviewable decisions
in relation to ABSTUDY student start-up loans.
Section 308J - Decision changed before AAT review completed
Section 308J is a mirror provision to section 138J of the Social Security
Administration Act as proposed to be inserted by this Bill.
Item 94 is similar to the operation of the new paragraphs inserted into section 144 of
the Social Security Administration Act by item 56 but with respect to ABSTUDY
student start-up loans, and also deals with limiting Social Security Appeals Tribunal
review to avoid duplication of merits review processes.
Amendments to the Taxation Administration Act
Item 95 inserts a definition of compulsory ABSTUDY SSL repayment amount into
the Act.
Item 96 inserts a definition of compulsory SSL repayment amount into the Act.
Item 97 amends section 8AAZLD to provide that any compulsory SSL repayment
amount of the entity and then any compulsory ABSTUDY SSL repayment amount
will be prioritised in that order after any compulsory repayment amount but before
any FS assessment debt when the Commissioner applies a credit that arises under
the Pay As You Go system.
Items 98, 99, 100 and 101 are amendments consequential to other amendments
made to the Income Tax Assessment Act 1936 by this Bill, and deal with exceptions
to rules limiting quoting and recording tax file numbers.
Item 102 amends section 6-1 in Schedule 1 to allow for the Pay As You Go system
to collect amounts that go towards meeting liability to repay debts in relation to
student start-up loans and ABSTUDY student start-up loans.
Item 103 amends the objects in section 11-1 of Schedule 1 to ensure that the object
Part 2-11 is to ensure the efficient collection of amounts of liabilities to the
Commonwealth under Chapter 2AA of the Social Security Act or under Part 2 of the
Student Assistance Act.
38
Schedule 2 - Student start-up loans
Item 104 inserts references to the new paragraphs inserted by item 103 into
subsection 15-25(1) in Schedule 1, about the Commissioner's power to make
withholding schedules.
Item 105 amends section 15-30 of Schedule 1 to ensure that the Commissioner
must have regard to the applicable percentages in section 1061ZVHA of the Social
Security Act and the equivalent provision in the ABSTUDY SSL scheme when
making a withholding schedule.
Item 106 inserts references to the new paragraphs inserted by item 103 into the
provision in Schedule 1 about declarations.
Item 107 amends the object in section 45-5 of Schedule 1 (about PAYG instalments)
to cover the efficient collection of amounts of liabilities to the Commonwealth under
Chapter 2AA of the Social Security Act or under Part 2 of the Student Assistance
Act.
Item 108 amends section 45-340 in Schedule 1 to insert steps 3AA and 3AB to the
method statement on adjusted tax on adjusted taxable income or adjusted
withholding income.
Item 109 makes technical amendments to step 4 of the method statement in
section 45-340 in Schedule 1 to take account of new steps 3AA and 3AB as inserted
by item 108.
Item 110 amends the method statement in section 45-375 in Schedule 1 to insert
steps 3AA and 3AB for adjusted assessed tax on adjusted assessed taxable income.
Item 111 makes a technical amendment to step 4 of the method statement in
section 45-375 in Schedule 1 to take account of new steps 3AA and 3AB as inserted
by item 110.
Item 112 amends the table in subsection 250-10(2) to include any compulsory SSL
and ABSTUDY SSL repayment amount in the adjusted taxable income calculation.
Amendments to the Taxation (Interest on Overpayment and Early Payments)
Act 1983
Items 113 and 114 insert into the Act definitions of compulsory ABSTUDY SSL
repayment amount and compulsory SSL repayment amount.
Items 115 and 116 amend the table in either section 3C or subsection 3C(1)
(depending on whether the Minerals Resources Rent Tax Repeal and Other
Measures Bill 2014 is enacted, which proposes to remove the subsections from
section 3C) so that compulsory SSL repayment amounts and ABSTUDY SSL
repayment amounts are identified as relevant tax law for the purposes of the Act.
39
Schedule 2 - Student start-up loans
Items 117 and 118 amend section 8A to ensure compulsory SSL repayment
amounts and ABSTUDY SSL repayment amounts are payments for which interest is
payable by the Commissioner to the person on the payment, calculated in respect of
the period applicable under section 8B at the rate specified in section 8C.
Items 119 and 120 amend paragraphs 8E(1)(d) and 8E(2)(d) to ensure that interest
can be paid when crediting amounts in excess of any compulsory SSL repayment
amounts and compulsory ABSTUDY SSL repayment amounts.
Item 121 amends a subsection proposed to be inserted by the Trade Support Loans
(Consequential Amendments) Bill 2014 (subsection 12A(1A)(b)) to include
references to compulsory SSL repayment amounts and compulsory ABSTUDY SSL
repayment amounts under existing subparagraph 12A(1)(a)(iv) (dealing with when
interest is payable by the Commissioner to the person on the amount remitted,
refunded or credited, calculated in respect of a certain period). The commencement
of this provision is contingent on the passage of the Trade Support Loans
(Consequential Amendments) Bill 2014.
Amendments to the Trade Support Loans Act 2014
Items 122 and 123 insert references to certain other income-contingent loan
schemes (such as a student start-up loan) into the simplified outlines at section 3
and 39 of that Act.
Item 124 factors student start-up loans into the formula in subsection 46(1) such that
`relevant income contingent loans liability' will include the sum of a person's liability
to pay in respect of provisions dealing with their accumulated HELP debt, their
accumulated SSL debt and their accumulated ABSTUDY SSL debt, for the purposes
of reducing the persons repayable TSL debt liability for an income year (before these
amendments, only a person's HELP liability was factored into this formula). This is
effectively a priority rule so that, where a person has multiple income-contingent loan
liabilities, a person's HELP debt, SSL debt and ABSTUDY SSL debt are repaid
before any debt they may have under the Trade Support Loans scheme.
Application and savings provisions
Item 125 ensures that an instrument made by the Minister to determine that a course
is an approved scholarship course remains effective (for example, in relation to
relocation scholarship payments) despite amendments made by this Bill to ensure
continuity of qualification for payments which depends upon any such instrument.
Item 126 contains a number of application provisions dealing with the repeal of
student start-up scholarship provisions. Notably, in spite of the repeal of the
qualification provisions for that payment, those provisions continue to apply in
relation to qualification prior to repeal (which may be important to clarify during
reviews about qualification occurring after repeal in relation to qualification prior to
repeal). There are also rules to clarify that debts can still be raised and that claim
rules and payment rules for the discontinued student start-up scholarship payment
remain effective in relation to payments a person was qualified for before
commencement.
40
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011
Social Services and Other Legislation Amendment (Student Measures)
Bill 2014
This 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.
Overview of the Bill
Schedule 1 - Interest charge
Schedule 1 to the Bill amends the Social Security Act 1991 (the Social Security Act)
and the Student Assistance Act 1973 (the Student Assistance Act) in order to
introduce an interest charge on debts relating to austudy, fares allowance, youth
allowance payments to full-time students and apprentices, and ABSTUDY Living
Allowance.
The current lack of an interest charge on student income support debt means
recipients have no incentive to repay their debts. Once the interest charge is in
place, debtors will have a pressing incentive to engage with the Department of
Human Services to make a repayment arrangement in order to avoid the interest
charge.
It is also important to note that a debt only arises under the Social Security Act or the
Student Assistance Act where a person receives a payment to which they were not
entitled. Furthermore, an interest charge can only be applied to the person and the
debt where the person has not entered into a repayment arrangement, has failed to
comply with a repayment arrangement, or has terminated a repayment arrangement
without entering into a new repayment arrangement.
In negotiating a repayment arrangement, the Department of Human Services will
take into account the circumstances of the debtor, and will suggest repayment
amounts based on the debtor's financial capacity. Where a debtor is experiencing
financial hardship, repayment arrangements can be paused and no interest charge
applied for that period of time. Students will also be able to continue to receive
income support payments whilst repaying any debt and interest charge incurred.
Additionally, an interest charge will not be applied where a person is in
circumstances prescribed in a legislative instrument made by the Minister. It is
envisaged that the prescribed circumstances would be where the amount that is
being withheld from the person's payments (under current section 1231 of the Social
Security Act) is satisfactorily repaying the debt.
1
Statement of compatibility with human rights
An interest charge can only be applied if the person has been issued a notice in
respect of a debt, which will outline the reason why the debt was incurred,
the outstanding amount of the debt, the effect of an interest charge applying, and the
day on which the debt is due and payable. When the debt is initially incurred,
a notice in respect of a debt will provide that the debt is due and payable 28 days
after the notice has been issued. In the event that a repayment arrangement has
been terminated, a newly-issued notice will provide that the debt is due and payable
14 days after the notice has been issued. This will ensure that the person will have
sufficient time either to repay the outstanding debt or to enter into a repayment
arrangement and thereby avoid the application of an interest charge.
The interest rate is calculated by adding seven percentage points to the monthly
average yield of 90-day Bank Accepted Bills (as published by the Reserve Bank of
Australia). This is considered an appropriate method for calculating the rate of the
interest charge to apply to income support debt because the rate is high enough to
encourage repayment without being punitive, and it provides a return to the
Commonwealth, commensurate with the time value of the monies overpaid.
Schedule 2 - Student start-up loans
Schedule 2 amends the Social Security Act and the Student Assistance Act to cease
the student start-up scholarship (SSS), from 1 January 2015, for recipients of student
payments who are participating in higher education. Students will instead be able to
receive either an ABSTUDY student start-up loan or a student start-up loan
(the loans), which are voluntary income-contingent loans, equivalent in value to the
SSS. These loans will be available to full-time higher education students who are in
receipt of youth allowance (student), austudy or ABSTUDY (Living Allowance).
Students will be limited to two loans per year of $1,025 each (indexed from 2017),
in line with the current SSS arrangements, and will be repayable under similar
arrangements to Higher Education Loan Programme (HELP) debts. Students will
only be required to begin repaying the loans once their earnings are above the
repayment threshold (which will be consistent with the HELP repayment thresholds)
and after any accumulated HELP debt has been paid.
Human rights implications
Right to education
Schedule 1 to the Bill engages the right to education contained in Article 13 of the
International Covenant on Economic, Social and Cultural Rights (ICESCR).
In particular, article 13(2)(b) states that secondary education, in all its different forms,
including technical and vocational secondary education, shall be made generally
available and accessible to all by every appropriate means and, in particular, by the
progressive introduction of free education.
2
Statement of compatibility with human rights
Schedule 1 - Interest charge
Schedule 1 does not limit the right to education. The interest charge is intended as
an incentive for debtors to repay debts in a timely fashion, where they have the
financial capacity to do so. Given that a debtor's financial capacity will be taken into
account before a repayment arrangement is agreed to, the interest charge will not
limit the debtor's ability to access education.
Schedule 2 - Student start-up loans
Schedule 2 to the Bill does not limit the right to education. While the SSS will not be
available for student payment recipients after 1 January 2015, people who would
otherwise be entitled to the SSS will be eligible for the student start-up loan.
The purpose of the SSS and the loans are identical as both payments are designed
to help students with the up-front costs of textbooks and equipment. Under the
loans, students will be eligible for the same payment amount as the SSS
($1025 twice per calendar year, to be indexed from 2017). In this way, students will
still have access to funds to assist them with the up-front costs of study.
Income-contingent loans do not place an onerous burden on debtors, as repayments
are proportional to a person's income, meaning that those on lower incomes do not
have to repay large amounts, unlike other types of loan (such as bank loans).
The fact that the loans are repayable once the person reaches a particular income
threshold will not limit a person's right to education.
Furthermore, students who never reach the minimum threshold, because they do not
obtain the financial benefits of their studies in higher education, will not be required
to repay the loan.
Various studies have concluded that income-contingent loans are not a deterrent to
study. These studies have identified no significant effects on university enrolments,
including from low socio-economic students, from either the introduction of,
or changes to, HELP.
Right to social security
Schedules 1 and 2 to the Bill engage the right to social security contained in article 9
of the ICESCR.
The right to social security requires that a system be established under domestic
law, and that public authorities must take responsibility for the effective
administration of the system. The social security scheme must provide a minimum
essential level of benefits to all individuals and families that will enable them to cover
essential living costs.
The United Nations Committee on Economic, Cultural and Social Rights
(the Committee) has stated that a social security scheme should be sustainable and
that the conditions for benefits must be reasonable, proportionate and transparent
(see General Comment No.19).
3
Statement of compatibility with human rights
Article 4 of ICESCR provides that countries may limit the rights such as to social
security in a way determined by law only in so far as this may be compatible with the
nature of the rights contained within the ICESCR and solely for the purpose of
promoting the general welfare in a democratic society. Such a limitation must be
proportionate to the objective to be achieved.
Schedule 1 - Interest charge
To the extent that interest is charged on a person's debt, any impact will be limited
and will have a very marginal effect on the ability of a person to cover essential living
costs or acquire basic forms of education, thereby engaging a person's right to social
security. The provisions in Schedule 1 are therefore unlikely to limit this right, given
the appropriate safeguards put in place to protect it.
As noted above, it is intended that the provisions introduced by Schedule 1 will allow
the efficient recovery of social security payments, supporting effective and efficient
administration of the social security system. This measure is proportionate in
achieving this policy objective as all persons can avoid an interest charge by
entering into a repayment arrangement, and these rights are safeguarded by the
requirements of notice and periods of time in which a person will be able to pay back
the debt or enter into an arrangement. Furthermore, the Secretary will have the
discretion in appropriate circumstances to waive a debt, including any interest
charged on the debt.
By allowing the efficient recovery of social security payments, Schedule 1 ensures
the financial sustainability of the social security system. The interest charge, as it
applies to persons who receive payments to which they are not entitled, is a
reasonable condition on the benefits of the system as it encourages recipients to
repay those amounts and ensures that the Commonwealth is able to recover the real
value of these amounts. The interest charge, as a condition, is also transparent as it
is provided for in legislation, will be accurately communicated through the
Department's website, and can only be applied after the recipient is given notice.
This ensures that all stakeholders will be informed of how the interest charge will
operate before it is applied to recipients.
Therefore, Schedule 1 to the Bill will be compatible with the right to social security as
the potential limitation on this right is proportionate to the policy objective and
intended to improve the administration of social security system.
4
Statement of compatibility with human rights
Schedule 2 - Student start-up loans
To the extent that there is an impact on a person's right to social security by virtue of
Schedule 2, the impact is limited. In practice, a person will still be entitled to the
same amount of financial assistance under the loans as they would have received
from an SSS, and will only be required to repay the loans once they reach the
relevant threshold level of income. This threshold is set at a level of income at which
a person would no longer require financial assistance to acquire essential health
care, housing, water and sanitation, foodstuffs, and education. Given the above
safeguards, and the fact that the loans will be given on a voluntary basis (that is,
a debtor does not need to incur debt) the measures contained in Schedule 2 are
compatible with the rights to social security.
It is well established that higher education graduates gain substantial private benefits
from their studies, including higher lifetime earnings than non-graduates, increased
job satisfaction, higher social status and better health. As the community
substantially pays the costs of these benefits through a range of services and
supports for students, it is reasonable and proportionate that the students be
expected to repay a proportion of those costs when they are financially able. This is
the basis for the existing arrangements for assistance provided through HELP for
tuition fees.
Converting the SSS into an income-contingent loan recognises the benefits students
receive from higher education, while still ensuring that higher education is accessible
to all socio-economic groups. Students from low socio-economic backgrounds will
continue to receive fortnightly payments of youth allowance (student), austudy or
ABSTUDY (Living Allowance).
Additionally, the Government is committed to providing continuing support to
students. The relocation scholarship, for dependent students who are required to
move from or to a regional area to study and some independent students, will
continue to be provided as a grant to all eligible students. Other student payments
will also remain unaffected by the loans measure.
Taking into account the continued access to fund the costs of study, the
amendments to the SSS are consistent with a person's rights to social security and
to an adequate standard of living.
Right to an adequate standard of living, including food, water and housing
Schedule 1 to the Bill engages the right to an adequate standard of living, including
food, water and housing, contained in article 11 of the ICESCR.
The right to an adequate standard of living, including food, water and housing
provides that everyone is entitled to adequate food, clothing and housing and to the
continuous improvement of living conditions.
5
Statement of compatibility with human rights
Schedule 1 - Interest charge
To the extent that there is an impact on a person's right to an adequate standard of
living, including food, water and housing, by virtue of Schedule 1, the impact is
limited.
It is intended that the provisions of Schedule 1 will allow the efficient recovery of
social security payments, which will ultimately improve the efficacy of the social
security system. This measure is proportionate in achieving this policy objective as
all persons can avoid an interest charge by entering into a repayment arrangement,
and these rights are safeguarded by the requirements of notice and periods of time
in which a person will be able to repay the debt or enter into an arrangement.
The Secretary will also have the discretion to waive a debt in appropriate
circumstances, including any interest charged on the debt.
Furthermore, by allowing the efficient recovery of social security payments,
Schedule 1 ensures the financial sustainability of the social security system.
The interest charge, as it applies to people who receive payments to which they are
not entitled, is a reasonable condition on the benefits of the system as it encourages
recipients to repay those payments and ensures that the Commonwealth is able to
recover the real value of these amounts. The interest charge is also transparent as it
is provided for in legislation, will be accurately communicated through the
Department's website, and can only be applied after the recipient is given written
notice. This ensures that all stakeholders will be informed of how the interest charge
will operate before it is applied.
Therefore, Schedule 1 to the Bill will be compatible with the right an adequate
standard of living as the potential limitations on this right are proportionate to the
policy objective and are intended to improve the administration of the social security
system.
Right to equality and non-discrimination
To avoid doubt, Schedules 1 and 2 do not engage the right to equality and
non-discrimination contained in articles 2 and 26 of the International Covenant on
Civil and Political Rights either on the basis of race or `other' status.
Article 2(1) of the International Covenant on Civil and Political Rights obligates each
State party to respect and ensure to all persons within its territory and subject to its
jurisdiction the rights recognised in the Covenant without distinction of any kind, such
as race, colour, sex, language, religion, political or other opinion, national or social
origin, property, birth or other status1.
1
CCPR General Comment No. 18
6
Statement of compatibility with human rights
Article 26 not only entitles all persons to equality before the law as well as equal
protection of the law, but also prohibits any discrimination under the law and
guarantees to all persons equal and effective protection against discrimination on
any ground such as race, colour, sex, language, religion, political or other opinion,
national or social origin, property, birth or other status2.
It is important to note, however, that not all differential treatment will be considered
discriminatory. The Committee on Economic, Social and Cultural Rights has
provided the following commentary on when differential treatment will be considered
discriminatory:
Differential treatment based on prohibited grounds will be viewed as
discriminatory unless the justification for differentiation is reasonable and
objective. This will include an assessment as to whether the aim and effects
of the measures or omissions are legitimate, compatible with the nature of the
Covenant rights and solely for the purpose of promoting the general welfare in
a democratic society. In addition, there must be a clear and reasonable
relationship of proportionality between the aim sought to be realised and the
measures or omissions and their effects. A failure to remove differential
treatment on the basis of a lack of available resources is not an objective and
reasonable justification unless every effort has been made to use all
resources that are at the State party's disposition in an effort to address and
eliminate the discrimination, as a matter of priority3.
Schedule 1 - Interest charge
Discrimination on the basis of race
Schedule 1 to the Bill will apply an interest charge to all debts resulting from student
income support debts, including ABSTUDY Living Allowance, which supports
Indigenous Australians. However, there is no differential treatment on the basis of
race as the interest charge will apply equally to all student debtors.
For these reasons, Schedule 1 to the Bill will not engage the right of equality and
non-discrimination.
Discrimination on the basis of `other status'
Schedule 1 to the Bill applies an interest charge to debts with respect to
overpayments to students (rather than all social security overpayments).
This will not be a limitation on the right to equality and non-discrimination as the
differential treatment is for a reasonable and objective purpose.
2
CCPR General Comment No. 18
3
CESCR, General Comment No 20
7
Statement of compatibility with human rights
Recipients of these payments generally transition from study to employment
(and thus are no longer recipients of social security payments) before the full amount
of the debt is repaid through the social security withholding mechanism. Once
people have left payments, many often choose not to repay the debt, and indeed
there is currently little incentive for them to do so.
It is therefore reasonable and objective to apply an interest charge to debts with
respect to the above mentioned types of payment to ensure that people with a debt
repay the outstanding amount in a timely fashion. Recipients of these payments will
be able to avoid the interest charge altogether by either repaying their debt within
28 days of being notified of the debt or by entering into an acceptable repayment
arrangement.
For these reasons, Schedule 1 to the Bill will not engage the right of equality and
non-discrimination.
Schedule 2 - Student start-up loans
While the provisions of Schedule 2 will establish an ABSTUDY student start-up loan
(which, given the eligibility criteria for ABSTUDY, will mean that loan recipients are
necessarily of Aboriginal or Torres Strait Islander descent), an equivalent student
start-up loan will also be established for those who are eligible for youth allowance
(student) and austudy (where youth allowance (student) and austudy are available to
non-Indigenous and Indigenous people). As the provisions for the student start-up
loan mirror the provisions for the ABSTUDY student start-up loan, there will be no
effective distinction between Indigenous and non-Indigenous recipients of these
loans.
For these reasons, Schedule 2 to the Bill will not engage the right of equality and
non-discrimination.
Conclusion
This Bill is compatible with human rights. To the extent that it may have limited
adverse impact on a person's access to education, social security, an adequate
standard of living or the right to equality and non-discrimination, the limitation is
reasonable, proportionate to the policy objective and for legitimate reasons.
Minister for Social Services, the Hon Kevin Andrews MP
8