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AUSTUDY REGULATIONS (AMENDMENT) 1998 NO. 86
EXPLANATORY STATEMENTStatutory Rules 1998 No. 86
Issued by the authority of the Minister for Schools, Vocational Education and Training
Subject: Student and Youth Assistance Act 1973
AUSTUDY Regulations (Amendment)
The Student and Youth Assistance Act 1973 (the Act) provides the legislative authority for the AUSTUDY Scheme. Section 56 of the Act provides that the Governor-General may make regulations for the purposes of the Act. OUTLINE OF REGULATIONS The amendments to the AUSTUDY Regulations (the Regulations):
* amend the Actual Means Test (AMT) provisions to extend the current actual means concession to take into account additional circumstances and clarify the treatment of business related expenditure and nontaxable compensation payments in determining actual means (regulations 3 to 10 and 12 to 19);
* update the fares allowance rates for travel by motor vehicle other than a taxi (regulation 25);
* reflect the Commonwealth Services Delivery Agency's role in delivering AUSTUDY (regulation 27); and
* make a number of minor changes to clarify provisions or correct drafting errors (regulations 11, 20-24 and 26). Actual Means Test Current actual means concession
The actual means of a designated person is taken to be the amount that equates to total expenditure by, and savings of, the person and each member of his or her family in the last financial year before the year of study. A concession is available to enable actual means to be determined for the financial year ending in the year of study if there has been a substantial fall in the person's actual means due to circumstances beyond his or her control and the reduced amount is expected to last for at least two years. The concession is extended to include circumstances where a designated parent, spouse or student is no longer in an AMT category or a designated parent, spouse, student or a family member decides to undertake full-time study. Business expenditure
The Regulations provide for expenditure from the income of any business of a designated person or a family member that equates to the amount that was or is deductible under the Income Tax Assessment Act 1936 or the Income Tax Assessment Act 1997 because the expenditure was necessarily incurred in carrying on the business to be excluded from the designated person's actual means. The amendment clarifies that expenditure of money from any source, not limited to income of a business, is excluded from a designated person's actual means if the expenditure was or is tax deductible because it was necessarily incurred in carrying on a business.
Non-taxable compensation payments
A non-taxable compensation payment (such as a worker's compensation payment or victim of crime compensation payment) is not included in parent, spouse or student taxable income for the purposes of the AUSTUDY parental and spouse income tests. The amendment excludes non-taxable lump sum compensation payments from the actual means of a person subject to the AMT. This ensures that AMT clients are treated in the same manner as PAYE clients subject to the income tests.
Fares allowances
Fares allowance rates for travel by motor vehicle are changed in accordance with motor vehicle allowance rates determined by the Department of Workplace Relations and Small Business. The amendment updates the fares allowance rates to reflect the motor vehicle allowance rates set on 25 December 1997.
Commonwealth Services Delivery Agency
The Commonwealth Services Delivery Agency, known as Centrelink, was established on 1 July 1997. The Agency is responsible for the delivery of a range of Commonwealth services. The amendments insert references to the Agency and the Chief Executive Officer of the Agency in the Regulations to reflect the Agency's role in delivering AUSTUDY.
COMMENCEMENT OF THESE REGULATIONS
Regulation 1 provides that the regulations, except regulations 5, 9, 14, 18, 20, 22 and 24 commenced on 1 January 1998. As these amendments do not disadvantage clients, their retrospective commencement does not contravene subsection 48(2) of the Acts Interpretation Act 1901. Regulations 5, 9, 14, 18, 20, 22 and 24 commenced on gazettal.
The Attachment contains more details about the amendments.
ATTACHMENT
DETAILS OF THE AUSTUDY REGULATIONS (AMENDMENT)
Regulation 1 Commencement
Subregulation 1.1 provides that these regulations (except regulations 5, 9, 14, 18, 20, 22 and 24) commenced on 1 January 1998.
Subregulation 1.2 provides that regulations 5, 9, 14, 18, 20, 22 and 24 commenced on gazettal.
Regulation 2 Amendment
Regulation 2 provides that the AUSTUDY Regulations are amended as set out in these regulations.
ACTUAL MEANS TEST
Current actual means concession
Regulation 3 Regulation 12M (Actual means: designated parents)
Regulation 4 New regulation 12MA
Regulation 5 New regulation 12MB
Regulation 7 Regulation 12T (Actual means: designated spouses)
Regulation 8 New regulation 12TA
Regulation 9 New regulation 12TB
Regulation 12 Regulation 12Z (Actual means: designated student with a spouse)
Regulation 13 New regulation 12ZAA
Regulation 14 New regulation 12ZAB
Regulation 16 Regulation 12ZE (Actual means: designated students without a spouse)
Regulation 17 New regulation 12ZEA
Regulation 18 New regulation 12ZEB
Background
Division 1B provides for the Actual Means Test (AMT). Subregulation 12M(1) provides that the actual means of a designated parent is taken to be the amount that equates to total expenditure by, and savings of, the parent and each member of his or her family in the last financial year before the year of study. Subregulation 12M(2) provides that actual means may be calculated on expenditure and savings in the financial year ending in the year of study if
* the actual means in the financial year ending in the year of study is substantially less than the actual means in the financial year ending before the year of study; and
* the reduction in actual means is attributable to an event that is beyond the control of the parent or family member; and
* the reduced amount is likely to apply for 2 years after the later of the day on which the event happened or 1 January in the year of study.
This is known as the current actual means concession. Subregulations 12T(1) and (2), 12Z(1) and (2) and 12ZE(1) and (2) provide similarly for students with a designated spouse, designated students with a spouse and designated students without a spouse respectively.
The Government has decided to make the current actual means concession available where:
* a designated parent, spouse or student is no longer in an AMT category; or
* a designated parent, spouse or student, or a family member, decides to undertake full-time study.
Amendments made by these regulations
Regulation 3 omits subregulations 12M(2), (3), (4) and (5) and substitutes new subregulations 12M(2), (3) and (4). This is a reordering of provisions to take account of new regulations 12MA and 12MB (see below). Subregulation 12M(2) provides that, if regulation 12MA applies, actual means is taken to be total expenditure by, and savings of, the parent and each family member in the financial year ending in the year of study. Subregulations 12M(3) and (4) retain the effect of current subregulations 12M(4) and (5) respectively.
Regulation 4 inserts new regulation 12MA (AMT concession: designated parents) after regulation 12M. Subregulation 12MA(1) provides that regulation 12MA applies if the amount mentioned in subregulation 12M(2) (i.e. the actual means in the financial year ending in the year of study) is, or is likely to be, substantially less than the actual means in the financial year ending before the year of study, and subregulation (2), (4) or (5) applies.
Subregulation 12MA(2) applies if the reduction in actual means is due to an event beyond the control of the parent or a family member and the reduced amount is likely to last for at least 2 years after the day the event happened or 1 January in the year of study, whichever is later. Subregulation 12MA(3) provides that an expected downturn in the profitability of a business is not ordinarily taken to be an event that is beyond the control of the parent or family member. These provisions retain the effect of current subregulations 12M(2) and (3).
Subregulations 12MA(4) and (5) provide the current actual means concession in the new circumstances outlined above. Subregulation 12MA(4) applies if the reduction in actual means is due to the fact that the parent or a family member is enrolled in a course as a full-time student and the reduced amount is likely to last for at least 2 years after the day when the parent or family member enrolled in the course and 1 January in the year of study, whichever is later.
Subregulation 12MA(5) applies if the reduction in actual means is due to the fact that the parent was described by at least one paragraph in regulation 12K (Who is a designated parent) but no longer falls within the description. (Subparagraph 12MA(5)(a)(iii) refers to subregulation 12MA(6) which applies to parents who were described by paragraph 12K(1)(e) and no longer fall within the description.)
Subregulations 12MA(5) and (6) provide that the concession is available to a parent who was described by one paragraph in subregulation UK(1) in the financial year ending in the year before the year of study and is no longer described by that paragraph. Additionally, the concession is available to a parent who was described by more than one paragraph in subregulation 12K(1) in the financial year ending in the year before the year of study and is no longer described by at least one or all of those paragraphs.
Subregulation 12MA(7) provides definitions of "family" and "relevant day" for the purposes of regulation 12MA. "Family" continues to have the meaning given by subregulation UN(5). "Relevant day" means the day, or the last of the days, on which the parent ceased to be described by the paragraph in subregulation UK(l).
Regulation 5 inserts new regulation 12MB (How does concession affect living allowance?) after regulation 12MA. Subregulation 12MB(l) provides that a student who is eligible for living allowance, or increased living allowance, because of regulation 12MA can get the allowance, or the increased allowance, from the later of the day when the student became eligible to get the allowance and the day when the parent's circumstances changed for subregulation 12MA(2), (4) or (5), as appropriate.
Regulations 7, 8, 9, 12, 13, 14, 16, 17 and 18 provide the current actual means concession for students with a designated spouse, designated students with a spouse and designated students without a spouse respectively.
Business expenditure and non-taxable compensation payments
Regulation 6 Regulation 12N (What is not the actual means of a designated parent)
Regulation 10 Regulation 12U (What is not the actual means of a designated spouse)
Regulation 15 Regulation 12ZA (What is not the actual means of the spouse of a
designated student)
Regulation 19 Regulation 12ZF (What is not the actual means of a designated student)
Background
Subregulation UN(1) provides what is not included in the actual means of a designated parent. Paragraph UN(1)(k) provides an exclusion for expenditure from the "income" of any business of the parent or family member that equates to the amount that was or will be deductible under the Income Tax Assessment Act 1936 (or the -Income Tax Assessment Act 1997) because the expenditure was or will be necessarily incurred in carrying on the business. The intention is that expenditure of money from any source, not limited to "income" of a business, is excluded from actual means if the expenditure was, or will be, tax deductible because it was necessarily incurred in carrying on the business. This, however, does not allow for "double counting" of expenditure excluded elsewhere in regulation 12N.
Additionally, expenditure and savings from non-taxable lump sum compensation payments is excluded from actual means.
Amendments made by these regulation
Subregulation 6.1 omits paragraph UN(1)(k) and substitutes a new paragraph UN(1)(k) to provide the exclusion from actual means for expenditure (except expenditure already mentioned in this subregulation) from the financial resources of any business of the parent or a family member that equates to the amount that was or will be deductible under the Income Tax Assessment Act 1936 or 1997 because the expenditure was or will be necessarily incurred in carrying on the business.
Subregulation 6.2 inserts new paragraph UN(1)(n) to provide the exclusion from actual means for expenditure or savings from any part of a lump sum compensation payment on which tax is not payable under the Income Tax Assessment Act 1936 or 1997.
Subregulations 10.1, 10.2. 15.1, 15.2, 19.1 and 19.2 provide similarly for students with a designated spouse, designated students with a spouse and designated students without a spouse respectively.
FARES ALLOWANCE
Regulation 25 Regulation 101 (How much is the fares allowance?)
Background
Regulations 99-102 provide for eligible tertiary students to be paid fares allowance for travel between a student's home and the educational institution at which he or she is studying. Fares allowance rates for travel by motor vehicle are changed in accordance with motor vehicle allowance rates determined under the Department of Workplace Relations and Small Business Continuous Improvement in the Australian Public Service Enterprise Agreement (Motor Vehicle Allowance, Disturbance Allowance and Pet Relocation Expenses). The amendment updates the fares allowance rates to reflect the motor vehicle allowance rates set on 25 December 1997.
Amendment made by these regulations
Subregulation 25.1 omits paragraph 101(4)(b) and inserts new paragraph 101(4)(b) to provide the new fares allowance rates for 1998.
COMMONWEALTH SERVICES DELIVERY AGENCY
Regulation 27 New Regulations 114, 115, 116 and 117
Background
In the 1996-97 Budget, the Government announced its intention to establish a Commonwealth Services Delivery Agency to deliver a range of services provided by the Departments of Social Security, Employment, Education, Training and Youth Affairs, Health and Family, Services and Primary Industries and Energy. The Agency, known as Centrelink, formally came into existence on 1 July 1997. It is responsible, amongst other things, for the delivery of AUSTUDY.
Amendments made by these regulations
Regulation 27 inserts new regulations 114, 115, 116 and 117 to provide that a reference to the Department or the Department of Social Security (except paragraph 111 (1)(b)) includes the Agency (regulations 114 and 116 respectively) and a reference to the Secretary or the Secretary to the Department of Social Security includes the Chief Executive Officer (CEO) of the Agency (regulations 115 and 117 respectively).
OTHER CHANGES
Regulation 11 corrects a drafting error by deleting the phrase "in the year of study" from paragraph 12X(1)(b) in regulation 12X (Who is a designated student?).
Regulations 20, 22 and 24 amend paragraph 13(4)(b) and subregulations 91(1A) and 97(1A) respectively to omit 'National Health Act 1953" and substitute "Health Insurance Act 1973".
Regulations 21 and 23 omit subregulations 90(4) and 96(4) and insert new subregulations 90(4) and 96(4) respectively, to clarify that for the purposes of the parental and spouse income tests, in circumstances where income is assessed for the financial year ending in the year of study, that income may need to be estimated.
Regulation 26 omits paragraph 111 (1)(b) from regulation 111 (Statements about income etc) and inserts new paragraphs 111(1)(b) and (bb) to reflect the fact that the authority to issue statements under paragraphs 1314(1)(a) or (b) of the Social Security Act 1991 (paragraph 111 (1)(b)) has not been delegated by the Secretary to that Department to the CEO of the Agency.