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AUSTUDY REGULATIONS (AMENDMENT) 1993 NO. 367
EXPLANATORY STATEMENTSTATUTORY RULES 1993 No. 367
Issued by the Authority of the Minister for Schools, Vocational Education and Training
Subject - Student Assistance Act 1973
AUSTUDY Regulations (Amendment)
The Student Assistance Act 1973 (the Act) provides the legislative authority for the AUSTUDY Scheme and for a debt management regime for the AUSTUDY, ABSTUDY and Assistance for Isolated Children Schemes. These schemes pay financial assistance directly to students or their parents.
Section 56 of the Act provides that the Governor-General may make regulations for the purposes of the Act.
The policy changes to the AUSTUDY Scheme made by the proposed Regulations are listed in Attachment A. These Regulations implement:
• changes to the AUSTUDY scheme announced in the 1993 Budget; and
• a number of minor changes and corrections to the existing AUSTUDY Regulations.
These Regulations commence on 1 January 1994, apart from:
• regulations 7.1 and 51.1, which are taken to have commenced on 1 January 1993. Both subregulations provide for amendments to reflect policy that has been applied in 1993. These amendments will benefit students.
• regulations 13 and 16, which are taken to have commenced on 30 June 1992. These regulations provide for consequential amendments that follow an amendment to the Acts Interpretation Act 1901 that came into effect on 30 June 1992. These amendments will have no effect on students' entitlements.
• subregulations 40.1 and 45.2, which are taken to have commenced on 20 March 1993. These regulations involve only changes to statutory citations. The amendments will have no effect on students' entitlement
• subregulation 11.3, which will commence on 20 March 1994. This regulation complements a parallel amendment to the Social Security Act 1991 that will be effective effective from the same day.
A detailed explanation of the Regulations is set out in Attachment B.
ATTACHMENT A
CHANGES INCLUDED IN THE PROPOSED REGULATIONS
1. Changes announced by the Government in the 1993 Budget:
• Sixteen year old secondary students living at home will no longer be entitled to AUSTUDY. They will remain in the DSS Family Payments System. (Regulation 4)
• Students returning to full-time study after a break of more than one semester will be entitled to AUSTUDY only from the first day of the course. Payment will no longer be made from the beginning of the year for these students. (Subregulation 5.1)
• A series of short courses which together count towards the same award or accreditation (i.e., articulated short courses) will be treated in the same way as a single course. This will allow payment for vacations and other breaks between course stages. (Subregulations 5.2 and 6.2)
• AUSTUDY for secondary students under the age of 18 and living at home will be paid to their parents. Where students are boarding away from home, parents will be able to choose to have AUSTUDY paid to themselves. An exception to this rule is where the Department reasonably believes that AUSTUDY payments would not be applied to the support of the student. Previously, payments were made to the student unless the parent directed that payments should be made to him or herself. (Regulation 8)
• Persons receiving jobsearch allowance (JSA) or newstart allowance (NSA) who start study in courses of six months or less in duration will not be entitled to AUSTUDY but remain on JSA or NSA if the Secretary to the Department of Social Security has directed them to undertake the course. Persons receiving JSA or NSA who undertake a course of any duration not at the Secretary's direction will transfer to AU.STUDY. The Social Security Act 1991 is to be amended to allow the Department of Social Security to continue to pay JSA of NSA for up to three weeks after the commencement of study for the latter group. (Subregulation 11.3)
• Students under training agreements will no longer be ineligible for AUSTUDY.
(Regulation 12)
• Students who have been enrolled in a degree for Master or Doctor for six months or more, who have not completed the degree, will no longer be ineligible for AUSTUDY. (Regulation 19)
• Study for a course undertaken more than 10 years ago will no longer be counted for the purpose of the progress rules provided the course has not been completed within the last ten years. (Regulation 22)
• Secondary students will no longer qualify for AUSTUDY at the away-from-home rate on the basis that they are enrolled in certain prescribed special courses. However, students entitled to the away-from-home rate in 1993 will continue to be paid at this rate for the duration of their present courses. (Regulation 34)
• The parental and spouse income tests will no longer apply where a student's parent or spouse has a Health Care Card. (Subregulations 40.2 and 45.3)
• Where there has been an increase of 25% or more in parental or spouse income during the year of study, the student's entitlement will be reassessed on the basis of the increased income for the period from 1 October to 31 December. Previously, parental and spouse income for the most recent financial year ending before the year of study has been taken into account for the parental and spouse income tests unless this resulted in hardship. (Subregulations 36.4, 42.2 and 56.1)
2. Other changes
• The duration of a student's AUSTUDY entitlement will not be affected by late commencement where the student is prevented from starting full-time study within the specified time because of illness or other circumstances beyond the student's control. (Regulation 7)
• The maximum values of assets for the assets tests for students, their spouses and their families will be increased in accordance with increases in Average Weekly Earnings. (Regulation 9)
• The requirements that a company or trust must be controlled by family members for the value of the company or trust to be discounted in the same way as other business assets in calculating the value of business assets for the purpose of the assets test will be removed. (Regulation 10)
• Students receiving assistance under the New Enterprise Incentive Scheme (NEIS) will not be eligible for AUSTUDY. (Regulation 11.1)
• Study towards an overseas qualification, whether completed or not, will be disregarded in the assessment of a student's eligibility for AUSTUDY, unless the study leads to the completion of a qualification of the same standing as an Australian degree of Master or Doctor. (Regulation 18.4)
• The time spent in previous study by students with a disability or students getting certain categories of pensions will be assessed in the same way as for other students for the period before they became disabled or entitled to a relevant pension. (Regulation 26)
• The maximum amounts of living allowances will be increased in accordance with increases in the Consumer Price Index. (Regulation 28 and subregulation 30.1)
• The age at which a student will become eligible for AUSTUDY at the independent rate is to be reduced from 24 to 23. (Regulation 32)
• Fringe benefits paid to a student's parent or spouse will be taken into account in calculating parental and spouse income for the purpose of the parent and spouse income test. The amount by which the total amount of fringe benefits exceeds $1000 will be included as parental or spouse income. (Subregulations 36.1 and 42.1)
• The thresholds for the parental and spouse income tests will be increased in accordance with increases in Average Weekly Earnings. (Regulations 38 and 43)
• A student will be exempt from the spouse income test where the student's spouse receives assistance under the New Enterprise Incentive Scheme (NEIS). (Subregulation 45.1)
• A student who trades in all of his or her AUSTUDY entitlement in exchange for a loan under the AUSTUDY/ABSTUDY Supplement scheme will not be disqualified from receiving the fares allowance under AUSTUDY. (Regulation 47)
• A student who receives the mature age allowance, the mature age partner's allowance or the rehabilitation allowance under the Social Security Act 1991 will not be eligible for AUSTUDY. (Subregulation 53.3)
• A student who receives the special benefit under the Social Security Act 1991 will be eligible for the AUSTUDY pensioner education supplement. (Subregulation 53.7)
• A number of corrections and minor amendments required because of changes to other legislation and State education systems.
ATTACHMENT B
Details of the AUSTUDY Regulations (Amendment)
Regulation 1. Commencement
Subregulation 1.1 provides that these regulations will commence on 1 January 1994 except for those specified in subregulations 1.2, 1.3, 1.4 and 1.5 (see below).
Subregulation 1.2 provides that subregulations 7.1 and 51.1 will be taken to have commenced on 1 January 1993. Both subregulations are beneficial amendments.
Subregulation 1.3 provides that regulations 13 and 16 will commence on 30 June 1992. These regulations provide for consequential amendments that follow an amendment to the Acts Interpretation Act 1901 that came into effect on 30 June 1992. They have no effect on client entitlements.
Subregulation 1.4 provides that subregulations 40.1 and 45.2 will commence on 20 March 1993. These regulations provide for amendments required because of the replacement of the Rural Adjustment Scheme by the Farm Household Support Scheme, under the Farm Household Support Act 1992, from 20 March 1993 which has consequently altered a citation in the AUSTUDY Regulations. The amendments involve changes to statutory citations and have no effect on client entitlement.
Subregulation 1.5 provides that subregulation 11.3 will commence on 20 March 1994. This commencement date is the same as that of the parallel amendment to the Social Security Act 1991 (see subregulation 11.3 below).
Regulation 2. Repeal of determination made under subsection 10(2) of Act.
Subregulation 2.1 provides for the determination made under subsection 10(2) of the Student Assistance Act 1973 on 21 December 1990 to be repealed. The determination set out the persons to whom AUSTUDY was payable, i.e. students or their parents. The determination is to be replaced by a new regulation (see commentary on subregulation 8.1 below).
Regulation 3. Amendment
Subregulation 3.1 provides that the AUSTUDY Regulations win he amended as set out in these Regulations.
Regulation 4. Regulation 5 (Age)
Subregulation 4.1 inserts new subregulation 5(2) in the AUSTUDY Regulations. Subregulation 5(2) provides that secondary students living at home as dependants of their parents or guardians, turning 16 on or after 1 March 1994 and attending secondary schools will not be eligible for AUSTUDY until they turn 17. These students will fall under the Family Payments Scheme and parallel amendments are being made to the Social Security Act 1991.
Regulation 5. Regulation 7 (When is AUSTUDY payable from?)
Subregulation 5.1 inserts new subregulation 7(1A) in the AUSTUDY Regulations. Subregulation 7(1 A) provides that students returning to study after a break in study of more than one semester (not counting the normal vacation periods) will be paid only from the commencement of their courses without backdating to 1 January, for students returning to study at the beginning of the year, or 1 July, for students returning for study in second semester. A concession will apply in the case of students whose break from study was caused by illness or other circumstances. beyond their control.
Subregulation 5.2 inserts new subregulations 7(3) and 7(4) in the AUSTUDY Regulations.
Background
It is increasingly common, particularly for TAFE level courses, that individual short courses ('articulated short courses') may be linked into a chain (an 'articulated short course sequence') leading to further qualifications. Typically, a student might start by undertaking a certificate course. On completion, the student then enrols in another certificate course that, in conjunction with the first, will lead to an advanced certificate. At the end of the second course the student chooses to do a third course that, taken with the preceding two, will lead to an associate diploma.
The result of this articulated short course sequence can be that the student is effectively in continuous full time study, just as if undertaking a single course running over a full year. However, previously AUSTUDY has treated such students as undertaking a series of short courses and this meant that some gaps in payment could occur between courses in the sequence. The proposed legislation will ensure that students undertaking an articulated short course sequence will be paid for the same period as other students undertaking single courses of equivalent length.
Subregulation 7(3) provides that an articulated short course sequence will be treated on the same basis as other courses of the same length under the AUSTUDY Regulations. Subregulation 7(4) defines the terms 'articulated short course and 'articulated short course sequence'.
Regulation 6. Regulation 8 (AUSTUDY is payable until when?)
Subregulation 6.1 amends subregulation 8(1) and adds a new subregulation 8(3) to the AUSTUDY Regulations. Subregulation 8(1) is amended to clarify that students in late starting courses (ie courses that are longer than 30 weeks and start after 31 March but before 1 July) are paid to 31 December providing the last day of the course is 15 September or later. Subregulation 8(3) provides that an articulated short course sequence means a full year course, a late starting course or a short course depending on the length of the sequence (see subregulation 5.2 above).
Regulation 7. Regulation 9 (Is AUSTUDY paid for the long vacation?)
Subregulation 7.1 deletes the previous paragraph 9(1)(b) and inserts a new paragraph 9(1)(b) into the AUSTUDY Regulations. Paragraph 9(1)(b) provides that students who start their courses late will not be penalised in terms of their AUSTUDY entitlement, provided that they were prevented from starting on time because of illness or other circumstances beyond their control; or, in the case of secondary students, the schools approved the absence. This concession has not been available previously under the Regulations.
Regulation 8. Regulation 12A (Frequency of payments)
Subregulation 8.1 omits regulation 12A of the AUSTUDY Regulations and inserts a new regulation 12A (When and to whom is AUSTUDY paid?). Regulation 12A replaces the previous Ministerial Determination specifying to whom AUSTUDY may be paid (see amending regulation 2.1 above).
AUSTUDY payments will generally be made to the student except in the case of secondary students:
• under 18 years of age,
• who usually live with their parents during the academic year, and
• whose living allowance is calculated on the basis of parental income (that is, they are eligible for the standard or away-from-home rate of living allowance).
Where a secondary student is boarding away from home, the student's parent may elect that the student receive the payments.
Payments will be made to the student in the following circumstances:
• where the student qualifies for the independent rate of AUSTUDY;
• where the student is in State care; or
• where evidence has been given to an authorised person that payment of AUSTUDY to a student's parent would be unreasonable on the ground that the AUSTUDY payment would not be directed to the student's welfare.
Regulation 9. Regulation 13 (Do assets affect AUSTUDY?)
Subregulation 9.1 amends subregulation 13(1) of the AUSTUDY Regulations. Subregulation 13(1) provides for the thresholds of the AUSTUDY assets test to reflect movements in average weekly earnings.
Regulation 10. Regulation 19 (How are business assets treated?)
Subregulation 10.1 omits paragraphs 19(2)(c) and (d) of the AUSTUDY Regulations and inserts new paragraphs 19(2)(c) and (d). Paragraphs 19(2)(c) and (d) provide for changes to the rules on how business assets are to be treated for the purposes of the assets test where the business is a company or trust. Under Regulation 19 of the AUSTUDY Regulations, the assets test applies a 50% discount to the value of a person's interest in a business if the person, or his or her spouse, is wholly or mainly engaged in the business. In the case of a company, the company must also be controlled by family members for the discount to apply; in the case of a trust, more than 50% of the trust must also be controlled by family members. No such restrictions apply in the case of partnerships. This amendment will remove these restrictions so that business interests consisting of companies or trusts will be placed on the same footing as partnerships.
Regulation 11. Regulation 22 (Excluded: (b) certain students getting pensions and allowances)
Subregulation 11.1 amends subregulation 22(1) of the AUSTUDY Regulations so that students receiving assistance under the New Enterprise Incentive Scheme (NEIS) will not be eligible for AUSTUDY benefits. (NEIS is the only item listed in Group AA of Schedule 1).
Subregulation 11.2 omits paragraph 22(2)(c) and inserts new paragraphs 22(2)(c), (d), (e) and (f) in the AUSTUDY Regulations. The amendment does not introduce new policy but is intended only to clarify the wording of the present provision.
Subregulation 11.3 inserts new subregulations 22(3), (4) and (5) in the AUSTUDY Regulations. These subregulations provide for changes to the present transfer arrangements between AUSTUDY and job search allowance (JSA) or new start allowance (NSA). These changes will be complemented by amendments to the Social Security Act 1991.
The Secretary to the Department of Social Security may direct persons receiving JSA or NSA to undertake courses of up to six months in length. Subregulation 22(3) provides that persons in receipt of JSA and NSA who are directed by the Secretary of the Department of Social Security to undertake a course of study six months or less in duration will not transfer to AUSTUDY but remain on JSA or NSA.
Subregulations 22(4) and (5) provides that JSA/NSA recipients who otherwise choose to do courses will be able to receive JSA/NSA for a period of up to three weeks from the start of their courses. The intention behind the period of three weeks is to allow a buffer in the transition from the Social Security payments to AUSTUDY assistance.
Subregulation 11.4 amends the notes to regulation 22 in the AUSTUDY Regulations to change the references to an 'education supplement' to 'pensioner education supplement'. This amendment is intended to avoid confusion with payments made under the AUSTUDY/ABSTUDY Supplement and is purely editorial in its effect.
Regulation 12. Regulation 23 (Excluded: (c) students with training agreements)
Subregulation 12.1 provides that regulation 23 of the AUSTUDY Regulations will be omitted. Regulation 23 provides that AUSTUDY is not payable to students who have been party to a training agreement. For example, students receiving an allowance from a State or Territory education department to undertake a teaching qualification on condition that they teach for some period following the end of their courses have not previously been entitled to receive AUSTUDY.
From 1 January 1994, students in training agreements will no longer be precluded from AUSTUDY assistance. Any money these students receive from their training agreements will be assessed under the personal income test. (Students in full year courses may receive up to $6000 in personal income in the calendar year of study without affecting their AUSTUDY entitlement, for every $2 over $6000 there is a $1 reduction in the annual AUSTUDY entitlement.)
Regulation 13. Regulation 27 (Where can secondary students study?)
Subregulation 13.1 deletes the words "or Christmas Island" from subregulation 27(2) of the AUSTUDY Regulations. Subregulation 27(2) in the AUSTUDY Regulations provides in part that, for a secondary student attending a secondary school to be eligible for AUSTUDY benefits, the school must be located in "Australia or Christmas Island".
The Acts Interpretation Act 1901 was amended so that "Australia" is defined to include the Territory of Christmas Island and the Territory of the Cocos (Keeling) Islands, but not including any other external territory. Hence, it is now unnecessary for subregulation 27(2) to refer expressly to Christmas Island and the reference will be omitted.
Regulation 14. Regulation 29 (Workload: (a) secondary students attending school)
Subregulation 14.1 omits Note 2 to regulation 29 in the AUSTUDY Regulations.
Under regulation 29, a student cannot get AUSTUDY for a certain period if his or her school reports an unapproved absence. A school can, having reported an unapproved absence to DEET, subsequently advise that the report was incorrect.
Note 2 states that "A subsequent change of mind by the school would not operate to make withheld AUSTUDY payable". This note has been interpreted as meaning that a school cannot subsequently change an unapproved absence report. The note is to be omitted to remove this confusion.
Regulation 15. Regulation 30 (Workload: (b) secondary students studying at other institutions or by correspondence)
Background
Regulation 30 of the AUSTUDY Regulations specifies the workload that amounts to full-time study for specified classes of secondary students.
Subregulation 15.1 omits subregulation 30(4) and inserts new subregulations 30(4) and (4A) in the AUSTUDY Regulations. Subregulation 30(4) clarifies subregulation 30(4) and does not introduce new policy. Subregulation 30(4A) provides for students in New South Wales undertaking special six unit secondary courses that are to be regarded as full time for AUSTUDY purposes.
Subregulation 15.2 amends subregulation 30(6) of the AUSTUDY Regulations to recognise changes to the structure of the-senior secondary years in the Australian Capital Territory.
Regulation 16. Regulation 33 (Where can tertiary students study?)
Subregulation 16.1 deletes the words "or Christmas Island" from subregulation 33(2) of the AUSTUDY Regulations. Subregulation 33(2) provides that, for a tertiary student attending a higher education institution or a TAFE institution to be eligible for AUSTUDY benefits, the institution must be located in Australia or Christmas Island.
The Acts Interpretation Act 1901 has been amended so that "Australia" is defined to include the Territory of Christmas Island and the Territory of the Cocos (Keeling) Islands, but not including any other external territory. It is now unnecessary for regulation 27 to refer expressly to Christmas Island and the reference will be omitted.
Regulation 17. Regulation 38 (Levels of tertiary courses)
Subregulations 17.1 to 17.6 make minor amendments to regulation 38 of the AUSTUDY Regulations. These amendments do not introduce new policy.
Regulation 18. Regulation 41 (Previous study: time spent on a course)
Background
In determining whether or not a student is entitled to AUSTUDY for a course, an assessment of the total amount of time the student has spent in study at the same level as the current course is necessary. AUSTUDY is not generally paid if the total duration of the student's study at the level of the course for which assistance is sought is half a year, or a year, longer than the duration of that course. The rules relating to the assessment of the time spent in previous study are called the progress rules.
Subregulation 18.1 amends subregulation 41(1) of the AUSTUDY Regulations. The amendment specifies that the provisions of 41(1) used to assess the duration of a student's study at a given level refer to study in incomplete courses. The method for assessing the duration of a student's study in completed courses is given in subregulation 18.5 below.
Subregulation 18.2 amends paragraph 41(1A)(a) of the AUSTUDY Regulations and corrects a minor drafting error. It does not involve any change in policy.
Subregulation 18.3 amends paragraph 41(1A)(b) of the AUSTUDY Regulations. Paragraph 41 (1A)(b) provides that if a student withdraws from a subject in a course, and the withdrawal from this subject is not regarded by the institution concerned as a failure, then the study time spent by the student in the subject will not be counted in assessing the duration of the student's study at that level.
Subregulation 18.4 inserts new paragraph 41(1A)(c) of the AUSTUDY Regulations. Paragraph 41 (1A)(c) provides that study towards an overseas qualification will be disregarded in the assessment of a student's AUSTUDY eligibility, whether or not the qualification was completed, unless the study leads to the completion of a qualification of the same standing as an Australian degree of Master or Doctor. The amendment extends the previous concession which disregarded only study towards incomplete overseas qualifications.
Subregulation 18.5 inserts subregulation 41(2A) in the AUSTUDY Regulations to provide that where a student has taken longer than the minimum time to complete a course, only the minimum time will be counted. For example, if the student has taken 4 years to complete an ordinary Bachelor of Science degree, only three years will be counted for the purpose of the progress rules because this is the normal minimum duration of the course. Previously, the years students actually spent in the relevant course would have been counted.
Subregulation 18.6 inserts a note following regulation 41 of the AUSTUDY Regulations to clarify the meaning of 'normal amount of full-time work' in regulation 41.
Regulation 19. Regulation 45 (Previous study: postgraduate study)
Subregulation 19.1 amends subregulation 45(1) of the AUSTUDY Regulations so that a student cannot get AUSTUDY if he or she has completed a course for the degree of Master or Doctor. Under previous policy, if a student had undertaken six months or study or more at the level of Master or Doctor then the student was permanently excluded from AUSTUDY assistance.
Regulation 20. Regulation 46 (Previous study: honours year and Master's qualifying course)
Subregulation 20.1 amends subregulation 46(2) of the AUSTUDY Regulations to clarify the meaning of 'Master's qualifying course'. The amendment does not introduce new policy.
Regulation 21. Regulation 48 (Progress: concession (b) illness and circumstances beyond control)
Subregulations 21.1 to 21.4 make minor corrections to subregulation 48 of the AUSTUDY Regulations. These amendments do not introduce new policy.
Regulation 22. Regulation 50 (Progress: concession (d) study more than 10 years ago)
Subregulation 22.1 omits regulation 50 of the AUSTUDY Regulations and inserts a new regulation 50. Regulation 50 provides that all studies undertaken more than 10 years ago for courses not subsequently completed will be disregarded for the purposes of the progress rules. Study for a course completed less than 10 years ago will be counted, as will study for courses for the completed degrees of Master or Doctor.
The amendment extends the concession given to students under the previous regulation 50 which provided that the only studies disregarded were incomplete courses undertaken more than 10 years ago.
Regulation 23. Chapter 2 (Who can get AUSTUDY?)
23.1 omits the previous heading to Part 4 of Chapter 2 of the AUSTUDY Regulations. No new policy is introduced by the amendment.
Regulation 24. Regulation 52 (Recognition of students with disabilities and students getting certain pensions)
Subregulation 24.1 omits paragraph 52(1)(c) of the AUSTUDY Regulations and inserts a new paragraph 52(1)(c). Paragraph 52(1)(c) provides that students receiving certain pensions will be given concessional treatment in terms of their study workload and the assessment of their duration of study at a given level.
Subregulation 24.2 inserts subparagraphs 52(1)(d)(iii) and (iv) in the AUSTUDY Regulations. Subparagraphs 52(1)(d)(iii) and (iv) provide that students who have a dependent child under sixteen and are receiving certain pensions will be given concessional treatment in terms of their study workload and the assessment of their duration of study at a given level.
Subregulation 24.3 amends an earlier drafting error in subregulation 52(2) of the AUSTUDY Regulations. No new policy is introduced by the amendment.
Subregulation 24.4 amends an earlier drafting error in paragraph 52(3)(a) of the AUSTUDY Regulations. No new policy is introduced by the amendment
Regulation 25. Regulation 53 (Sole parent pensioner students and students with disabilities: workload)
Subregulation 25.1 omits regulation 53 of the AUSTUDY Regulations and inserts a new regulation 53. This change involves a minor clarification of the wording of the previous regulation. No new policy is introduced by the amendment.
Regulation 26. Regulation 55 (Students with disabilities and students getting certain pensions: total length of tertiary study)
Background
The usual approach by AUSTUDY in assessing the duration of a student's study at a given level is given in the background to regulation 18 above.
Regulation 55 of the AUSTUDY Regulations sets out a more concessional approach for students with disabilities and beneficiaries of certain pensions. The concession applies from the time the student acquired the disability or began to receive the relevant pension.
The present amendment inserts a provision into the AUSTUDY Regulations so that for the time prior to the student becoming disabled or a pensioner, the duration of the student's study at a given level will be assessed according to the regime described in regulation 18 above (i.e. the students will be treated in the same way as other students for the period before becoming entitled to a concession). The amendment is beneficial because it gives the disabled student and pensioner student access to the usual concessions that would apply to other students for the period before their special circumstances came into effect.
Subregulation 26.1 omits paragraph 55(2)(a) of the AUSTUDY Regulations and inserts a new paragraph 55(2)(a). Paragraph 55(2)(a) provides that the duration of study for a student with a disability, prior to having the disability, will be assessed according to the approach used for other students given in subregulations 41 (1 A) and 41(2) of the AUSTUDY Regulations.
Subregulation 26.2 omits subparagraph 55(3)(b)(i) of the AUSTUDY Regulations and inserts a new subparagraph 55(3)(b)(i). Subparagraph 55(3)(b)(i) provides that for students receiving certain pensions, the duration of study prior to receiving these pensions will be assessed according to the approach used for other students given in subregulations 41(1A) and 41(2) of the AUSTUDY Regulations.
Regulation 27. Regulation 58 (Time limit for applying)
Subregulation 27.1 amends subregulation 58(1) of the AUSTUDY Regulations. Subregulation 58(1) provides the closing dates for lodgement of an AUSTUDY application according to the length of the course undertaken by a student. The amendment provides a minor clarification to the effect that the closing dates for lodgement refer to the year for which an application is made.
Regulation 28. Regulation 61 (What is the maximum living allowance?)
Subregulation 28.1 omits paragraph 61 (a) of the AUSTUDY Regulations and inserts a new paragraph 61 (a). The wording of paragraph 61 (a) is simplified with no substantive effect on its meaning, and the rate of living allowance to which it refers is increased from $7,980 to $8,132 by reference to the Consumer Price Index as set out in section 12ZZA of the Student Assistance Act 1973.
Subregulation 28.1 amends paragraph 61(b) of the AUSTUDY Regulations. The rate of living allowance referred to by paragraph 61(b) is increased from $6,786 to $6,917 by reference to the Consumer Price Index as set out in section 12ZZA of the Student Assistance Act 1973.
Subregulation 28.3 omits subparagraph 61(b)(i) of the AUSTUDY Regulations and inserts a new paragraph 61(b)(i). The wording of subparagraph 61(b)(i) is simplified with no substantive effect on its meaning.
Subregulation 28.4 omits paragraph 6 1 (c) of the AUSTUDY Regulations and inserts anew paragraph 61(c). The rates of living allowance referred to by paragraph 61(c) are increased by reference to the Consumer Price Index as set out in section 12ZZA of the Student Assistance Act 1973.
Regulation 29. Regulation 63 (Who gets special rate living allowance?)
Subregulation 29.1 amends subregulation 63(2) of the AUSTUDY Regulations. A higher rate of AUSTUDY living allowance, known as the special rate, is paid to some long term Social Security beneficiaries transferring to AUSTUDY. The special rate is normally paid for the duration of the student's course. The previous wording of subregulation 63(2) had been unnecessarily restrictive on the circumstances under which the special rate would continue once the student had completed or withdrawn from one course and proposed to undertake another. Subregulation 63(2) is amended so as to clarify that the special rate will continue for as long as students undertake other courses approved for AUSTUDY within 12 months of completing or withdrawing from the previous courses for which the special rate was paid.
Regulation 30. Regulation 64 (Is there additional allowance for a spouse?)
Subregulation 30.1 amends regulation 64(1) of the AUSTUDY Regulations. Regulation 64 provides the formula for calculating the amount of additional allowance payable to an eligible student in respect of a spouse. Ibis is increased by reference to consumer price index movements following the procedure set out in section 12ZZA of the Student Assistance Act 1973.
Subregulation 30.2 omits paragraph 64(1)(a) of the AUSTUDY Regulations and inserts a new paragraph 64(1)(a). New paragraph 64(1)(a) provides that a spouse in lawful custody cannot be claimed as a dependent spouse; nor can a child be claimed as a dependent child even though the student pays maintenance for the child.
Subregulation 30.3 amends subregulation 64(3) of the AUSTUDY Regulations. Subregulation 64(3) provides that the spouse income taken into account when assessing a student's entitlement to an additional allowance for a dependent spouse is the spouse's income for the purposes of the Income Tax Assessment Act 1936.
Subregulation 30.4 omits the note to regulation 64 of the AUSTUDY Regulations and does not introduce new policy.
Regulation 31. Regulation 66 (Is there a minimum rate of allowance?)
Subregulation 31.1 amends regulation 66 of the AUSTUDY Regulations. The amendment to regulation 66 is a clarification of the previous wording and does not introduce new policy.
Regulation 32. Regulation 68 (Independent student: (a) age)
Subregulation 32.1 amends regulation 68 of the AUSTUDY Regulations. Regulation 68 provides that the age for payment of the independent rate of AUSTUDY living allowance will be lowered from 24 to 23 from 1 January 1994.
Regulation 33. Regulation 75 (Independent student: (h) refugee)
Subregulation 33.1 omits subregulation 75(1) of the AUSTUDY Regulations and inserts a new subregulation 75(1). The amendment changes the citation to the Migration (1993) Regulations and does not introduce new policy.
Regulation 34. Regulation 80 (Isolated student: (c) special courses of study)
Background
Most secondary AUSTUDY students are paid at the standard rate of AUSTUDY. Some students receive the higher independent rate, free of parental income test, but subject to a spouse income test in the case of married students, because they have established their independence under regulation 67 of the AUSTUDY Regulations. Another small group of secondary students are paid at the away-from-home rate which is still subject to a parental income test but can be as high as the independent rate when parental income is low. The away-from-home rate of assistance is paid to these students to undertake the 'special courses' listed in paragraphs 80(1)(a) to (f) of the AUSTUDY Regulations.
Subregulation 34.1 omits paragraphs 80(1)(a), (b) and (f) of the AUSTUDY Regulations. Secondary students will no longer be paid at the away-from-home rate of AUSTUDY to undertake a prescribed 'special course' of the type described in existing paragraphs 80(1)(a), (b) and (f). Essentially, the secondary courses involved have a more specific focus than is usually the case at secondary level (for example, allowing students to specialise in art, music or agriculture, or to prepare for specific tertiary study). Students who are receiving AUSTUDY assistance to undertake one of these courses as at the end of 1993 will not be excluded by the proposed amendment for the duration of their current courses of study. See subregulation 57(1) below.
Regulation 35. Regulation 82 (Effect of student income-test on living allowance)
Subregulation 35.1 omits subregulation 82(3) of the AUSTUDY Regulations and inserts a new subregulation 82(3). Subregulation 82(3) provides that the income test on a student's personal income will apply over the same period as the student's eligibility for AUSTUDY assistance.
Regulation 36. Regulation 86 (What is parental income?)
Subregulation 36.1 omits subregulation 86(1) of the AUSTUDY Regulations and inserts a new subregulation 86(1). Subregulation 86(1) sets out that, in addition to a parent's taxable income, specified fringe benefits will be included in the calculation of parental income when these fringe benefits aggregate to more than $1000. Only that amount of the aggregated fringe benefits in excess of $1000 win be included in the calculation of parental income. See the new Schedule 6 at the end of these Regulations for details of the new fringe benefits policy.
Subregulation 36.2 amends subregulation 86(2) to set out what benefits comprise the non-fringe benefits element of parental income.
Subregulation 36.3 omits paragraph 86(2)(c) of the AUSTUDY Regulations and inserts a new paragraph 86(2)(c). Paragraph 86(2)(c) provides that
• income for the maintenance of a dependant or parent will be included in parental income whether received by the parent, someone on behalf of the parent, or by the dependant; and
• income for the maintenance of a dependant and received by the dependant, will also be included in parental income.
The amendment represents a clarification of the previous provision and does not introduce new policy.
Subregulation 36.4 inserts new subregulations 86(7), (8), (9) and (10) into the AUSTUDY Regulations.
Subregulation 86(7) provides that
if parental income based on the financial year and fringe benefits year ending in the year of study is at least 25% greater than the parental income based on the financial and fringe benefits years ending in the year before the year of study,
then parental income will be taken on the later financial and fringe benefits years, and the student's entitlement will be reassessed on this higher amount from 1 October to 31 December in the year of study.
Subregulation 86(8) provides that an employer statement given to the Department by a student's parent of the value of a given fringe benefit for the purposes of the Fringe Benefits Tax Assessment Act 1986 (FBTAA) will be accepted in place of the value calculated under these Regulations. This has been done to allow for instances where the value calculated under the Regulations might be higher than that calculated under the FBTAA.
Subregulation 86(9) provides that the classes of fringe benefits to be considered are: car; health insurance; housing; loans; and school fees. The detailed provisions relating to fringe benefits will be given in the new Schedule 6 (see below at the end of these Regulations).
Subregulation 86(10) provides that 'employer' will have the same meaning as that given in Schedule 6 to the AUSTUDY Regulations, and 'fringe benefits year' will mean a period starting on 1 April in a year and ending on 31 March in the following year.
Regulation 37. Regulation 87 (What are the deductions for children?)
Subregulation 37.1 amends subparagraph 87(1)(b)(ii) of the AUSTUDY Regulations. Subparagraph 87(1)(b)(ii) provides that a parent or spouse of a student may claim a deduction against parental or spouse income on account of their other dependent children. Included in the definition of a 'dependent child' is the criterion that the child is under 24 years of age. This age criterion follows from the provision given in regulation 68 of the AUSTUDY Regulations that a student is eligible to the independent rate of living allowance from the age of 24. As the age of independence will be 23 in 1994 (see regulation 32 above), the age limit for a dependent child will also be reduced to 23 from 1 January 1994.
Subregulation 37.2 omits subparagraphs 87(1)(c)(iii) and Qv) of the AUSTUDY Regulations and inserts a new subparagraph 87(1)(c)(ii). The omission of existing subparagraph 87(1)(c)(iv) reflects the removal of the bar on students subject to a training agreement also receiving AUSTUDY (see regulation 12 above). The omission of paragraph 87(1)(c)(iii) and insertion of paragraph 87(1)(c)(ii) is for clarification and has no substantive effect.
Regulation 38. Regulation 88 (How does parental income affect living allowance?)
Subregulation 38.1 amends subregulation 88(1) of the AUSTUDY Regulations. Subregulation 88(1) provides the level of parental income below which the maximum living allowance may be paid to an AUSTUDY student. The existing figure of $21,150 will be increased in line with movements in average weekly earnings to $21,300.
Subregulation 38.2 amends subregulation 88(2) of the AUSTUDY Regulations. Subregulation 88(2) provides the rate of abatement on the AUSTUDY living allowance when parental income exceeds the figure of $21,300 (see subregulation 38.1 above).
Regulation 39. Regulation 90 (Concession to the parental income test: (b) fall in income)
Subregulation 39.1 omits subregulation 90(1) of the AUSTUDY Regulations and inserts a new subregulation 90(1). A minor editorial change is made to subregulation 90(1) following from the proposed new definition of parental income to include fringe benefits (see regulation 36 above, and Schedule 6 at the end of these Regulations).
Regulation 40. Regulation 91 (Concession to the parental income test: (c) pensions and allowances)
Subregulation 40.1 omits paragraph 91(1)(c) of the AUSTUDY Regulations and inserts a new paragraph 91(1)(c). A minor change is made to paragraph 91(1)(c) to update a reference to the Farm Household Support Act 1992. No new policy is introduced by the amendment.
Subregulation 40.2 inserts a new subregulation 91(1 A) into the AUSTUDY Regulations. Subregulation 91(1A) provides that the income test on a student's parents will be waived while at least one of the parents holds a current Health Care Card issued under the National Health Act 1953. The assets test will still apply. A parallel amendment is proposed to the spouse income test (see subregulation 45.3 below).
Regulation 41. Regulation 93 (When does the spouse income test apply?)
Subregulation 41.1 omits paragraph 93(2)(a) of the AUSTUDY Regulations and inserts a new paragraph 93(2)(a). Paragraph 93(2)(a) provides a minor clarification of the wording and does not introduce new policy.
Regulation 42. Regulation 94 (What is the spouse's income?)
Subregulation 42.1 omits subregulation 94(1) of the AUSTUDY Regulations and inserts a new subregulation 94(1). Subregulation 94(1) clarifies what benefits comprise the non-fringe benefits elements of a spouse's income, and provides that specified fringe benefits will be included to the extent that the total of these aggregate to more than $1,000. There is also provision for spouse income to be based on the income tax and fringe benefits years ending in the year before the year of study, or ending in the year of study (see subregulations 42.2 and 44 below).
Subregulation 42.2 inserts new subregulations 94(1A), (1B) and (1C) into the AUSTUDY Regulations. Subregulation 94(1A) provides that
if spouse income based on the financial year and fringe benefits year ending in the year of study is at least 25% greater than the spouse income based on the financial and fringe benefits years ending in the year before the year of study,
then spouse income will based on the later financial and fringe benefits years, and the student's entitlement will be reassessed on this higher amount from 1 October to 31 December in the year of study.
Subregulation 94(1B) provides that an employer statement given to the Department by a student's spouse of the value of a given fringe benefit for the purposes of the Fringe Benefits Tax Assessment Act 1986 (FBTAA) will be accepted in place of the value calculated under these Regulations. This has been done to allow for instances where the value calculated under the Regulations might be higher than that calculated under the FBTAA.
Subregulation 94(1C) provides that the classes of fringe benefits to be included in the calculation of spouse income are: car; health insurance; housing; loans; and school fees.
The detailed provisions relating to fringe benefits will be given in the new Schedule 6 (see below at the end of these Regulations).
Regulation 43. Regulation 95 (How does the spouse's income affect living allowance?)
Subregulation 43.1 amends subregulations 95(1)and (2) of the AUSTUDY Regulations. Subregulation 95(1) sets the level of spouse income below which the maximum living allowance may be paid to an AUSTUDY student. The existing figure of $13,300 is increased in line with movements in average weekly earnings to $13,400. Subregulation 95(2) provides the rate of abatement on the AUSTUDY living allowance when spouse income exceeds the figure of $13,400.
Regulation 44. Regulation 96 (Concession to the spouse's income test: (b) fall in income)
Subregulation 44.1 omits subregulation 96(1) in the AUSTUDY Regulations and inserts a new subregulation 96(1). Subregulation 96(1) provides for a concession when there has been a drop in spouse income from the previous year to the year of study. This concession was previously in place but has been modified to take into account the inclusion of fringe benefits in the definition of spouse income. No new policy is introduced aside from the inclusion of fringe benefits.
Regulation 45. Regulation 97 (Concession to the Spouse's income test: (b) pensions and allowances)
Subregulation 45.1 omits paragraph 97(a) from the AUSTUDY Regulations and inserts a new paragraph 97(a). The New Enterprise Incentive Scheme (NEIS) is intended to help unemployed people set up commercially viable self-employment ventures. It is the only item currently listed in Group AA of Schedule 1 to the AUSTUDY Regulations. Paragraph 97 (a) provides that if at least one of a student's parents receives NEIS then the parental income and assets tests will be waived while NEIS is received.
Subregulation 45.2 omits paragraph 97(ba) of the AUSTUDY Regulations and inserts a new paragraph 97(ba). Paragraph 97(ba) updates a reference to the Farm Household Support Act 1992. No new policy is introduced by the amendment.
Subregulation 45.3 inserts new subregulation 97(1A) into the AUSTUDY Regulations. Subregulation 97(1A) provides that the income test on a student's spouse will be waived while the spouse holds a current Health Care Card issued under the National Health Act 1953. The assets test will still apply. A parallel amendment is proposed to the parental income test (see subregulation 40.2 above).
Regulation 46. Regulation 98 (Can students with pensions get AUSTUDY?)
Subregulation 46(1) amends subregulation 98(1) of the AUSTUDY Regulations. The New Enterprise Incentive Scheme (NEIS) is intended to help unemployed people set up commercially viable self-employment ventures. It is the only item listed in Group AA of Schedule 1 of the AUSTUDY Regulations. The effect of this amendment will be that students receiving NEIS will not be eligible also to receive payment from AUSTUDY.
Regulation 47. Regulation 99 (Who can get the fares allowance?)
Background
Some tertiary students who must live away from their parents or spouses to attend their institutions during the academic year are eligible to receive a fares allowance. The fares allowance is essentially intended to allow students to travel to their institutions at the beginning of the year and return home again at the end of the year. Students who elect to trade in all of their AUSTUDY grant in return for a financial supplement under Part 4A of the Student Assistance Act 1973 have been barred from receiving fares allowance (students who trade in part or all of their AUSTUDY grant in exchange for a financial supplement are known as category 1 students). This policy will change from 1 January 1994 and these students will no longer be precluded from fares assistance.
Subregulation 47.1 omits paragraph 99(1)(b) of the AUSTUDY Regulations and inserts a new paragraph 99(1)(b). Paragraph 99(1)(b) provides that fares allowance is payable to students getting an AUSTUDY living allowance, pensioner education supplement or financial supplement (category 1 students).
Subregulation 47.2 omits paragraph 99(1A)(c) of the AUSTUDY Regulations and inserts a new paragraph 99(1A)(c). Paragraph 99(1A)(c) provides a parallel provision to that given in subregulation 47.1 above.
Subregulation 47.3 inserts a new subregulation 99(4) into the AUSTUDY Regulations. Subregulation 99(4) provides that 'category 1 student' will have the same meaning as in the AUSTUDY/ABSTUDY Supplement Regulations.
Regulation 48. Regulation 101 (How much is the fares allowance?)
Background
Subregulation 101 (4) of the AUSTUDY Regulations provides the rates which may be paid to students as fares allowance for travel by taxi, paragraph 101 (4)(a), or car, paragraph 101 (4)(b). These rates are in line with the amounts payable within the public service for work related travel by public servants.
Subregulations 48.1 to 48.5 amend subregulation 101(4) to vary the applicable rates.
Subregulation 48.6 inserts a new subregulation 101(6) into the AUSTUDY Regulations. Subregulation 101(6) defines 'taxi' for the purposes of the AUSTUDY Regulations.
Regulation 49. Regulation 109 (What changes in circumstances must the Department be told about?)
Subregulation 49.1 omits subparagraph 109(1)(a)(vii) of the AUSTUDY Regulations. As students will no longer be precluded from the receipt of AUSTUDY if they are party to a training agreement, they will no longer be required to advise the Department in relation to this matter (see regulation 12 above).
Subparagraph 49.2 inserts a new paragraph 109(1)(d) into the AUSTUDY Regulations. The new paragraph 109(1)(d) will require students to tell the Department within seven days if their parental or spouse income has increased 25% in the current year over its value in the previous year. This requirement follows from the subregulations 42.2 and 36.4 above.
Regulation 50. Regulation 110 (How is the Department to be told about changes in circumstances?)
Subregulation 50.1 amends regulation 110 of the AUSTUDY Regulations. Regulation 110 provides a minor clarification of wording and does not introduce new policy.
Regulation 51. Regulation 111B (Exemption from requirement to provide tax rile number)
Background
Subsection 44A(1) of the Student Assistance Act 1973 requires, in part, that a student must provide a tax file number before payment of AUSTUDY may be made to the student. Subsection 44A(4) allows that the AUSTUDY Regulations may prescribe circumstances in which AUSTUDY may be paid even though a tax file number has not been provided.
Subregulation 51.1 omits paragraph 111B(1)(e) of the AUSTUDY Regulations and inserts a new paragraph 111B(1)(e). The effect of new paragraph 111B(1)(e) is that a benefit or financial benefit may be paid even though a tax file number has not been given in accordance with subsection 44A(1) of the Student Assistance Act 1973 where, within the 6 months preceding the application for AUSTUDY, the student has lodged with the Department an application for, but has not received, a tax file number.
Subregulation 51.2 to 51.6 amend minor drafting errors in subregulation 111B(2) of the AUSTUDY Regulations and do not introduce new policy.
Regulation 52. Regulation 113 (Definitions)
Subregulation 52.1 updates the index to the Austudy Regulations.
Regulation 53. Schedule 1 (Pensions and allowances)
Subregulation 53.1 amends item 2 of Group A in Schedule 1 to the AUSTUDY Regulations. No new policy is introduced.
Subregulation 53.2 amends item 7 of Group A in Schedule 1 to the AUSTUDY Regulations. No new policy is introduced.
Subregulation 53.3 inserts three new allowances into Group A of Schedule 1 to the AUSTUDY Regulations. The mature age allowance and the mature age partner's allowance are paid by the Department of Social Security. These payments are closely analogous to the aged pension and are directed at older long term unemployed people.
Their addition to Group A of Schedule 1 will mean that recipients of the new allowances will be treated in the same way as aged pension recipients: they will not be able to receive payment from AUSTUDY in their own right but if the parent or spouse of a student receives the allowance the spouse/parental income and assets tests will be suspended during the period of receipt. The addition of the rehabilitation allowance in Group A corrects an earlier error which had caused it be to removed, and does not represent new policy.
Subregulations 53.4 to 53.6 update the nomenclature of several items of Group B in Schedule 1 to the AUSTUDY Regulations. No new policy is introduced.
Subregulation 53.7 amends Group B in Schedule 1 to the AUSTUDY Regulations. The amendment will allow a person receiving payment of special benefit from the Department of Social Security also to receive a pensioner education supplement from AUSTUDY to undertake approved study under subregulation 98(2) of the AUSTUDY Regulations. This is primarily aimed at assisting a number of special benefit recipients who are also studying and would receive a sole parent pension (which already allows recipients to claim a pensioner education supplement from AUSTUDY) but for the fact that they do not meet the residence requirements for that pension.
Regulation 54. Schedule 2 (Institutions that are to be treated as TAFE institutions)
Subregulations 54.1 to 54.14 amend the list of private education providers listed in Schedule 2 to the AUSTUDY Regulations. Schedule 2 lists private providers approved to offer courses at TAFE level for which AUSTUDY is payable.
Regulation 55. Schedule 3 (Special courses)
Subregulation 55.1 omits Schedule 3 to the AUSTUDY Regulations. The omission of this schedule follows from the decision that secondary students will no longer be able to receive the away-from-home rate to live away from home in order to undertake certain special courses. See regulation 34 above for details of this change.
Regulation 56. New Schedule 6
Subregulation 56.1 inserts new Schedule 6 into the AUSTUDY Regulations.
Regulation 57. Transitional provision
Subregulation 57.1 applies a transitional provision to the AUSTUDY Regulations to allow secondary students currently being assisted to do 'special courses' formerly listed in Schedule 3 to receive the away-from-home rate until the end of their courses. See regulation 34 above for details of the removal of the 'special course' criteria.
Schedule 6: Fringe Benefits
Background
These provisions will ensure that certain employer-provided fringe benefits are treated as income when applying the spouse and parental income tests under AUSTUDY.
Some people receive a benefit from their employers such as a car, housing, payment of school fees and health insurance or loans at concessional interest rates. These employer-provided fringe benefits ('fringe benefits') are not subject to income tax because the definition of 'taxable income' in the Income Tax Assessment Act 1936 (ITAA) does not include the value of such benefits. Instead, the employer is subject to fringe benefits tax under the Fringe Benefits Tax Assessment Act 1986 (FBTAA).
The AUSTUDY entitlement of students assessed at the standard or away-from-home rates is currently income tested against taxable parental income in the financial year ending in the calendar year before that for which assistance is sought (regulation 86 of the AUSTUDY Regulations).
In a parallel provision, the entitlement of married students is assessed against the taxable income of their spouses in the financial year ending in die calendar year before that for which assistance is sought (regulation 94 of the AUSTUDY Regulations).
Under some circumstances it is also possible to use the taxable income of a parent or spouse for the financial year ending in the year of study for which assistance is sought (regulations 90 and 96 of the AUSTUDY Regulations).
Because parental and spouse income for AUSTUDY purposes has been tied in the past to taxable income as defined under the ITAA, fringes benefits received by a parent or spouse have not been counted in assessing a student's entitlement to AUSTUDY benefits.
Certain categories of fringe benefits will be included under the spouse and parental income tests from 1 January 1994. These are:
• motor vehicles;
• low interest loans;
• housing benefits;
• school fees; and
• health insurance.
These have been chosen because they are common fringe benefit types and relatively simple in terms of the information clients need to provide for AUSTUDY assessment purposes.
The total amount received by a person from all the above fringe benefits will be calculated for the relevant fringe benefits year. If that total amount is $1000 or less, it will not be included for the purposes of the parental or spouse income tests; if it is over $1000, only that amount in excess of $1000 will be included. For example, if the aggregate of all fringe benefits received by a person from all of the above five identified fringe benefit categories was $1200, $200 would be included in the appropriate calculation of parental or spouse income as fringe benefit income. If the aggregate amount was $1000, nothing would be included as fringe benefit income. In the case of parental income, the $1000 cut-off point will apply separately to each parent.
Part 1 - Preliminary
Part 1 of Schedule 6 to the AUSTUDY Regulations deals with some common definitions used within the Schedule and the regulations dealing with fringe benefits.
Item 1 provides a number of definitions used in the fringe benefits provisions. The key definitions relate to 'employee' and 'employer'.
'Employee' means someone who is an employee within the ordinary meaning of the word including someone who holds or performs duties of an appointment, office or position under the Commonwealth Constitution or a law of the Commonwealth, State or Territory, or someone who is a public servant for the Commonwealth Government or a State or Territory Government, including a member of the police or defence forces or a member of Parliament.
'Employer' means someone who pays or is liable to pay salary or wages to an employee. This includes the Commonwealth, State or Territory or an authority of such.
Foreign currency rates to be used in calculations
If someone is outside Australia and is provided with an assessable benefit, this will still be counted. In many cases the benefit will be provided in a foreign currency. For example, a diplomat posted to the USA who is provided with private health insurance in American dollars.
Item 2(1) provides that if it is necessary to work out an amount or value and it is expressed in a foreign currency, then the market exchange rate for 1 July in the relevant fringe benefits year is used.
Item 2(2) provides that if there is no exchange rate on that day (eg a national public holiday) the rate to be used is the rate applicable on the last working day immediately before 1 July.
Part 2 - Car Benefits
Division 1 - What is a Car benefit?
Part 2 of Schedule 6 to the AUSTUDY Regulations deals with defining key terms for car fringe benefits, what constitutes a car fringe benefit and the calculation of the value of a car fringe benefit.
Item 3 provides a number of definitions for use in determining a car fringe benefit. The key definitions are 'arrangement', 'associate', and 'car'.
'Arrangement' means any agreement, arrangement understanding, promise or undertaking, express or implied, whether or not enforceable or intended to be enforceable by legal proceedings, and any scheme, plan, proposal, action, course of action or conduct, whether unilateral or otherwise.
'Associate' has the same meaning as in the FBTAA.
The definitions of associate and arrangement are intended to prevent evasion. They are meant to stop either the employer or the employee using a third person or any legal mechanism to create the impression that a fringe benefit was not provided by an employer or provided to the employee when in fact it was provided.
'Car' means a motor vehicle (eg a truck, four wheel drive, motor car, station wagon, panel van, utility truck) that is a road vehicle designed to carry a load of less than one tonne or fewer than nine passengers but not including a motor cycle or a vehicle similar to a motor cycle.
Car benefits
Item 4(1) sets out when a person is taken to have a car benefit. An employee is taken to have a car benefit when an employer or associate of the employer ('provider') makes a car available to an employee for private use (whether or not the employee actually uses the car at a particular time). This provision is drafted to prevent evasion so that provider and employee also includes an associate of either.
Item 4(2) provides that an employee is taken to have a car available for private use when the employer has a car garaged or kept at or near a place of residence of the employee.
Item 4(3) provides that when a car is held by an employer but not at the employer's business premises, and the employee is either entitled to use the car privately or is not performing the duties but has custody or control of the car, then the car is taken to be available for private use by the employee.
Item 4(4) provides that item 4(3) still applies if there is a prohibition on private use of the car that is not consistently enforced.
Item 4(5) deals with a car that is let on hire purchase and provides that it is taken to be owned by the person from the day the car was hired.
Item 4(6) provides that a taxi let on hire to the provider is not a car, nor is it a car that is let continuously or under an agreement for intermittent use on an hourly, daily, weekly or other short-term basis.
Item 4(7) provides that paragraph (b) of item 4(6) does not apply if the car has been, or can reasonably be expected to be, on hire under successive agreements of a kind resulting in 'substantial continuity of the hiring of the car'.
Exempt car benefits
Item 5(1) provides that if a taxi, panel van, utility truck or other road vehicle designed to carry a load of less than one tonne (other than a vehicle designed for carrying passengers) is provided in respect of employment, and the only private use by the employee is either for work-related travel or minor, infrequent or irregular, private travel, then it is exempt.
Item 5(2) provides that a car is exempt for the time it is left unregistered.
Division 3 - value of a car benefit
Method of valuing car fringe benefits
Item 6(1) provides how to value a car fringe benefit. This value will apply unless the student's parent or spouse provides an employer statement of the value of the car as a fringe benefit under the FBTAA (see subregulations 36.4 and 42.2 above). If such a statement is given then the value of the car for AUSTUDY purposes will be taken to be the value of the car as a fringe benefit under the FBTAA.
The table given in item 6(1) is in three parts (A, B and C) and a different part of the table will be used depending on the engine size of the car in question. The greater the engine size of the car, the greater will be the value of the car as a fringe benefit. Within each of the three parts of the table a dollar value for the car fringe benefit is given for the period of use of the car depending on the car's age and the number of months the car was used by the person in the relevant fringe benefits tax year.
The table assumes all employees make a contribution towards the running costs of a car and incorporates a standard value for this. Consequently, there is no need for an employee to substantiate and claim contributions.
In some cases, the parents or spouse of a student will be assessed under regulations 90 and 96 of the AUSTUDY Regulations on their income in the financial year and fringe benefits year ending in the year of study. In these cases the table may be used to give an estimate of the value of the car fringe benefit for the relevant fringe benefits year. If the person had or will have more than one car in the tax year, the table will be used to produce two different figures that will be added to give the total value of the person's car benefit for the relevant fringe benefits tax year.
There is one method statement that applies to all three parts of the table. It has three steps. Steps 1 and 2 take the reader to the correct part and row of the table depending on the age and engine size of the car. A calculation is then made of the number of complete months in the relevant fringe benefits year the car was available for the person's use. The person then goes to the column of the table that corresponds to the correct number of months. The dollar figure found there represents the value of the car fringe benefit for the period of use (step 3).
Item 6(2) makes special provision for members of a couple. If the person has a partner, and the person and partner receive a car fringe benefit for the same car over the same period, then the value produced by the table in the calculation of the car fringe benefit is halved. In this way the person and partner share the value of the fringe benefit just as they have shared in the use of the car, and the possibility of double counting is removed.
Part 3 - Health Insurance Benefits
Division 1 - What is a Health Insurance Benefit?
Item 7 provides that a person (the 'recipient') has a health insurance benefit if an amount is paid to the recipient or the fund for the cost of health insurance and the insurance covers:
• the recipient; or
• the recipient's partner; or
• a dependent of the recipient or the recipient's partner.
Division 2 - Value of a Health Insurance Benefit.
Item 8 provides that the value of the health insurance fringe benefit will equal the amount of money paid as health insurance.
Part 4 - Housing Benefits
Division 1 - What is a housing benefit?
Item 9 sets out the definitions used in determining a housing fringe benefit. The key definitions of item 9 are 'census population', 'eligible urban area', 'housing right', ' unit of accommodation', and 'urban centre'.
'Census population' in relation to an urban area means the census count on an actual location basis as published by the Australian Statistician on 30 June 1981 in the report 'Persons and Dwellings in Local Government Areas and Urban Centre'.
'Eligible urban area' means an 'urban centre' in Zone A or B as specified in Schedule 2 to the Income Tax Assessment Act 1936 with a census population of 28,000 or more, or not located in Zone A or B but with a population of 14,000 or more.
'Urban centre' is a location called an 'urban centre' or 'bounded locality' in the results of the 'Census of Population and Housing' taken by the Australian Statistician on 30 June 1981 and published by in the report called 'Persons and Dwellings in Local Government Areas and Urban Centre'.
The definitions of 'census population', 'urban centre' and 'eligible urban area' are needed when valuing housing benefits. Basically, if a unit of accommodation is in a 'special housing location' (remote area) then it is given a more favourable treatment. A 'special housing location' is either an 'urban centre' (town) that is in a particular location and of a particular population size; or somewhere that is a certain distance from an 'eligible urban area'.
'Housing right' in relation to a person, means a lease or licence granted to the person to occupy or use a 'unit of accommodation' in so far as that lease or licence exists at a time when the unit of accommodation is the person's usual place of residence.
'Unit of accommodation' includes a house, flat, home unit, caravan or other mobile home; or accommodation in a house, flat, home unit, hotel, hostel, motel, guesthouse, bunkbouse or any living quarters, ship, vessel, or floating structure.
Housing benefits
Item 10 provides that a person has a housing benefit when a 'housing right' is granted to the person.
Division 2 - Exempt housing benefits
Item 11 provides that certain live-in residential care workers are exempt. A residential care worker is someone whose job is caring for mature or disadvantaged persons. If the care worker is employed either by a government body, religious institution or non-profit company which provides care for those people, and the worker lives in 'residential premises' provided by his/her employer because it is necessary to do so to care for those people, then the housing benefit the person receives will be exempt. 'Residential premises' is defined to mean a house or hostel used exclusively to provide accommodation for mature or disadvantaged persons.
Division 3 - Value of a Housing Benefit
Method of valuing housing benefits
Item 12(1) provides how to value a housing fringe benefit Item 12(1) will be used in all cases unless the parent or spouse of the student provides an employer statement of the value of the housing fringe benefit under the FBTAA as allowed by subregulations 36.4 (parent) and 42.2 (spouse). Item 12(1) contains the method statement for using the table in item 12(2).
The method statement contains six steps. Step 1 tells the reader which row of the table to go to depending on the location of the unit of accommodation. If a unit of accommodation is in Australia then it could be either in a metropolitan, non-metropolitan or special housing location. There is a separate weekly market rent for units of accommodation outside Australia. Step 2 provides which column to go to depending on the type of unit of accommodation and to obtain a dollar figure called the weekly market rent. The type of unit of accommodation also depends on the number of bedrooms that it has.
The weekly market rent figure is then multiplied by the number of complete weeks in the appropriate fringe benefits tax year that the unit of accommodation was or will be available to the person. This is called the provisional value of the housing benefit (steps 3 and 4). Finally, the total of the rent paid by the person during the year is calculated and deducted from the provisional value to give the value of the housing fringe benefit (steps 5 and 6).
A person's contributions towards rent will be deductible on a dollar for dollar basis. There is no maximum limit. However, if by any chance the person's contributions exceeded the provisional value of the benefit, any nominal loss will not be able to be offset against housing or other fringe benefits. Rent contributions will only be deductible if the person satisfies the authorised person that the amount was contributed and was a contribution towards rent. This means that the person must produce written evidence of the amount contributed if called on to do so. Other types of contribution to, or expenditure on, housing would not be deductible.
Item 12(2) contains the table referenced by item 12(1).
Item 12(3) applies to single persons and couples. It provides that if a person is single, then the allowable rent contribution is the amount the person spent on rent. If the person is a member of a couple then the allowable contribution is the amount spent by the person and his/her partner on rent. This prevents the double counting of the rent contribution.
Item 12(4) provides that if a couple share the same unit of accommodation, then in working out the fringe benefit value in respect of each person, half of the total rent value and rent contribution is attributed to each party. This prevents the couple from double counting their rent contribution; it also prevents the housing benefit from being counted twice.
Items 12(5) to 12(8) deal with how a unit of accommodation is determined to be in a metropolitan, non-metropolitan or special housing location.
Item 12(5) provides that Canberra and the capital of the each of the States and the Northern Territory will be metropolitan locations.
Item 12(6) provides that a unit of accommodation will be in a non-metropolitan location if it is in Australia, is not in a metropolitan location and is not in a special housing location.
Item 12(7) defines what will be a special housing location. This is done by reference to Schedule 2 of the ITAA. Essentially, a special housing location is a remote urban centre given in Schedule 2 with a population of less than 28,000; or, if not given in Schedule 2, an urban centre with a population of less than 14,000; or, is at least 40 kilometres from the nearest eligible urban area with a census population of less than 130,000; or is at least 100 kilometres from the nearest eligible urban area with a census population of more than 130,000.
Item 12(8) sets out that in measuring distances between the location of a unit of accommodation and an eligible urban area, the shortest practical route from the centre point of the eligible urban area is to be used.
Part 5 - Loan Benefits
Division 1 - What is a loan benefit?
Item 13 sets out the basic definitions used in Part 5 of Schedule 6. The most important definition of these is that of a 'loan' which has been broadly defined to include any transaction that gives effect to an advance of money.
Item 14(1) provides that when someone (the 'provider') makes a loan to another person (the 'recipient') then the making of the loan is taken to be a loan benefit.
Item 14(2) deals with the late payment of a debt that gives rise to a 'notional loan'. It provides that if someone (the 'debtor') is supposed to pay an amount (the 'principal') to another (the 'creditor') and the amount is not paid when it should be, then the debtor is taken to have a loan from the time it should be paid and the amount of the loan is the amount unpaid. The interest rate on that loan is either the amount specified under the loan agreement or nil.
Item 14(3) operates in conjunction with item 14(4). Item 14(3) provides that a loan is a deferred interest loan if the rate of interest payable on the loan exceeds nil.
Item 14(4) provides when a loan is not a 'deferred interest loan'. It is not a deferred interest loan if.
• the whole of the interest on the loan is due for payment within 6 months after the loan is made; or
• the interest is payable by instalments, the interval between instalments does not exceed 6 months and the first instalment is payable within 6 months after the loan is made.
Item 14(5) provides that if a person (the 'provider') makes a deferred interest loan to another (the 'recipient') then:
• the provider is deemed to have made a notional loan to the recipient starting 6 months after the day when the loan was made and each subsequent period of 6 months (item 14(5)(a));
• the amount of the loan is the difference between the accrued interest on the loan and the amount of interest (if any) paid before the end of the period.
If any part of the accrued interest becomes payable or is paid after the time when the notional loan is taken to have been made, the notional loan is reduced accordingly and the notional loan is taken to have been made at a nil rate of interest.
Item 14(6) provides that item 14(5)(a) only applies if the recipient is under an obligation during the whole period to repay the whole or part of the principal loan.
Item 14(7) provides that if no interest is payable in respect of the loan, a nil rate of interest is payable.
Division 2 - Exempt loan benefits
Exempt loan benefits
Division 2 of Part 5 of Schedule 6 provides which loan benefits are exempt.
Item 15(1) basically provides that a loan made by a financial institution under a written agreement at a fixed market rate of interest is exempt if it is at a rate that would be available to a member of the public.
Item 15(2) provides that if a loan is made by a financial institution and the interest rate is variable but it does not vary below the market rate of interest for the same kind of loan available to a member of the public, then it is exempt.
Item 15(3) provides that loans made in respect of employment for the 'sole purpose' of meeting employment related expenses are exempt, provided the amount of the loan does not substantially exceed the amount it would be reasonable to spend on work related expenses and there is a mechanism by which the employee is required to pay back the money not spent on work expenses at 6 month intervals.
Item 15(4) deals with some loans made in respect of employment for certain accommodation expenses such as rental bond or a security deposit for electricity, gas or telephone. Such loans will be exempt provided they must be repaid within 12 months from the day the loan is made.
Division 3 - Value of a loan benefit
Method of valuing loan benefits
Division 3 of Part 5 of Schedule 6 to the AUSTUDY Regulations provides how the value of a loan benefit is to be worked out. It is worked out in accordance with the method statement in item 16 unless the parent or spouse of the student provide an employer statement of the value of the loan under the FBTAA (see subregulations 36.4 and 42.2 above).
Item 16(1) sets out the method statement. Basically, loans are valued as follows. They are divided into two types, housing and non-housing (step 1). The legislation then sets a 'notional rate' of interest for each type of loan for each fringe benefits tax year. For the fringe benefits tax year beginning 1 April 1992 it will be 11% for housing loans and 14.75% for other loans (item 16(2)). For the fringe benefits tax year beginning 1 April 1993 - 9.9% for housing loans and 12.92% for other loans (item 16(3)). A comparison is then made between the actual rate of interest charged in respect of the loan on 1 April in the appropriate fringe benefits tax year and the notional rate applicable to that type of loan (steps 2 and 3).
If the actual rate exceeds the notional rate, then a market rate of interest is being charged and the loan is valued at nil (steps 4 and 5). Giving the loan a nil value means nothing would be added to the person's income for that loan and stops a person from getting a notional loss which can be offset against other income.
If the actual rate is less than the notional rate, then the person is enjoying a benefit, and the actual rate is deducted from the notional rate to produce the applicable rate of interest (step 6).
The amount of the loan outstanding is then ascertained (step 7) and this amount is multiplied by the applicable rate of interest to get the interim value of the loan (step 8). The interim value is then multiplied by the number of complete weeks in the relevant fringe benefits tax year the person had (or will have) the loan (steps 8-10). This gives the value of the loan benefit (step 11).
Item 16(4) provides how to work out what the actual rate of interest is in certain circumstances. This deals with cases where someone takes out a loan half way through a year. If the person had the loan at the beginning of the year, the actual rate is that applying on 1 April in the fringe benefits tax year. Otherwise it is the rate payable when the loan starts.
Item 16(5) also deals with loans received part way through the year. It provides that if the loan starts after 1 April in the relevant fringe benefits year, the amount of the loan that is outstanding is the amount outstanding on the day on which the loan starts. In any other case, the amount of the loan that is outstanding is the amount outstanding on 1 April.
Item 16(6) deals with a couple sharing the same benefit. An example could be where a couple, who work for the same employer, are provided with a loan to buy a house and the loan is taken out jointly. Once again, the value of the benefit would be divided equally to prevent double counting.
What is a housing loan?
Item 17 sets out the criteria for a loan used to acquire a 'relevant interest' in a dwelling to be considered a housing loan.
What is a relevant interest?
Items 18(1), (2), (3), (4), (5) and (6) define what is meant by a person acquiring a 'relevant interest'.
Part 6 - School Fee Benefit
Division 1 - What is a School fee benefit?
Part 6 of Schedule 6 to the AUSTUDY Regulations contains the general provisions for a school fee fringe benefit
Item 19 defines 'school' to mean a school, college or other educational institution that provides primary or secondary level education.
Item 20 provides that a school fee benefit covers payments made towards books, tuition or equipment.
Item 21 provides that the value of a school fringe benefit is the amount of the payment made towards the benefit.